The direct recapitalisation of euro zone banks from the region's rescue fund can only begin once an effective banking supervisor is in place and that is "very unlikely" to happen by early 2013, a German government source said on Thursday.
Providing a different interpretation on what was agreed among EU leaders at a summit, the source said the primary aim was to have a fully functioning supervisor under the ECB in place before any direct recapitalisations can begin.
A French government source earlier said the supervisory mechanism would begin in 2013 and that direct recapitalisation should be possible even from the first quarter of next year.
The German government official also differed in the interpretation of the ECB's remit, saying the central bank would be responsible for monitoring systemically important banks and others if necessary, but would not oversee all 6,000 euro zone banks. The official said there would be a mix of national oversight and ECB monitoring, downplaying the ECB's scope.
