Frankfurt says bail-in bill can hurt BoG role

The European Central Bank on Wednesday voiced serious concerns regarding a bill that is due to go before Greece’s Parliament for streamlining banks, saying that it would allow excessive government intervention and would undercut the role of the Bank of Greece, saying that the legislation would allow the Finance Ministry to operate as a second streamlining authority in parallel with the central bank.

In its opinion on the government’s bill on the so-called bail-in process, the ECB noted that the BoG will be placed in a position where it will have to seek approval from the Finance Ministry before making any decisions on banks’ streamlining, arguing that this goes beyond the aim and the objectives of the  European Union directive the bill was supposed to apply to the Greek law.

The ECB said the ministry should only be consulted in streamlining issues with a direct fiscal impact, otherwise it would allow the ministry to turn into another regulatory authority. It emphasized that “it is important that the Bank of Greece retains the final say on any decision that concerns streamlining issues, as anything else would compromise its economic independence.”