Europe must make a decision as soon as possible on setting up a strong central authority to handle failing lenders, a key plank of establishing a successful banking union, former European Central Bank (ECB) president Jean Claude Trichet urged on Thursday.
Although European Union lawmakers earlier this month granted new powers to the ECB to oversee banks in the euro zone, the challenge of setting up a single euro zone authority to handle failed banks remains.
Trichet, speaking to CNBC on the sidelines of the SkyBridge Alternatives (SALT) conference in Singapore, said establishing such a body was crucial.
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"We do not yet have a decision on the single resolution authority and that is extremely important," said Trichet, who was president of the ECB between 2003 and 2011.
"I expect that this decision will be taken in the next few weeks or month and I would call for this to be done as soon as possible, because to have a real banking union we need both," he said referring to the supervisory body and resolution authority.
The banking union establishes new rules for bank supervision and dealing with bank failures to avoid government bailouts.
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