Bloomberg reports that the Frankfurt-based institution would get the power to monitor risk management, capital standards and 'remuneration policies and practices', according to the draft dated Tuesday. The blueprint also says the ECB would be able to carry out stress tests and 'where appropriate publish the results'.
EU banking supervisors would send decisions to the ECB’s Governing Council for an up-or-down vote under the new draft, which builds on previous efforts to clarify how participating non-euro nations could take part in bank oversight decision. The draft says supervisory board leaders would not have to be Governing Council members and it lays out conditions in which the central bank’s top panel could exercise an oversight veto.
European Union officials will discuss the proposal this week as they push to design a framework by the end of the year for a euro-area bank supervisor. Leaders last week renewed their commitment to give the ECB oversight powers over all banks in the 17-nation currency union as well as in other nations that choose to participate.
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