EC and Germany heading towards banking union conflict

10 September 2012

The European Commission (EC) will press ahead with plans to create a full banking union in the eurozone regardless of German concerns about the initiative.

That is according to Michel Barnier, single market commissioner of the European Union (EU), who has insisted the body is planning to supervise all 6,000 financiers in the economic bloc.

Speaking to the Daily Telegraph at the Forum Ambosetti on global policy in Lake Como, Italy, Mr Barnier said the EC sees it as vital for such regulation to include all lenders, not just those seen as "systemically important".

Recently, German finance minister Wolfgang Schauble noted that such a plan is overly-ambitious because the EU does not have the means to effectively oversee such a large number of banks.

However, Mr Barnier stated: "We must have the right to inspect any bank because any one can cause trouble for the rest of us. Northern Rock is not a systemic bank and nor are Dexia or Bankia."

By Asim Shah

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