Stockholm is the second biggest banking centre outside the eurozone and Swedish ministers have kept their options open on joining the banking union, while expressing their strong objections to the limited rights given to non-eurozone members.
It gives Britain a steadfast ally in insisting that the European Central Bank does not become dominant in setting the EU’s technical rules when it takes over supervision responsibilities.
Mr Borg, finance minister, said Sweden would be willing to back the supervision plan on condition that outsiders were protected in the voting of the European Banking Authority, an agency that coordinates work between national supervisors.
Even if this issue is addressed, serious doubts remain over the prospects of a deal before the EU’s self-imposed year-end deadline, with Franco-German disputes remaining the biggest obstacle. One big area of contention is the threshold for the ECB to supervise a bank directly, should it decide to do so. Berlin wants supervision to apply to banks with more than €50 billion assets, while Paris is pressing for €2.5 billion. They are also wrangling over the authority of the ECB to step in when necessary and instruct national supervisors.
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