European Commission president Jose Manuel Barroso is calling for a single cross-border banking supervisor to regulate banks from all 27 European Union states.
Barroso, speaking to the Financial Times, says Europe needs to take “a very big step” towards deeper integration in order to learn from the sovereign debt crisis.
The plan could be in place by next year and would include an EU-wide deposit guarantee scheme and rescue fund paid for by levies on financial services firms.
The new banking regulator would be able to wind down a bank and impose losses on bondholders without consulting national regulators.
He says: “There is now a much clearer awareness among European member states about the need to go further in terms of integration, especially in the euro area. This is one of the lessons of the crisis.”
According to the report, Chancellor George Osborne is against a plan that will leave British taxpayers liable for recapitalising eurozone banks and would put UK banks under the supervision of an EU-wide banking regulator.
Barroso says the UK should be allowed to op- out of the plans if it wants to.
In April, Money Marketing reported on long delays in implementing two new European directives aimed at reforming investor and depositor protection rules. The European Commission, Council and parliament failed to agree on compensation levels and whether schemes should be pre or post-funded. The European parliament commissioned a new study on funding methods to try and break the “Catch-22” deadlock.