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MEPs questions mainly focused on Banking Union in the light of the concerns raised by some Member States. Addressing the economic and monetary affairs committee, Mr Barnier said that five years after the collapse of Lehman Brothers there was still a great deal to do particularly on Banking Union. He called for an EU bank crisis resolution mechanism to be set up quickly, saying the past had proved that merely bringing national authorities together to resolve a crisis would not yield the desired results.
EU bank crisis resolution
MEPs across the political spectrum pressed the Commissioner for more details about how a single resolution regime would work. Would the Commission push ahead with its plans despite Germany's resistance? asked Peter Simon (S&D, DE). Could the planned EU resolution fund borrow money from the European Stability Mechanism (ESM) until it was fully capitalised by banks' contributions? asked Wolf Klinz (ALDE, DE). Mr Barnier said he did not see any problem with the new fund borrowing from the ESM or from other sources. Responding to Mr Simon, he said he was open to amending the treaties but did not see this as a prerequisite.
The committee will have its first detailed discussion of the Commission's proposed legislation on Tuesday morning.
Weaknesses to be addressed
Other MEPs questioned the Commissioner about his plans to address possible weaknesses in the financial regulatory system that was being set up. Corien Wortmann Kool (EPP, NL) asked whether the Commission was ready to table fresh ideas if the European Court of Justice ruled that the power given to the EU markets watchdog ESMA to ban certain types of short selling was illegal. Mr Barnier confirmed that it was.
Philippe Lamberts (Greens, BE) raised concerns about the upcoming bank health check (asset quality review). He felt that if, as with previous stress tests, its results proved incorrect, this could undermine the EU supervisory system. Syed Kamall (ECR, UK) said that the EU had not done enough work on accounting standards and the liability of directors. He also thought that taxpayers were still in the front line in the event of any trouble.