ECB, U.K. Spar on Bank Rules - by Alistar MacDonald and Joellen Perry
A top European Central Bank policy maker said he expects European lawmakers to give the central bank supervisory powers over big euro-zone banks whose businesses cross borders. But the U.K. intends to steer clear, raising questions about the effectiveness of a European financial regulator that would have no oversight over the region's financial center.Laying out the most forceful case to date for why the ECB wants to spearhead supervision of cross-border euro-zone banks, ECB executive-board member Lorenzo Bini Smaghi said Thursday that the current patchwork of national oversight in the 27-nation European Union is "fragile" and hasn't "worked as expected." "The ECB is ready to assume responsibility for the tasks," Mr. Bini Smaghi said in a speech at the European Parliament in Brussels, echoing recent statements from other ECB policy makers, including President Jean-Claude Trichet. "I expect the European Commission...to give the ECB powers in macro supervision." A provision in the European Union's founding treaty allows the ECB to take on additional duties with the unanimous backing of the EU's 27 member nations.
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