Recently negotiations have been taking place regarding the creation of the European Central bank, which finally took place. European Union finance ministers agreed to put the European Central Bank in charge of all euro- area lenders paving the way for the currency bloc’s firewall fund to provide direct bailouts.
According to expectations, the new supervisor should be ready by March 1, 2014, under which nearly 200 banks are going to be managed. This achievement is expected to bring financial stability to the whole Europe, which is continuing for already three years. The ECB is going to have an access to banking information and will equally treat to non-euro nations that would like to join the system.
After the meeting German Finance Minister Wolfgang Schaeuble said: “I think we’ve agreed on the key points to create a European bank supervision that’s supposed to start in 2014.” According to the agreement, euro-area finance ministers could use the ESM to recapitalize banks directly if they make a common request to the ECB to take over direct supervision of a troubled institution. Finance chiefs will need to develop strategy for offering aid to banks, instead of going through national governments as they used to do with Spain’s financial-sector rescue program.
The legal framework of the agreement is quite wide. However, the most important point is that this step should bring a long-term stability in the Eurozone, which has direct impact on the world economic atmosphere.