Germany: EU supervisor must focus on biggest banks

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Associated Press

Posted on November 22, 2012 at 8:00 AM

Updated Thursday, Nov 22 at 8:04 AM

BERLIN (AP) — Germany says Europe's planned single banking supervisor should not oversee all of the bloc's banks but must focus on the biggest, most systemically relevant institutions.

A German government official insisted Thursday that the new supervisory body, which will be anchored with the European Central Bank, cannot "practically supervise 6,000 banks with the same intensity."

Many EU governments want the supervisor to oversee all banks, not only the few dozen most-important institutions, to avoid a two-class system that could disadvantage smaller banks controlled by national regulators.

The EU hopes to introduce the legal framework for the so-called banking union by January but many issues remain unresolved.

The official, speaking on condition of anonymity in line with government policy, says negotiations in coming weeks "will be very intense."

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