EU finance ministers look for compromise on bank regulation

EU finance ministers met on Tuesday to find a compromise with the European Parliament on how to wind up failing banks before they can damage the wider economy. Ministers going into the talks voiced cautious optimism that some progress on 'banking union' was being made but stressed the need to get an agreement they can put before MEPs who oppose the current plans. "Today we will not leave the room unless we get a revised mandate to negotiate with the European Parliament,"  Greek Finance Minister Yannis Stournaras said. Greece, current holder of the EU's rotating presidency and so chair of the meeting, has submitted a compromise text, Stournaras said, without giving details. "We must get a new mandate, time is running out," he said, adding that a deal had to be reached as soon as possible to allow time for Parliament to approve it before elections in May. "It is now time to conclude the talks," French Finance Minister Pierre Moscovici said. "There are only a few things left to do but they are very technical," Moscovici said, adding: "It is essential in my view to stick to the timetable." After months of difficult negotiations, EU leaders agreed in December what is known as the Single Resolution Mechanism, designed to close failing banks in a safe and orderly fashion to avoid a repeat of the debt crisis crash. This SRM will work alongside a new regulator, run by the European Central Bank, that is set to supervise the eurozone's 130 biggest banks starting in November. Closing down a bank is a costly and politically charged step and so EU leaders agreed a decision-making structure which gives them the final say and minimises the role of the European Commission, the EU's executive arm. Parliament objected strongly to this proposal and warned again last week it could not accept a formula which allows "political power games" when closing a bank requires speed and effectiveness. Parliament is also unhappy with the plans for an accompanying fund, paid for by the banking industry, saying it is too unwieldy and its phasing-in period of 10 years too long. The fund is also to be set up under a treaty between member states, not under EU rules, effectively excluding Parliament from the process. A recent vote in Parliament damned the proposals as an "overly complex and politicised decision-making process for winding up banks." Finance ministers arriving for Tuesday's meeting said they hoped for an accord and offered some leeway, especially on a shorter introductory time for the bank closure fund and its legal basis. "I think we have a good chance of (getting) this new mandate and a very good chance of agreement with the European Parliament on a first reading," Lithuanian Finance Minister Rimantas Sadzius said.