LONDON, Dec 13 (Reuters) - The EU needs to quickly push through the next phase of its banking union, following a landmark agreement on the first stage towards a more pooled sovereignty, ECB President Mario Draghi said in the Financial Times on Thursday.
EU finance ministers agreed on Thursday, after marathon overnight talks, to create a single banking mechanism (SSM) for the euro zone and like-minded countries.
The next phase of creating a full banking union would require an agreement on a common resolution authority to oversee the orderly winding down of insolvent lenders.
“A European resolution authority is an important complement to the SSM and it will probably be in place by the time the SSM takes up its responsibilities,” Draghi said in an article published on the FT’s website.
The ECB expects to take a year to prepare itself to assume responsibility for supervising lenders with assets of more than 30 billion euros ($39 billion).
Draghi said the SSM would, in effect, shame local supervisors and national governments into taking action, if Europe’s leaders were not able to quickly agree on the next phase of the banking union.
“Even in (the resolution mechanism‘s) absence, the single supervisor’s assessment of the possible non-viability of a bank would be such a strong statement that it would likely trigger the national government’s policy response,” he said.