USA TODAY / AP: European leaders took a step toward creating a single supervisor for banks in countries that use the euro on Friday but remained vague about its start date…
They decided to try to have the legal framework for the European banking supervisor in place by Jan. 1 and have it operational sometime in 2013. The supervisor needs to be in place before European countries can work on the next big step in their crisis-fighting plan — giving their bailout fund, the ESM, the power to rescue banks directly, bypassing national governments.
That step is crucial because banks remain at the core of Europe’s financial problems. Many are teetering on the brink of bankruptcy after the investments they made up in boom times — including in government bonds and real estate — have plummeted in value. Some governments have stepped in to save their banks, only worsening their own balance sheets in the process… (more)
