German to tame eurozone banks

The European Commission picked Germany's Elke König to chair the EU banking union's Single Resolution Board (SRB), Brussels announced on Friday.

König would oversee the six-member body charged with managing failing banks under the European Central Bank's (ECB) Single Supervisory Mechanism authority.

The 60-year-old economist has been heading Germany's Federal Financial Supervisory Authority since 2012 and received strong backing by the government in Berlin.

A spokesman for the German Finance Ministry praised König, calling her "highly suited" for the EU position.

Ethical banking

Last month, the ECB assumed responsibility for overseeing the eurozone's 120 biggest banks, which represent 82 percent of the single-currency zone's banking assets. This was part of Brussels' move to prevent a repeat of taxpayer-funded bailouts of lenders in the wake of the 2008 eurozone debt crisis.

König has long called for broader and tighter EU banking regulations, arguing that national authorities have become increasingly powerless against large, multinational banks. She has also been vocal in her appeals for a heightened sense of moral responsibility in the banking sector.

"We need a return to basic ethical values, which seem to have gone out of fashion in certain corners of the financial sector during the economic boom," König said in a speech in January.

König beat Belgian Central Bank chief Luc Coene and former European Investment Bank president Philippe Maystadt. The European Commission tapped the managing director of Finland's State Pension Fund, Timo Löyttyniemi, as Vice-Chair of the SRB. Both are expected to be confirmed by the European Parliament and European Council.

pad/cjc (AFP, dpa, Reuters)