Skip to comments.EU lawmakers back central bank oversight
Posted on 09/12/2013 5:38:31 AM PDT by Olog-hai
European lawmakers approved legislation Thursday establishing a new, centralized oversight for Europes largest banks, marking what is considered a key step toward stabilizing the blocs financial system.
The centralized bank supervision authority, which will be anchored by the European Central Bank, will be up and running next year following a thorough stress test of banks balance sheets.
The so-called single supervisory mechanism is the first of three pillars of the blocs planned banking union, the cornerstone of efforts to turn the tide on the 17-nation eurozones three-year-old debt crisis.
Its goal is to make supervision and rescue of banks the job of European institutions rather than leaving weaker member states to fend for themselves. Failing banks in the past have dragged down government finances and forced European Union countries such as Ireland or Cyprus into seeking bailouts.
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Science shows that the belief that banking “regulators” are “smarter” than bankers is idiotic.
Banks buy toxic assets when “regulators” give those assets AAA ratings.
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