EU reaches agreement to consolidate European banking union

The European Parliament and the European Council have reached a preliminary agreement that will keep the European banking union ready on schedule.

After 17 hours of negotiations, sources have said that the decision of the unique resolution mechanism to close banks will have less presence of the governments, in exchange for a greater role of the ECB and from the directory, which must give the last word to liquidate a bank.

The president of the European Commission (EC) Jose Manuel Barroso hoped that this will contribute to “strengthen the confidence and stability in financial markets and help restoring credit to the economy,” he said in a statement.

Furthermore, the resolution fund of 55,000 million euros will be allocated, which will be ready in eight years, facing the 10 given until now, and the mutualization process will be faster, according to preliminary information.

For its part, the European Parliament argued for simplifying and disempowering the European Council in the decision process to liquidate or restructure a problematic bank.