EU parliament gives final nod to banking union

MEPs on Tuesday (15 April) overwhelmingly approved the creation of a new authority and fund for failing banks – a missing element to the so-called banking union aimed at minimising the public cost of future financial crises.
The final vote on the creation of a €55 billion fund financed by the banks themselves passed with 570 MEPs in favour, 88 against and 13 abstentions, while new rules in cases where public money needs to be used for winding down banks also gathered a similar majority: 584 votes in favour, 80 against and 10 abstentions.
One key concession won by MEPs from governments during final negotiations was a speedier mutualisation of the fund, which will comprise of domestic bank levies paid into "national compartments". Forty percent of the fund is to be mutualised in the first year, 20 per cent in the second year, the rest equally over a further six years.
There will also be an obligation for EU countries to guarantee up to €100,000 in any savings account, but there is no common backstop in case they fall short.
A first element of the 'banking union' – single supervision of the 130 largest eurozone banks – is to become operational in November within the European Central Bank. The resolution mechanism will be independent, but take advice from the ECB as to when to step in to help or to close down a troubled bank.
Euobserver