The European Commission has floated a proposal to give European Union regulators the right to overrule national regulators when it comes to bank supervision.
The idea is to prevent another financial crisis.
Of course it's unclear whether EU regulators would be any more likely to lead banks away from major mistakes than national supervisors. But, advocates see the move as an effective way to oversee banks that operate throughout the EU.
"It's now or never that we build a consensus on financial supervision," Commission President Jose Manuel Barroso told a news conference unveiling the proposal, Reuters reported. "I think we will do it."
But it's unclear if individual European nations will accept the idea of subservience to the EU on this issue.
The New York Times points out that the U.K. will probably oppose the plan. British officials have argued that national regulators should be the ultimate authority, because if worse comes to worse, each nation bails out its own banks.
The commission plan echoes a proposal made by former French central bank governor Jacques de Larosière in February. He opposed the idea of a single EU "super-regulator," advocating a lighter approach that would more likely be acceptable to individual countries.
The new plan does have some powerful backers. It "will provide for a macro perspective in supervision, which is urgently required," Piet Moerland, president of the European Association of Cooperative Banks, told Bloomberg News.
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