Creation of a European banking union is intended to curb the region’s ongoing financial crisis.
According to the European commissioner for economic and monetary affairs Olli Rehn, the ECB should supervise all euro zone banks as well as those in non-euro zone countries, whereas, Berlin insists that ECB should concentrate to regulate only the big banks.
Rehn was quoted by Reuters as saying, "Our approach … envisages an ambitious mechanism with a relatively broad coverage, which will oversee all banks in the euro area, with the ECB at the heart of the system."
The European Commission is scheduled to present a formal proposal for the banking union on 12 September 2012, when Commission’s president Jose Manuel Barroso will present his annual state of the union address.
"With the bigger, systemically relevant banks … there is a chance that direct supervision by the ECB could be realised in a foreseeable period of time," Rehn added.
