UPDATE 1-EU's Barnier seeks 'political will' on bank union - FT

Isla Binnie
Reuters Middle East

LONDON, Nov 26 (Reuters) - European Union Commissioner

Michel Barnier called on the bloc's finance ministers to dispel

doubts about their "political will" to create a single bank

supervisor, the Financial Times reported on Monday.

In an interview with the newspaper, the commissioner also

expressed support for a cap on bankers' bonuses, criticised a

voting system favoured by the United Kingdom and suggested EU

law could eventually be changed to strengthen the banking union.

Ahead of a meeting of European finance ministers next week,

which will test the likelihood of a deal on banking union being

struck by the end of the year, Barnier emphasised the importance

of reassuring the "fragile" markets.

"Now is the time to decide," the commissioner said. "We need

to meet a deadline set by the heads of state. We need

a political decision and that is possible."

Some negotiators involved in talks over a proposed banking

union, which have stalled in recent weeks, expect the year-end

deadline to be missed.

"The markets are not complacent. They remain vigilant and

watchful. ... We need to deliver now."

Barnier also offered a solution to the thorny issue of

bankers' pay, suggesting a "maximum cap" which could be

adjusted, within a set range, by shareholders.

"Banks need to pay attention. They are part of society, they

are not outside of society," he said.

The French commissioner opposed UK demands for a so-called

"double majority" at the European Banking Authority - whereby

there must be a minimum of non-banking union votes in any

decision - on the grounds it could lead to "fragmentation".

"The EBA is a body that works for the coherence of the

single market. ... A double majority could indeed establish a

fragmentation," he said. "We can work on better systems than

double majority."

Any deal to establish a Europe-wide banking supervisor would

have to be made on the basis of "good solutions in the existing

treaties", Barnier said.

But he added that EU law could be changed in the future to

accommodate the union better.

"Maybe we can imagine that later on we can consolidate

things, improve things," he said.

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