BoE's Cunliffe does not expect UK to join EU banking union

Britain is unlikely to join the European Union's banking union, which is centred on the eurozone, as it is not needed for being part of the wider EU single market, Bank of England Deputy Governor Jon Cunliffe said on Thursday. 

PHOTO: REUTERS

FEB 11, 20168:59 PM

[LONDON] Britain is unlikely to join the European Union's banking union, which is centred on the eurozone, as it is not needed for being part of the wider EU single market, Bank of England Deputy Governor Jon Cunliffe said on Thursday.

Cunliffe told a committee of Britain's upper house of parliament that he did not expect Britain to join the banking union, which is open to EU member states that are not part of the single currency area.

He said the banking union, where the European Central Bank supervises lenders, was needed for euro zone members because of their shared currency and shared lender of last resort.

The banking union still had not solved the issue of which governments would bail out banks in a crisis, said Cunliffe, who previously was Britain's top diplomat to the EU.

"I don't think a banking union is necessary to operate a single market in financial services," Cunliffe told the committee.

"I can't see why, when we retain responsibility for our currency, for our central bank and lender of last resort, why it would be necessary in terms of accountability (or) desirable to make that step," Cunliffe added.

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