Press Release: EU’s Barnier Says He’s Negotiating with Germany Over Joint Bank Supervision
EUROPEAN SESSION UPDATE: Germans are once again at odds with what seems like the rest of Europe over a timetable for the banking plan; Euro falls back below the key 1.3000 level…
It’s deja-vu, the Germans are once again pitted against what seems like the rest of Europe on an issue that could be a vital step towards solving the Euro debt crisis. This time the center of the strife is not ECB bond purchases or Euro-bonds, but rather joint supervision over Euro-zone banks.
The European Commission is sticking to its timetable to have a single Euro-zone bank supervisor up and running by January of 2013, according to an EU spokeswoman who spoke earlier this morning. Meanwhile, German Finance Minister Wolfgang Schaeuble has been leading a call to slow down the institution of the banking supervisor, and German coalition members had called for the joint supervisor to only look after relevant and cross-border banks. European Commissioner Michel Barnier said today he will try to negotiate a solution with Germany.
Additionally, the ECB’s Coeure defended the bank’s new bond purchase plan by saying that it is not QE. He said OMT doesn’t pose a large risk to the ECB balance sheet, and called on governments to take action and ask for the bank’s help with bond purchases. Spain officials have previously said they want to analyze the terms of the OMT before asking for the aid.
The Euro is trading significantly lower today. The single currency started declining in the overnight session following weak data out of Japan and China, and then weak French PMI results, which were reinforced by overall lower Euro-zone output, sent the Euro even lower.
EURUSD crossed below the key 1.3000 level at the very beginning of the session, and has barely looked back since. 1.3000 could continue to provide resistance from here, and the 1.2900 level could provide support, which is also near the 23.6% retracement of the August rally.
EURUSD 1-hour: September 20, 2012
— Written by Benjamin Spier, DailyFX Research
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