ECOFIN Ministers Approve Bank Supervision, Discuss Steps towards Banking Union

“The decision on the Single Supervisory Mechanism is particularly important. It will set up one of the pillars of the Banking Union and will certainly add to the credibility of the European financial system,” said chair of the ECOFIN, Lithuanian Finance Minister Rimantas Šadžius. “We are efficiently moving forward. Backstop arrangements are very important not only for our work on the Single Resolution Mechanism but also for the upcoming asset quality review and stress tests.”

The discussion focused on the political guidelines for further work. The ministers agreed to come back to these issues next month after further preparatory work.

The Council has defined the joint guarantees for new loans as a preference way at current stage to fostering access of small and medium-sized enterprises to finance but stressed that the work should continue to make the use of the options involving securitization elements possible as well. The options were proposed by the European Commission and European Investment Bank earlier in the year. The ECOFIN President will now inform the European Council and the Heads of State will define the exact way forward regarding the implementation of the SME initiative in their upcoming meeting on October 24–25.

“With the SMEs being at the heart of economy, we believe that our guidelines for the work in this area will contribute to fostering of growth in Europe and provide additional motivation for creating jobs. We believe the guarantees will encourage banks and other financial institutions to increase the lending for the benefit of SMEs,” said Minister Šadžius.

The Ministers finalised their input in preparation for the October European Council by discussing economic policy areas and indicators for more effective functioning of the European Monetary Union. They also exchanged ideas on how to further refine the process of the European Semester of economic and financial policy coordination, including on how to increase the national ownership of the exercise and improve the implementation of the Council recommendations for the Member States and the euro area.

The Ministers approved the Council’s conclusions on the financial aspects of climate change, which will be further discussed in the United Nations International Conference in Warsaw in November. The ECOFIN also considered the outcomes of the G20 Finance Ministers’ and Central Bank Governors’ Meeting, as well as the Annual Meeting of the International Monetary Fund and the World Bank Group, which took place in Washington last week.

Ahead of the Council meeting, the Ministerial Dialogue with European Free Trade Association (EFTA) countries took place. The EU Finance Ministers and representatives of EFTA countries discussed the European economic and financial developments as well as implications of the recent financial services regulatory reforms to ensure financial stability of Europe.

IN THIS CONTEXT:

Statement by President Barroso and Commissioner Barnier following the Council’s final approval of the creation of the Single Supervisory Mechanism for the eurozone | European Commission – MEMO/13/899   15/10/2013