September 11, 2018 / 10:13 AM / 7 months ago

German Finance Minister wants progress on banking union this year

German Chancellor Angela Merkel talks to Finance Minister Olaf Scholz at the start of the 2019 budget debate at the lower house of parliament Bundestag in Berlin, Germany, September 11, 2018. REUTERS/Hannibal Hanschke

BERLIN (Reuters) - German Finance Minister Olaf Scholz said on Tuesday he wanted the European Union to make progress this year on completing a banking union.

“We must take action so that we can act in a new crisis - not everything has been done,” Scholz told the Bundestag lower house of parliament.

The European Union drew up plans for a banking union in the wake of the 2007-2009 financial crisis, including setting up capital rules to reduce bank risk that would in turn allow more risk sharing among euro zone nations to rescue failing banks.

Under plans so far agreed, the euro zone’s agency for troubled banks, the Single Resolution Board, will be given a clearer mandate to set the level of capital buffers that banks should hold against the risk of failure.

But a common bank deposit insurance scheme, one of the pillars of the banking union idea, has yet to be agreed.

“I am very happy that with the agreement (in June) in Meseberg, Germany and France laid a foundation so that we can quickly take the last steps to make Europe stable and to equip ourselves for the next crisis,” Scholz said on Tuesday.

“I think we have the task of completing a banking union and we should fulfil the most important steps this year,” he said.

Reporting by Madeline Chambers; Writing by Paul Carrel; Editing by Andrew Heavens

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