European Union finance chiefs have failed to reach an agreement on regulating banks across the continent.
The 27 finance leaders met in Brussels Tuesday, but left without a compromise after French Finance Minister Pierre Moscovici and his German counterpart, Wolfgang Schaeuble, clashed on the extent of the banking regulatory power that the European Central Bank should have.
Moscovici said that all 6,000 of Europe's banks should be regulated by the central bank. But Schaeuble said it would be very difficult to win German parliamentary approval for any plan that handed authority over hundreds of local banks in his country to central European supervision.
Schaeuble called for regulation of only a few dozen of the largest European banks, including Germany's multinational Deutsche Bank. With no immediate agreement, the finance chiefs said they would discuss the issue again on December 12, the day before a scheduled summit of European leaders.
Tighter bank regulation is part of the effort to end the three-year-old governmental debt crisis in the 17-nation euro currency bloc. Some banks, including in debt-ridden Spain, have lost billions of dollars in bad loans as the eurozone economy has fallen into its second recession in three years.
But Spanish finance chief Luis De Guindos said it is not enough to fix the problems of individual banks. Rather, he said, a eurozone-wide banking union is needed to assure the currency bloc's future.
“We are talking about the monetary union's future, that goes further than direct recapitalization. For Spain, as you can see, that's not the fundamental point. We have channeled a solution for our banks, but we think that bank union is fundamental to disperse, to dissipate any doubt on the monetary union's future. That's the most important. We are not looking after the concrete interest of one country, we look after the whole interest.”