Yahoo Finance 
Forex News: EU Finance Ministers Appoint ECB as Bank Supervisor
THE TAKEAWAY: EU Ministers appoint the ECB as banking supervisor -> Supervision to be enacted over at least 200 banks on March 1, 2014 -> Euro rises
European Union finance ministers have finally agreed to put the European Central Bank at the head of a Euro-zone wide banking supervision, which is set to be enacted on March 1 2014. The decision came following yesterday’s second day of deliberations following the failure to come to an agreement at the end of last week’s meeting.
EU Financial Services Commissioner Michel Barnier said that 200 banks should automatically qualify for the banking supervision, and any bank with direct banking supervision will be allowed direct access to bailout funds. Banks to be included in the supervision are those with at least 30-billion Euros of assets or with balance sheets that equal 20% of its country’s GDP. Until the banking supervisor is set up, banks may already apply for direct recapitalization from the ESM bailout fund. EU banks that are not in Euro-zone countries may also ask to be included in the supervision.
The European Parliament has to create the legal framework to allow the ECB to take up this new role, and its decision is expected by February 2013. Banking supervision will allow struggling banks to accept aid without adding to the country’s debt level.
The Euro rallied more than 25 points against the US Dollar in forex markets on news of the agreement, which was announced slightly after 03:00 GMT this morning. EURUSD is currently trading around 1.3095, and resistance has been provided over the last 3 month around 1.3139. Support could be provided by a year long downward trend line currently near 1.3063.
EURUSD Daily: December 13, 2012
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
