Procedure : 2008/0191(COD)
Document stages in plenary
Document selected : A6-0139/2009

Texts tabled :

A6-0139/2009

Debates :

PV 06/05/2009 - 3
CRE 06/05/2009 - 3

Votes :

PV 06/05/2009 - 6.9
CRE 06/05/2009 - 6.9
Explanations of votes
Explanations of votes

Texts adopted :

P6_TA(2009)0367

REPORT     ***I
PDF 262kWORD 543k
17.3.2009
PE 416.308v02-00 A6-0139/2009

on the proposal for a directive of the European Parliament and of the Council amending Directives 2006/48/EC and 2006/49/EC as regards banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management

(COM(2008)0602 - C6-0339/2008 – 2008/0191(COD))

Committee on Economic and Monetary Affairs

Rapporteur: Othmar Karas

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a directive of the European Parliament and of the Council on amending Directives 2006/48/EC and 2006/49/EC as regards banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management

(COM(2008)0602 - C6-0339/2008 – 2008/0191(COD))

(Codecision procedure: first reading)

The European Parliament,

–   having regard to the draft Commission directive amending certain annexes to Directive 2006/48/EC of the European Parliament and of the Council as regards technical provisions concerning risk management,

–   having regard to the Commission proposal to the European Parliament and to the Council (COM(2008)0602),

–   having regard to Article 251(2) and Article 47(2) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6-0339/2008),

–   having regard to Rule 51 of its Rules of Procedure,

-    having regard to the report of the Committee on Economic and Monetary Affairs (A6-0139/2009),

1.  Approves the Commission proposal as amended;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend the proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council and the Commission.

Amendment  1

Proposal for a directive – amending act

Recital 1

Text proposed by the Commission

Amendment

(1) Article 3 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions allows Member States to provide for special prudential regimes for credit institutions which are permanently affiliated to a central body since 15 December 1977, provided that those regimes were introduced in national laws no later than 15 December 1979. Those time limits prevent Member States, especially those which have acceded to the European Union since 1980, to introduce the same regimes for similar affiliations of credit institutions which have been set up later on their territories. It is therefore appropriate to remove the time limits set out in Article 3, in order to ensure equal conditions for competition between credit institutions in Member States. The Committee of European Banking Supervisors should provide for non-binding guidelines in order to enhance the convergence of supervisory practices in this regard.

(1) Article 3 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions allows Member States to provide for special prudential regimes for credit institutions which are permanently affiliated to a central body since 15 December 1977, provided that those regimes were introduced in national laws no later than 15 December 1979. Those time limits prevent Member States, especially those which have acceded to the European Union since 1980, to introduce the same regimes for similar affiliations of credit institutions which have been set up later on their territories. It is therefore appropriate to remove the time limits set out in Article 3 of that Directive, in order to ensure equal conditions for competition between credit institutions in Member States. The Committee of European Banking Supervisors should provide for guidelines in order to enhance the convergence of supervisory practices in this regard.

Amendment  2

Proposal for a directive – amending act

Recital 3

Text proposed by the Commission

Amendment

(3) Therefore, it is important to lay down criteria for those capital instruments to be eligible for original own funds of credit institutions and to align the provisions in Directive 2006/48/EC to that agreement. The amendments to Annex XII to Directive 2006/48/EC result directly from the establishment of those criteria. The eligibility criteria should refer to the most subordinated instruments of a credit institution that does not have proprietors or shareholders under national law, such as certain members' certificates of cooperative banks, insofar as the respective capital has been paid up and ranks after all other claims.

(3) Therefore, it is important to lay down criteria for those capital instruments to be eligible for original own funds of credit institutions and to align the provisions in Directive 2006/48/EC to that agreement while taking into account the importance of a strong core capital base to be able to absorb losses. The amendments to Annex XII to Directive 2006/48/EC result directly from the establishment of those criteria. Original own funds referred to in Article 57(a) of Directive 2006/48/EC include all instruments that are regarded under national law as equity capital, rank after all other claims during liquidation and fully absorb losses pari passu with ordinary shares on a going concern basis. These may include instruments providing preferential rights for dividend payment on a non-cumulative basis, provided that they are included in Article 22 of Directive 86/635/EEC, rank after all other claims during liquidation and fully absorb losses on a going concern basis pari passu with ordinary shares. Original own funds referred to in Article 57(a) of Directive 2006/48/EC also include any other instrument under credit institutions' statutory terms taking into account the specific constitution of mutuals, cooperative societies and similar institutions and which are deemed broadly equivalent to ordinary shares in terms of their capital qualities. Instruments that do not rank after all other claims during liquidation or that do not absorb losses on a going concern basis pari passu with ordinary shares are included in the category of hybrids referred to in Article 57(ca) of Directive 2006/48/EC.

Amendment  3

Proposal for a directive – amending act

Recital 5

Text proposed by the Commission

Amendment

(5) For the purpose of strengthening the crisis management framework of the Community, it is essential that competent authorities coordinate their actions with other competent authorities and where appropriate with central banks in an efficient way. In order to strengthen the efficiency of prudential supervision of parent credit institutions authorised in the Community and to allow competent authorities to better carry out the supervision of a banking group on a consolidated basis, supervisory activities should be coordinated in a more effective manner. Therefore, Colleges of Supervisors should be established. The establishment of colleges should not affect the rights and responsibilities of the competent authorities under Directive 2006/48/EC. Their establishment should be an instrument for stronger cooperation whereby competent authorities reach agreement on key supervisory tasks. The colleges should facilitate the handling of ongoing supervision and emergency situations. The consolidating supervisor may, in association with the other members of the college, decide to organise meetings or activities that are not of general interest and therefore streamline the attendance as appropriate.

(5) For the purpose of strengthening the crisis management framework of the Community, it is essential that competent authorities coordinate their actions with other competent authorities and where appropriate with central banks in an efficient way. In order to strengthen the efficiency of prudential supervision of a banking group on a consolidated basis, supervisory activities should be coordinated in a more effective manner. Therefore, Colleges of Supervisors should be established. The establishment of colleges should not affect the rights and responsibilities of the competent authorities under Directive 2006/48/EC. Their establishment should be an instrument for stronger cooperation whereby competent authorities reach agreement on key supervisory tasks. The colleges should facilitate the handling of ongoing supervision and emergency situations. The consolidating supervisor may, in association with the other members of the college, decide to organise meetings or activities that are not of general interest and therefore streamline the attendance as appropriate.

Amendment  4

Proposal for a directive – amending act

Recital 7

Text proposed by the Commission

Amendment

(7) Competent authorities should be able to participate in colleges established for the supervision of credit institutions the parent institution of which is situated in a third country. The Committee of European Banking Supervisors should provide, where necessary, for non-binding guidelines and recommendations in order to enhance the convergence of supervisory practices pursuant to Directive 2006/48/EC.

(7) Competent authorities should be able to participate in colleges established for the supervision of credit institutions the parent institution of which is situated in a third country. The Committee of European Banking Supervisors should provide, where necessary, for guidelines and recommendations in order to enhance the convergence of supervisory practices pursuant to Directive 2006/48/EC. In order to avoid inconsistencies and regulatory arbitrage, which could result from differences in the approaches and rules applied by the various colleges and the application of discretion by Member States, guidelines on the proceedings of rules governing colleges should be developed by the Committee of European Banking Supervisors.

Amendment  5

Proposal for a directive – amending act

Recital 8 a (new)

Text proposed by the Commission

Amendment

 

(8a) The current supervisory arrangements should be temporary. Colleges of supervisors are a considerable first step forward in streamlining EU supervisory cooperation and convergence. Cooperation between supervisory authorities in colleges, dealing with groups and holdings and their subsidiaries and branches, is a phase in a development towards further regulatory convergence and supervisory integration. Trust between supervisors and respect for their respective responsibilities is essential. In the event of a conflict between members of a college linked to those different responsibilities, neutral and independent advice, mediation and conflict resolving mechanisms at Community level are essential.

 

The crisis in international financial markets has demonstrated that it is appropriate to examine further the need for a reform of the regulatory and supervisory model of the EU financial sector. In particular, the Commission announced in its Communication of 29 October 2008 entitled 'From financial crisis to recovery: A European framework for action', that it had set up a group of experts, chaired by Mr Jacques de Larosière, to consider the organisation of European financial institutions to ensure prudential soundness, the orderly functioning of markets and stronger European cooperation on financial stability oversight, an early warning mechanism and crisis management, including the management of cross-border and cross-sectoral risks, and also to examine cooperation between the EU and other major jurisdictions to help safeguard financial stability at the global level. In order to achieve the necessary level of EU supervisory convergence and cooperation and to underpin the stability of the financial system, further supervisory integration should be pursued. Such integration could result in a European System of Banking Supervisors building on the model of the European System of Central Banks.

 

The Commission should as soon as possible and in any event by 31 December 2009, report to the European Parliament and the Council any findings in this respect and put forward any legislative proposal needed to tackle the shortcomings identified regarding the provisions related to supervisory cooperation arrangements while taking into account the recommendations of the High Level Group on financial supervision having in mind that a stronger role for an EU level supervisory system should be achieved by 31 December 2011.

Amendment  6

Proposal for a directive – amending act

Recital 14

Text proposed by the Commission

Amendment

(14) Since a loss arising from an exposure to a credit institutions or an investment firm can be as severe as a loss from any other exposure, such exposures should be treated and reported as any other exposures.

(14) Since a loss arising from an exposure to a credit institutions or an investment firm can be as severe as a loss from any other exposure, such exposures should be treated and reported as any other exposures. In addition, very short-term exposures related to payment, clearing, settlement and custody services for clients are exempt to facilitate the smooth functioning of financial markets and of the related infrastructure. Those services cover, for example, the execution of cash clearing and settlement, the processing of corporate actions as well as securities lending and similar activities to facilitate settlement. The related exposures include, inter alia, balances on inter-bank accounts resulting from client payments, including credited or debited fees and interest, and other payments for client services, as well as collateral given or received.

Amendment  7

Proposal for a directive – amending act

Recital 14 a (new)

Text proposed by the Commission

Amendment

 

(14a) The provisions related to External Credit Assessment Institutions (ECAIs) under this Directive should be consistent with Regulation (EC) No .../2009 on Credit Rating Agencies. In particular, the Committee of European Banking Supervisors should review its guidelines on the recognition of ECAIs to avoid duplication of work and reduce the burden of the recognition process where an ECAI is registered as a Credit Rating Agency (CRA) at Community level.

Amendment  8

Proposal for a directive – amending act

Recital 15

Text proposed by the Commission

Amendment

(15) It is important to remove misalignment between the interest of firms that 're-package' loans into tradable securities and other financial instruments (originators) and firms that invest in these securities or instruments (investors). It is therefore important for originators to retain exposure to the risk of the loans in question. In particular where credit risk is transferred by securitisation, investors should make their decisions only after conducting thorough due diligence, for which they need adequate information about the securitisations.

(15) It is important to remove misalignment between the interest of firms that 're-package' loans into tradable securities and other financial instruments (originators or sponsors) and firms that invest in these securities or instruments (investors). It is also important to distinguish securitisations where the interests of the originator or sponsor and the interests of investors are aligned, because, for example, the originator or sponsor retains a significant interest in the underlying assets, from those where they are not aligned. In addition, penalties for non-compliance with due diligence obligations need to be proportionate. It is therefore important for originators or sponsors to retain exposure to the risk of the loans in question. Accordingly, retention should be applicable to credit risk transfers such as purchase of receivables, syndicated loans or credit default swaps to the extent that their economic substance meets the definition of a securitisation under this Directive. In particular where credit risk is transferred by securitisation, investors should make their decisions only after conducting thorough due diligence, for which they need adequate information about the securitisations. The measures to address the potential misalignment of those structures need to be consistent and coherent in all relevant financial sector regulation. The Commission should put forward appropriate legislative proposals to ensure such consistency and coherence.

Amendment  9

Proposal for a directive – amending act

Recital 15 a (new)

Text proposed by the Commission

Amendment

 

(15a) Due diligence procedures have greater confidence building and cross-checking potential when they are based on an open principle. Therefore whilst respecting data protection and privacy, due diligence performed by or on behalf of originators, sponsors and investors should be open rather than confidential.

Amendment  10

Proposal for a directive – amending act

Recital 15 b (new)

Text proposed by the Commission

Amendment

 

(15b) Member States and competent authorities should ensure that national regulators have sufficient personnel and resources to comply with their supervisory obligations under Article 122a and that employees involved in the oversight of credit institutions in accordance with Article 122a have appropriate knowledge and experience for the duties assigned.

Amendment  11

Proposal for a directive – amending act

Recital 19

Text proposed by the Commission

Amendment

(19) In particular the Commission should be empowered to amend Annex III of Directive 2006/48/EC in order to take account of developments on financial markets or in accounting standards or requirements which take account of Community legislation, or with regard to convergence of supervisory practice and to alter the percentage specified in Article 111(1) of that Directive to take account of developments on financial markets. Since those measures are of general scope and are designed to amend non-essential elements of Directive 2006/48/EC, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.

(19) In particular the Commission should be empowered to amend Annex III of Directive 2006/48/EC in order to take account of developments on financial markets or in accounting standards or requirements which take account of Community legislation or with regard to convergence of supervisory practice. Since those measures are of general scope and are designed to amend non-essential elements of Directive 2006/48/EC, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.

Amendment  12

Proposal for a directive – amending act

Recital 19 a (new)

Text proposed by the Commission

Amendment

 

(19a) The crisis has revealed a need for better analysis of and response to macro-prudential problems - problems which lie at the interface between macro-economic policy and financial system regulation. This will include a need to examine:

 

- policies that exacerbate the ups and downs of the business cycle (including, possibly, exacerbating financial crises by requiring excess capital in downturns and inadequate capital in upturns), and whether banks should build strong capital buffers and make provisions through-the-cycle that can be used during a downturn,

 

- assumptions concerning correlations that underlie the methodologies for calculating regulatory capital, and

 

- introducing a leverage ratio for banks.

 

By 31 December 2009, the Commission should therefore review this Directive as a whole to address those issues and present a report to the European Parliament and the Council and any appropriate proposals.

Amendment  13

Proposal for a directive – amending act

Recital 19 b (new)

Text proposed by the Commission

Amendment

 

(19b) In order to ensure financial stability, the Commission should review and report on measures to enhance the transparency of over-the-counter markets, such as by requiring the processing of credit default swaps through a central clearinghouse counterparty, established, regulated and supervised in the European Union, to mitigate the counterparty risks and more generally to reduce the overall risks, ensuring effective supervision of those entities. The Commission shall submit that report to the European Parliament and the Council together with any appropriate proposals.

Amendment  14

Proposal for a directive – amending act

Recital 19 c (new)

Text proposed by the Commission

Amendment

 

(19c) By 31 December 2009, the Commission should report to the European Parliament and the Council on the appropriateness and expected impact of requiring institutions to retain a material net economic interest in their securitisations in the light of international market and policy developments.

Amendment  15

Proposal for a directive – amending act

Recital 19 d (new)

Text proposed by the Commission

Amendment

 

(19d) The specific characteristics of microcredit should be taken into account in the risk assessment. Furthermore, given the low development of microcredit, the development of adequate rating systems should be promoted. The development of microcredit should be promoted. Prudential regulation and supervision relating to microcredit should be proportionate to the microcredit activities. Such supervision should be adapted to the development of standard rating systems and the reality and risks of microcredit activities.

Amendment  16

Proposal for a directive – amending act

Article 1 – point 3 a (new)

Directive 2006/48/EC

Article 41 – paragraph 1

 

Text proposed by the Commission

Amendment

 

3a. The first paragraph of Article 41 is replaced by the following:

 

"Host Member States shall, pending further coordination, retain responsibility in cooperation with the competent authorities of the home Member State for the supervision of the liquidity of the branches of credit institutions, ensuring that branches are sufficiently liquid."

Amendment  17

Proposal for a directive – amending act

Article 1 – point 4

Directive 2006/48/EC

Article 42a – paragraph 1 – subparagraph 2 – point b

 

Text proposed by the Commission

Amendment

(b) the likely impact of a suspension or closure of the operations of the credit institution on the payment and clearing and settlement systems in the host Member State;

(b) the likely impact of a suspension or closure of the operations of the credit institution on liquidity and the payment and clearing and settlement systems in the host Member State;

Amendment  18

Proposal for a directive – amending act

Article 1 – point 5

Directive 2006/48/EC

Article 42b – paragraph 1

 

Text proposed by the Commission

Amendment

1. In the exercise of their duties, competent authorities shall take into account the convergence in respect of supervisory tools and supervisory practices in the application of the laws, regulations and administrative requirements adopted pursuant to this Directive. For that purpose, Member States shall ensure that the competent authorities participate in the activities of the Committee of European Banking Supervisors and take into account its non-binding guidelines and recommendations.

1. In the exercise of their duties, competent authorities shall take into account the convergence in respect of supervisory tools and supervisory practices in the application of the laws, regulations and administrative requirements adopted pursuant to this Directive. For that purpose, Member States shall ensure that the competent authorities participate in the activities of the Committee of European Banking Supervisors and either comply with its guidelines and recommendations or explain any non-compliance, and that national mandates conferred on supervisors do not inhibit the performance by them of their duties as members of that Committee or under this Directive and that decisions made by competent authorities in the light of Article 40(3) or following recommendations from the Committee shall not give rise to liabilities under their national mandate.

Amendment  19

Proposal for a directive – amending act

Article 1 – point 5

Directive 2006/48/EC

Article 42b – paragraph 2

 

Text proposed by the Commission

Amendment

2. The Committee of European Banking Supervisors shall report to the Council, the European Parliament and the European Commission on the progress made towards supervisory convergence every three years starting from 31 December 2010.

2. The Committee of European Banking Supervisors shall report to the Council, the European Parliament and the European Commission on the progress made towards supervisory convergence every year starting from 1 January 2011.

Amendment  20

Proposal for a directive – amending act

Article 1 – point 6 – point a

Directive 2006/48/EC

Article 49 – paragraph 1 – point a

 

Text proposed by the Commission

Amendment

(a) central banks and other bodies with a similar function in their capacity as monetary authorities when this information is relevant for the exercise of their respective statutory tasks, including the conduct of monetary policy, the oversight of payments and securities settlement systems, and the safeguarding of financial stability ; and

(a) the ECB, central banks and other bodies with a similar function in their capacity as monetary authorities when this information is relevant for the exercise of their respective statutory tasks, including the conduct of monetary policy, the oversight of liquidity, payments and securities settlement systems, systemic risks and the safeguarding of financial stability; and

Amendment  21

Proposal for a directive – amending act

Article 1 – point 6 – point b

Directive 2006/48/EC

Article 49 – paragraph 3 a

 

Text proposed by the Commission

Amendment

In an emergency situation as referred to in Article 130(1), Member States shall allow competent authorities to communicate information to central banks in the Community when this information is relevant for the exercise of their respective statutory tasks, including the conduct of monetary policy, the oversight of payments and securities settlement systems, and the safeguarding of financial stability.

In an emergency situation as referred to in Article 130(1), Member States shall allow competent authorities to communicate information to the ECB and central banks in the Community when this information is relevant for the exercise of their respective statutory tasks, including the conduct of monetary policy, the oversight of liquidity, payments and securities settlement systems, systemic risks and the safeguarding of financial stability.

Amendment  22

Proposal for a directive – amending act

Article 1 – point 7

Directive 2006/48/EC

Article 50 – paragraph 2 a

 

Text proposed by the Commission

Amendment

In an emergency situation as referred to in Article 130(1), Member States shall allow competent authorities to disclose information to the departments referred to in the first paragraph in all Member States concerned.

In an emergency situation as referred to in Article 130(1), Member States shall allow competent authorities to disclose all relevant information to the departments referred to in the first paragraph in all Member States concerned for the purpose of their task.

Amendment  23

Proposal for a directive – amending act

Article 1 – point 8 – point b a (new)

Directive 2006/48/EC

Article 57 – paragraph 3

 

Text proposed by the Commission

Amendment

 

(ba) The third paragraph of Article 57 is replaced by the following:

 

"For the purposes of point (b), the Member States shall permit inclusion of interim or year-end profits before a formal decision has been taken only if these profits have been verified by persons responsible for the auditing of the accounts and if it is proved to the satisfaction of the competent authorities that the amount thereof has been evaluated in accordance with the principles set out in Directive 86/635/EEC and is net of any foreseeable charge or dividend."

Amendment  24

Proposal for a directive – amending act

Article 1 – point 11

Directive 2006/48/EC

Article 63a – paragraph 4

 

Text proposed by the Commission

Amendment

4. The statutory or contractual provisions governing the instrument shall provide for principal, unpaid interest or dividend to be such as to absorb losses and to not hinder the recapitalisation of the credit institution.

4. The statutory or contractual provisions governing the instrument shall provide for principal, unpaid interest or dividend to be such as to absorb losses and to not hinder the recapitalisation of the credit institution through appropriate mechanisms, as elaborated by the Committee of European Banking Supervisors under paragraph 6.

Amendment  25

Proposal for a directive – amending act

Article 1 – point 11

Directive 2006/48/EC

Article 63a – paragraph 6

 

Text proposed by the Commission

Amendment

6. The Committee of European Banking Supervisors shall elaborate guidelines for the convergence of supervisory practices with regard to the instruments referred to in paragraph 1 and shall monitor their application. By January 2012, the Commission shall review the application of this Article and shall report to the Parliament and the Council.

6. The Committee of European Banking Supervisors shall elaborate guidelines for the convergence of supervisory practices with regard to the instruments referred to in paragraph 1 and in Article 57(a) and shall monitor their application. By 31 December 2011, the Commission shall review the application of this Article and shall report to the European Parliament and the Council together with any appropriate proposals to ensure the quality of own funds.

Amendment  26

Proposal for a directive – amending act

Article 1 – point 13 a (new)

Directive 2006/48/EC

TITLE V - Chapter 2 – Section 2 – Subsection 2 – Title

 

Text proposed by the Commission

Amendment

 

(13a) In TITLE V, Chapter 2, Section 2, Subsection 2 the title before Article 74 is replaced by the following:

 

"Calculation of requirements and reporting requirements"

Amendment  27

Proposal for a directive – amending act

Article 1 – point 13 a (new)

Directive 2006/48/EC

Article 74 – paragraph 2 – subparagraph 2 a (new)

 

Text proposed by the Commission

Amendment

13a. In Article 74(2), the following subparagraph is added:

 

"For the communication of those calculations by credit institutions, the competent authorities shall, from 1 January 2013, apply uniform formats, frequencies and dates of reporting. To facilitate this, the Committee of European Banking Supervisors shall, by 31 December 2011, elaborate guidelines to introduce, within the Community, a uniform reporting format. The reporting formats shall be proportionate to the nature, scale and complexity of the credit institutions' activities."

Amendment  28

Proposal for a directive – amending act

Article 1 – point 13 b (new)

Directive 2006/48/EC

Article 81 - paragraph 2

 

Text proposed by the Commission

Amendment

13b. Article 81(2) is replaced by the following:

 

"2. Competent authorities shall recognise an ECAI as eligible for the purpose of Article 80 only if they are satisfied that its assessment methodology complies with the requirements of objectivity, independence, ongoing review and transparency, and that the resulting credit assessments meet the requirements of credibility and transparency. For those purposes, the competent authorities shall take into account the technical criteria set out in Annex VI, Part 2. Where an ECAI is registered as a CRA in accordance with Regulation (EC) No .../2009 of ... * of the European Parliament and of the Council on Credit Rating Agencies**, the competent authorities shall consider that the requirements of objectivity, independence, ongoing review and transparency with respect to its assessment methodology are satisfied.

 

* OJ please insert number and date

** OJ L ... "

Amendment  29

Proposal for a directive – amending act

Article 1 – point 14 – point a

Directive 2006/48/EC

Article 87 – paragraph 11 – subparagraph 1

 

Text proposed by the Commission

Amendment

11. Where exposures in the form of a collective investment undertaking (CIU) meet the criteria set out in Annex VI, Part 1, points 77 and 78 and the credit institution is aware of all or parts of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this Subsection. Paragraph 12 shall apply to the part of the underlying exposures of the CIU the credit institution is not aware of and could not reasonably be aware of.

11. Where exposures in the form of a collective investment undertaking (CIU) meet the criteria set out in Annex VI, Part 1, points 77 and 78 and the credit institution is aware of all or parts of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this Subsection. Paragraph 12 shall apply to the part of the underlying exposures of the CIU the credit institution is not aware of or could not reasonably be aware of. In particular, paragraph 12 shall apply where it would be unduly burdensome for the credit institution to look through the underlying exposures in order to calculate risk-weighted amounts and expected loss amounts in accordance with methods set out in this section.

Amendment  30

Proposal for a directive – amending act

Article 1 – point 14 – point a

Directive 2006/48/EC

Article 87 – paragraph 11 – subparagraph 2 – point b – point i

 

Text proposed by the Commission

Amendment

(i) for exposures subject to a specific risk weight for unrated exposures or subject to the highest credit quality step for a given exposure class, the risk weight shall be multiplied by a factor of 2 but cannot be higher than 1 250 %;

(i) for exposures subject to a specific risk weight for unrated exposures or subject to the credit quality step yielding the highest risk weight for a given exposure class, the risk weight shall be multiplied by a factor of two but cannot be higher than 1 250 %;

Amendment  31

Proposal for a directive – amending act

Article 1 – point 14 – point a

Directive 2006/48/EC

Article 87 – paragraph 11 – subparagraph 3

 

Text proposed by the Commission

Amendment

If, for the purposes of point (a), the credit institution is unable to differentiate between private equity, exchange-traded and other equity exposures, it shall treat the exposures concerned as other equity exposures. Where these exposures, taken together with the credit institution's direct exposures in this exposure class, are not material within the meaning of Article 89(2), Paragraph 1 of that Article may be applied subject to the approval of the competent authorities.

If, for the purposes of point (a), the credit institution is unable to differentiate between private equity, exchange-traded and other equity exposures, it shall treat the exposures concerned as other equity exposures. Without prejudice to Article 154(6), where these exposures, taken together with the credit institution's direct exposures in this exposure class, are not material within the meaning of Article 89(2), paragraph 1 of that Article may be applied subject to the approval of the competent authorities.

Amendment  32

Proposal for a directive – amending act

Article 1 – point 15 a (new)

Directive 2006/48/EC

Article 97 – paragraph 2

 

Text proposed by the Commission

Amendment

15a. Article 97(2) is replaced by the following:

 

"2. The competent authorities shall recognise an ECAI as eligible for the purpose of paragraph 1 only if they are satisfied as to its compliance with the requirements laid down in Article 81, taking into account the technical criteria set out in Annex VI, part 2, and that it has a demonstrated ability in the area of securitisation, which may be evidenced by a strong market acceptance. Where an ECAI is registered as a CRA in accordance with the Regulation (EC) No .../2009 of ...* of the European Parliament and of the Council on Credit Rating Agencies**, the competent authorities shall consider the requirements of objectivity, independence, ongoing review and transparency with respect to its assessment methodology to be satisfied.

 

* OJ please insert number and date.

** OJ L ... "

 

 

Amendment  33

Proposal for a directive – amending act

Article 1 – point 16 – point a

Directive 2006/48/EC

Article 106 – paragraph 2 – point a

 

Text proposed by the Commission

Amendment

(a) in the case of foreign exchange transactions, exposures incurred in the ordinary course of settlement during the 48 hours following payment;

(a) in the case of foreign exchange transactions, exposures incurred in the ordinary course of settlement during the two working days following payment;

Amendment  34

Proposal for a directive – amending act

Article 1 – point 16 – point a

Directive 2006/48/EC

Article 106 – paragraph 2 – point c

 

Text proposed by the Commission

Amendment

(c) in the case of the provision of money transmission or securities clearing and settlement services to clients, delayed receipts in funding and other exposures arising from client activity, which do not last longer than the following business day.

(c) in the case of the provision of money transmission including the execution of payment services, clearing and settlement in any currency and correspondent banking or financial instruments clearing, and settlement and custodian services to clients, delayed receipts in funding and other exposures arising with respect to those services or activities to clients or exposures to providers of those services which do not last longer than the following working day.

Amendment  35

Proposal for a directive – amending act

Article 1 – point 16 – point b

Directive 2006/48/EC

Article 106 – paragraph 3

 

Text proposed by the Commission

Amendment

3. In order to determine the existence of a group of connected clients, in respect of exposures referred to in points (m), (o) and (p) of Article 79(1), where there is an exposure to underlying assets, a credit institution shall assess the scheme and its underlying exposures. For that purpose, a credit institution shall evaluate the economic substance and the risks inherent in the structure of the transaction.

3. In order to determine the existence of a group of connected clients, in respect of exposures referred to in points (m), (o) and (p) of Article 79(1), where there is an exposure to underlying assets, a credit institution shall assess the scheme or its underlying exposures, or both. For that purpose, a credit institution shall evaluate the economic substance and the risks inherent in the structure of the transaction.

Amendment  36

Proposal for a directive – amending act

Article 1 – point 18

Directive 2006/48/EC

Article 110 – paragraph 2

 

Text proposed by the Commission

Amendment

2. Member States shall provide that reporting is to be carried out at least twice a year.

2. Member States shall provide that reporting is to be carried out at least twice a year. Competent authorities shall apply, from 1 January 2013, uniform formats, frequencies and dates of reporting. To facilitate this, the Committee of European Banking Supervisors shall elaborate guidelines to introduce, within the Community, a uniform reporting format by 31 December 2011. The reporting formats shall be proportionate to the nature, scale and complexity of the credit institutions' activities.

Amendment  37

Proposal for a directive – amending act

Article 1 – point 21 – point d

Directive 2006/48/EC

Article 113 – paragraph 4 – point c

 

Text proposed by the Commission

Amendment

(c) notwithstanding point (f) of paragraph 1 of this Article, exposures incurred by a credit institution to its parent undertaking, to other subsidiaries of that parent undertaking or to its own subsidiaries, in so far as those undertakings are covered by the supervision on a consolidated basis to which the credit institution itself is subject, in accordance with this Directive or with equivalent standards in force in a third country; exposures that do not meet these criteria, where exempted from Article 111(1) or not, shall be treated as exposures to a third party.

(c) notwithstanding point (f) of paragraph 1 of this Article, exposures, including participations or other kind of holdings, incurred by a credit institution to its parent undertaking, to other subsidiaries of that parent undertaking or to its own subsidiaries, in so far as those undertakings are covered by the supervision on a consolidated basis to which the credit institution itself is subject, in accordance with this Directive or with equivalent standards in force in a third country; exposures that do not meet these criteria, whether exempted from Article 111(1) or not, shall be treated as exposures to a third party.

Amendment  38

Proposal for a directive – amending act

Article 1 – point 21 – point d

Directive 2006/48/EC

Article 113 – paragraph 4 – point f

 

Text proposed by the Commission

Amendment

(f) asset items constituting claims on and other exposures to institutions, provided that these exposures do not constitute such institutions' own funds, do not last longer than the following business day and are denominated in a currency of the Member State exercising this option, provided that such currency is not the euro."

(f) asset items constituting claims on and other exposures to institutions, provided that these exposures do not constitute such institutions' own funds, do not last longer than the following business day and are not denominated in a major trading currency.

Amendment  39

Proposal for a directive – amending act

Article 1 – point 21 – point d

Directive 2006/48/EC

Article 113 – paragraph 4 – point f a (new)

 

Text proposed by the Commission

Amendment

 

 

 

(fa) asset items constituting claims on central banks in the form of required minimum reserves held at those central banks, and asset items constituting claims on central governments in the form of statutory liquidity requirements held in government securities and which are denominated and funded in the national currencies of the borrowers.

Amendment  40

Proposal for a directive – amending act

Article 1 – point 21 – point d

Directive 2006/48/EC

Article 113 – paragraph 4 – point f b (new)

 

Text proposed by the Commission

Amendment

 

(fb) 50 % of the medium and medium/low risk off-balance-sheet documentary credits and, subject to the competent authorities' agreement, 80 % of guarantees other than loan guarantees which have a legal or regulatory basis and are given for their members by mutual guarantee schemes possessing the status of credit institution.

Amendment  41

Proposal for a directive – amending act

Article 1 – point 21 – point d

Directive 2006/48/EC

Article 113 – paragraph 4 – point f c (new)

 

Text proposed by the Commission

Amendment

 

(fc) legally required guarantees used when a mortgage loan financed by issuing mortgage bonds is paid to the mortgage borrower before the final registration of the mortgage in the land register, provided the guarantee is not used as reducing the risk in calculating the risk weighted assets."

Amendment  42

Proposal for a directive – amending act

Article 1 – point 23

Directive 2006/48/EC

Article 115 – paragraph 1 – subparagraph 2

 

Text proposed by the Commission

Amendment

The value of the property shall be calculated, to the satisfaction of the competent authorities, on the basis of strict valuation standards laid down by law, regulation or administrative provisions. Valuation shall be carried out at least once a year.

The value of the property shall be calculated, to the satisfaction of the competent authorities, on the basis of strict valuation standards laid down by law, regulation or administrative provisions. Valuation shall be carried out at least once every three years for residential real estate.

Amendment  43

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 1

 

Text proposed by the Commission

Amendment

1. A credit institution shall only be exposed to the credit risk of an obligation or potential obligation or a pool of obligations or potential obligations where it was not involved in directly negotiating, structuring and documenting the original agreement which created the obligations or potential obligations, if:

1. A credit institution other than an originator, sponsor or original lender shall only be exposed to the credit risk of a securitisation position in its trading book or non-trading book if the originator, sponsor or original lender has explicitly disclosed to the credit institution that it will retain, on an ongoing basis, a material net economic interest which shall be a significant amount and, in any event, not less than 5% or an equivalent interest in the performance of the securitised exposures.

(a) the persons or entities that directly negotiated, structured and documented the original agreement with the obligor or potential obligor; or alternatively and where applicable,

 

(b) the persons or entities that manage and purchase such obligations or potential obligations directly or indirectly on behalf of the credit institution,

 

have issued an explicit commitment to the credit institution to maintain, on an ongoing basis, a material net economic interest and in any event not less than 5 per cent in positions having the same risk profile as the one that the credit institution is exposed to.

 

 

For the purpose of the first subparagraph, retention of net economic interest shall mean:

 

(a) retention of no less than 5 % of the nominal value of each of the tranches sold or transferred to the investors;

 

(b) in the case of securitisations of revolving exposures, retention of the originator's interest of no less than 5 % of the nominal value of the securitised exposures;

 

(c) retention of randomly selected exposures, equivalent to no less than 5 % of the nominal amount of the securitised exposures, where those would otherwise have been securitised in the securitisation provided that the number of potentially securitised exposures is no less than 100 at the date of securitisation;

 

(d) retention of the first loss tranche and, if necessary, other tranches having the same or more severe risk profile and not maturing any earlier than those transferred or sold to investors, so that the retention equals in total to no less than 5 % of the nominal value of the securitised exposures; or

 

(e) an explicit and unconditional warranty by the originator, a sponsor or original lender, as the case requires, that indicates that the securitised exposures and the obligors meet the asset and obligor criteria in the transaction documentation, or discloses any variations therefrom, and that due diligence was carried out by the originator, sponsor, or original lender in respect thereof, including the risk profiles thereof.

 

Net economic interest is measured at the date of securitisation; and shall be maintained on an on-going basis. It shall not be subject to credit risk mitigation, short positions, or other hedge. The net economic interest shall be determined by the notional value for off-balance sheet items.

 

For the purpose of this Article, 'on-going basis' shall mean that retained positions, interest or exposures shall not be hedged or sold.

 

There shall be no multiple applications of the retention requirements for any given securitisation.

Amendment  44

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 2

 

Text proposed by the Commission

Amendment

2. Paragraph 1 shall not apply to obligations or potential obligations that constitute claims or contingent claims on or guaranteed by:

2. Paragraph 1 shall not apply when the securitised exposures are claims or contingent claims on or wholly, unconditionally and irrevocably guaranteed by:

(a) central governments or central banks;

(a) central governments or central banks;

 

(b) regional governments, local authorities and public sector entities of Member States;

(b) institutions to which a credit quality step of 3 or better applies according to Annex VI, Part 1, point 29; and

(c) institutions to which a 50 % risk weight or less is assigned under Articles 78 to 83; and

(c) multilateral development banks.

(d) multilateral development banks.

 

 

Paragraph 1 shall not apply either to syndicated loans or credit default swaps where these instruments are not used to package and/or hedge an obligation that is covered by paragraph 1.

Paragraph 1 shall not apply to:

 

(a) transactions based on a clear, transparent and accessible index, where the underlying reference entities are identical to those that make up an index of entities that is widely traded, or are other tradable securities other than securitisation positions;

 

(b) syndicated loans, purchased receivables or credit default swaps where these instruments are not used to package and/or hedge a securitisation that is covered by paragraph 1.

Amendment  45

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 3

 

Text proposed by the Commission

Amendment

3. Paragraphs 1 and 2 shall apply to exposures incurred by the credit institution after 1 January 2011. Competent authorities may decide to temporarily suspend the requirements during periods of general market liquidity stress.

deleted

Amendment  46

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 4

 

Text proposed by the Commission

Amendment

4. Before investing and on an ongoing basis, credit institutions shall be able to demonstrate at all times to the competent authorities for each of their individual securitisation positions that they have a comprehensive and thorough understanding of and have implemented formal policies and procedures for analysing and recording, in writing:

4. Before investing, and as appropriate thereafter, credit institutions, other than originators or sponsors or original lenders, shall be able to demonstrate to the competent authorities for each of their individual securitisation positions, that they have a comprehensive and thorough understanding of and have implemented formal policies and procedures appropriate to their trading book and non-trading book and commensurate with the risk profile of their investments in securitised positions for analysing and recording:

(a) the commitment, under paragraph 1, of originators and/or sponsors to maintain a net economic interest in the securitisation and the period for which such commitment is given;

(a) information disclosed under paragraph 1, by originators or sponsors to specify the net economic interest that they maintain, on an ongoing basis, in the securitisation;

(b) the risk characteristics of the individual securitisation position;

(b) the risk characteristics of the individual securitisation position;

(c) the risk characteristics of the exposures underlying the securitisation position;

(c) the risk characteristics of the exposures underlying the securitisation position;

(d) the reputation and loss experience in earlier securitisations of the originators in the relevant exposure classes underlying the securitization position;

(d) the reputation and loss experience in earlier securitisations of the originators or sponsors in the relevant exposure classes underlying the securitisation position;

(e) the statements made by the originators and sponsors about the due diligence undertaken by them on the obligors and, where applicable, on the collateral quality of the exposures underlying the securitization position;

(e) the statements made by the originators or sponsors, or their agents or advisors, about their due diligence on the securitised exposures and, where applicable, on the quality of the collateral supporting the securitised exposures, due diligence by or on behalf of the originators or sponsors should be available under the principle of open due diligence;

(f) where applicable, the methodologies and concepts on which the valuation of collateral supporting the exposures underlying the securitization position is based and the policies adopted by the originators to ensure the independence of the valuer; and

(f) where applicable, the methodologies and concepts on which the valuation of collateral supporting the securitised exposures is based and the policies adopted by the originator or sponsor to ensure the independence of the valuer; and

(g) all the structural features of the securitisation that can materially impact the performance of the credit institution's securitisation position. To this end, credit institutions shall prior to investing and regularly thereafter perform and record appropriate stress tests, such stress tests to be conducted independently of the ECAI or ECAIs who have rated the securitisation and to be based on all relevant information provided by the originator for this purpose.

(g) all the structural features of the securitisation that can materially impact the performance of the credit institution's securitisation position.

 

Credit institutions shall regularly perform their own stress tests appropriate to their securitisation positions. To this end, credit institutions may rely on stress tests performed by an ECAI provided that credit institutions can demonstrate, when requested, that they understand methodology, assumptions and results.

Amendment  47

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 5

 

Text proposed by the Commission

Amendment

5. Credit institutions shall establish formal procedures to monitor on an ongoing basis and in a timely manner performance information on the exposures underlying their securitisation positions. Where relevant, this shall include, at a minimum: the exposure type, the length of time the exposures have been held by the originator including the percentage held by the originator for less than 2 years, the percentage of loans more than 30, 60 and 90 days past due, default rates, prepayment rates, loans in foreclosure, collateral type and occupancy, frequency distribution of credit scores or other measures of credit worthiness across underlying exposures, industry and geographical diversification, frequency distribution of loan to value ratios with band widths that facilitate adequate sensitivity analysis. Where the underlying exposures are themselves securitisation positions, the requirements to monitor and be able to access information shall apply to the exposures underlying these securitisation positions. Where the requirements in paragraph 4 and in this paragraph are not met, credit institutions shall apply a risk weight of 1250% to these securitisation positions under Annex IX, part 4.

5. Before investing, and as appropriate thereafter, credit institutions, other than originators or sponsors or original lenders, shall establish formal procedures appropriate to their trading book and non-trading book and commensurate with the risk profile of their investments in securitised positions to monitor on an ongoing basis and in a timely manner performance information on the exposures underlying their securitisation positions. Where relevant, this shall include: the exposure type, the percentage of loans more than 30, 60 and 90 days past due, default rates, prepayment rates, loans in foreclosure, collateral type and occupancy, frequency distribution of credit scores or other measures of credit worthiness across underlying exposures, industry and geographical diversification, frequency distribution of loan to value ratios with band widths that facilitate adequate sensitivity analysis. Where the underlying exposures are themselves securitisation positions, credit institutions shall have the above-listed information not only on the underlying securitisation tranches, such as the issuer name and credit quality, but also on the characteristics and performance of the pools underlying these securitisation tranches.

 

Credit institutions shall have a thorough understanding of all structural features of a securitisation transaction that would materially impact the performance of their exposures to the transaction such as the contractual waterfall and waterfall related triggers, credit enhancements, liquidity enhancements, market value triggers, and deal-specific definition of default.

 

Where the requirements in paragraphs 4 and 7 and in this paragraph are not met in any material respect by reason of the negligence or omission of the credit institution, the competent authority shall impose a proportionate penalty of 150 % of the risk weight (capped at 1 250 %) which would, but for this paragraph, apply to the relevant securitisation positions under Annex IX, part 4. The competent authority shall take into account the exemptions for certain securitisations provided in paragraph 2 by reducing the penalty it would otherwise impose under this provision in respect of a securitisation to which paragraph 2 applies.

Amendment  48

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 6

 

Text proposed by the Commission

Amendment

6. Sponsor and originator credit institutions shall apply the same sound and well-defined criteria for credit-granting in accordance with the requirements of Annex V, point 3 to exposures to be securitised as they apply to exposures to be held on their own non-trading book. To this end the same processes for approving and, where relevant, amending, renewing and re-financing credits shall be applied by the originator and sponsor credit institutions. Credit institutions shall also apply the same standards of analysis to participations and/or underwritings in securitization issues purchased from third parties whether such participations and/or underwritings are to be held on their trading or non-trading book.

6. Sponsor and originator credit institutions shall apply the same sound and well-defined criteria for credit-granting in accordance with the requirements of Annex V, point 3 to exposures to be securitised as they apply to exposures to be held on their own non-trading book. To this end the same processes for approving and, where relevant, amending, renewing and re-financing credits shall be applied by the originator and sponsor credit institutions. Credit institutions shall also apply the same standards of analysis to participations and/or underwritings in securitisation issues purchased from third parties whether such participations and/or underwritings are to be held on their trading or non-trading book.

 

Where the requirements in paragraph 6 are not met, Article 95(1) shall not be applied by an originator credit institution which will not be allowed to exclude the securitised exposures from the calculation of its capital requirements under this Directive.

Amendment  49

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 7

 

Text proposed by the Commission

Amendment

7. Sponsor and originator credit institutions shall disclose to investors the level of their commitment under paragraph 1 to maintain a net economic interest in the securitisation. Sponsor and originator credit institutions shall ensure that prospective investors have readily available access to all materially relevant data on the credit quality and performance of the individual underlying exposures, cash flows and collateral supporting a securitization exposure as well as such information that is necessary to conduct comprehensive and well informed stress tests on the cash flows and collateral values supporting the underlying exposures. Where these requirements and those in paragraph 6 are not met, Article 95 (1) shall not be applied by an originator credit institution which will not be allowed to exclude the securitised exposures from the calculation of its capital requirements under this Directive.

7. Sponsor and originator credit institutions shall disclose to investors the level of their commitment under paragraph 1 to maintain a net economic interest in the securitisation. Sponsor and originator credit institutions shall ensure that prospective investors have readily available access to all materially relevant data on the credit quality and performance of the individual underlying exposures, cash flows and collateral supporting a securitisation exposure as well as such information that is necessary to conduct comprehensive and well informed stress tests on the cash flows and collateral values supporting the underlying exposures. For this purpose, 'materially relevant data' shall be determined on the date of the securitisation.

Amendment  50

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 8

 

Text proposed by the Commission

Amendment

8. Paragraphs 4 to 7 shall apply to securitisations issued from the date that this Directive comes into effect and to existing securitisations where new underlying exposures are added or substituted after that date.

8. Paragraphs 1 to 7 shall apply to new securitisations issued from 1 January 2011. Paragraphs 1 to 7 shall apply from 1 January 2014 to existing securitisations where new underlying exposures are added or substituted after that date. Competent authorities may decide temporarily to suspend the requirements referred to in paragraphs 1 and 2 during periods of general market liquidity stress.

Amendment  51

Proposal for a directive – amending act

Article 1 – point 27

Directive 2006/48/EC

Article 122a – paragraph 10

 

Text proposed by the Commission

Amendment

10. The Committee of European Banking Supervisors will report annually to the Commission about the compliance by competent authorities with this Article. The Commission shall, no later than December 2014, report to the European Parliament and the Council on the application and effectiveness of this Article in the light of market developments."

10. The Committee of European Banking Supervisors will report annually to the Commission about the compliance by competent authorities with this Article. The Committee of European Banking Supervisors shall elaborate guidelines for the convergence of supervisory practices with regard to the penalties imposed by competent authorities under this Article.

Amendment  52

Proposal for a directive – amending act

Article 1 – point 28 – point a – point i

Directive 2006/48/EC

Article 129 – paragraph 1 – point b

 

Text proposed by the Commission

Amendment

(b) planning and coordination of supervisory activities in going concern situations, including in relation to the activities referred to in Articles 123, 124, 136, in Chapter 5 and in Annex V, in cooperation with the competent authorities involved;

(b) planning and coordination of supervisory activities in going concern situations, including in relation to the activities referred to in Articles 123, 124, 136, in Chapter 5 and in Annex V, in cooperation with the competent authorities and central banks involved;

Amendment  53

Proposal for a directive – amending act

Article 1 – point 28 - point b

Directive 2006/48/EC

Article 129 – paragraph 3 –subparagraph 1 – point a

 

Text proposed by the Commission

Amendment

(a) on the application of Articles 123 and 124 to determine the adequacy of the consolidated level of own funds held by the group with respect to its financial situation and risk profile and consequently, the required level of own funds for the application of Articles 136(2) to each entity within the banking group and on a consolidated basis;

(a) on the application of Articles 123 and 124 to determine the adequacy of the consolidated level of own funds held by the group with respect to its financial situation and risk profile and the required level of own funds for the application of Articles 136(2) to each entity within the banking group and on a consolidated basis.

Amendment  54

Proposal for a directive – amending act

Article 1 – point 28 - point b

Directive 2006/48/EC

Article 129 – paragraph 3 –subparagraph 1 - point b

 

Text proposed by the Commission

Amendment

(b) on uniform formats, frequencies and dates of reporting for the application of Article 74(2) to all entities within the banking group.

deleted

Amendment  55

Proposal for a directive – amending act

Article 1 – point 28 – point b

Directive 2006/48/EC

Article 129 – paragraph 3 – subparagraph 2

 

Text proposed by the Commission

Amendment

For the purposes of point (a), the joint decision shall be reached six months after submission by the consolidating supervisor of a report containing the risk assessment of the group in accordance with Articles 124 and 123 to the other relevant competent authorities.

The joint decision shall be reached three months after submission by the consolidating supervisor of a report containing the risk assessment of the group in accordance with Articles 123 and 124 to the other relevant competent authorities. The joint decision shall duly consider the risk assessment of subsidiaries performed by relevant competent authorities in accordance with Articles 123 and 124.

Amendment  56

Proposal for a directive – amending act

Article 1 – point 28 – point b

Directive 2006/48/EC

Article 129 – paragraph 3 – subparagraph 3

 

Text proposed by the Commission

Amendment

For the purposes of point (b), the joint decision shall be reached by 30 June 2011.

deleted

Amendment  57

Proposal for a directive – amending act

Article 1 – point 28 – point b

Directive 2006/48/EC

Article 129 – paragraph 3 – subparagraph 4

 

Text proposed by the Commission

Amendment

The joint decision referred to in the first subparagraph shall be set out in a document containing the fully reasoned decision which shall be provided to the EU parent credit institution by the consolidating supervisor. In case of disagreement, the consolidating supervisor shall at the request of any of the other competent authorities concerned consult the Committee of European Banking Supervisors. The consolidating supervisor may consult the Committee of European Banking Supervisors on its own initiative.

The joint decision shall be set out in a document containing the fully reasoned decision which shall be provided to the EU parent credit institution by the consolidating supervisor. In case of disagreement, the consolidating supervisor shall at the request of any of the other competent authorities concerned consult the Committee of European Banking Supervisors. The consolidating supervisor may consult the Committee of European Banking Supervisors on its own initiative.

Amendment  58

Proposal for a directive – amending act

Article 1 – point 28 – point b

Directive 2006/48/EC

Article 129 – paragraph 3 – subparagraph 5

 

Text proposed by the Commission

Amendment

In the absence of such a joint decision between the competent authorities within six months, the consolidating supervisor shall make its own decision on the application of Articles 74(2), 123, 124 and 136(2). The decision shall be set out in a document containing the fully reasoned decision and shall take into account the views and reservations of the other competent authorities expressed during the six months period. The decision shall be provided to the other competent authorities by the consolidating supervisor.

In the absence of such a joint decision between the competent authorities within three months, the decision on the application of Articles 123 and 124 and Article 136(2) shall be taken on a consolidated basis by the consolidating supervisor after duly considering the risk assessment performed by relevant competent authorities. The decision on the application of Articles 123 and 124 and Article 136(2) shall be taken by the competent authorities responsible for supervision of subsidiaries of and EU parent credit institution or an EU parent financial holding company on an individual or sub-consolidated basis after duly considering the views and reservations expressed by the consolidating supervisor. The decision shall be set out in a document containing the fully reasoned decision and shall take into account the risk assessment, views and reservations of the other competent authorities expressed during the three-month period. The decision shall be provided to the other competent authorities by the consolidating supervisor.

Amendment  59

Proposal for a directive – amending act

Article 1 – point 28 – point b

Directive 2006/48/EC

Article 129 – paragraph 3 – subparagraph 6

 

Text proposed by the Commission

Amendment

Where the Committee of European Banking Supervisors has been consulted, the consolidating supervisor shall consider such advice, and explain any significant deviation there from.

Where the Committee of European Banking Supervisors has been consulted, all competent authorities shall consider such advice, and explain any significant deviation therefrom.

Amendment  60

Proposal for a directive – amending act

Article 1 – point 28 – point b

Directive 2006/48/EC

Article 129 – paragraph 3 – subparagraph 7

 

Text proposed by the Commission

Amendment

The joint decision referred to in the first subparagraph and the decision referred to in the sixth subparagraph shall be recognised as determinative and applied by the competent authorities in the Member State concerned.

The joint decision referred to in the first subparagraph and the decisions taken by the competent authorities in the absence of a joint decision shall be recognised as determinative and applied by the competent authorities in the Member State concerned.

 

The Committee of European Banking Supervisors shall determine procedures for the convergence of supervisory practices with regard to the joint decision process referred to in this paragraph and with regard to application of Articles 123 and 124 and Article 136(2) with a view to facilitating joint decisions.

Amendment  61

Proposal for a directive – amending act

Article 1 – point 29

Directive 2006/48/EC

Article 130 – paragraph 1 – subparagraph 1

 

Text proposed by the Commission

Amendment

1. Where an emergency situation, including adverse developments in financial markets, arises, which potentially jeopardises the stability of the financial system in any of the Member States where entities of a group have been authorised or where systemically relevant branches as referred to in Article 42a are established, the consolidating supervisor shall, subject to Chapter 1, Section 2, alert as soon as is practicable, the authorities referred to in the fourth subparagraph of Article 49 and in Article 50, and shall communicate all information that is essential for the pursuance of their tasks. These obligations shall apply to all competent authorities under Articles 125 and 126 and to the competent authority identified under Article 129(1).

1. Where an emergency situation, including adverse developments in financial markets, arises, which potentially jeopardises the liquidity and the stability of the financial system in any of the Member States where entities of a group have been authorised or where systemically relevant branches as referred to in Article 42a are established, the consolidating supervisor shall, subject to Chapter 1, Section 2, alert as soon as is practicable, the authorities referred to in the fourth subparagraph of Article 49 and in Article 50, and shall communicate all information that is essential for the pursuance of their tasks. These obligations shall apply to all competent authorities under Articles 125 and 126 and to the competent authority identified under Article 129(1).

Amendment  62

Proposal for a directive – amending act

Article 1 – point 30

Directive 2006/48/EC

Article 131a – paragraph 1 – subparagraph 1

 

Text proposed by the Commission

Amendment

1. The consolidating supervisor shall establish colleges of supervisors to facilitate the exercise of the tasks referred to in Articles 129 and 130(1).

1. The consolidating supervisor shall establish colleges of supervisors to facilitate the exercise of the tasks referred to in Article 129 and Article 130(1) and, in compatibility with Community law, ensure appropriate coordination and cooperation with relevant third country competent authorities.

Amendment  63

Proposal for a directive – amending act

Article 1 – point 30

Directive 2006/48/EC

Article 131a – paragraph 2 – subparagraph 2

 

Text proposed by the Commission

Amendment

The Committee of European Banking Supervisors shall elaborate guidelines for the operational functioning of colleges.

The Committee of European Banking Supervisors shall elaborate guidelines for the operational functioning of colleges. The consolidating supervisor shall consider such guidelines, and explain any significant deviation therefrom.

Amendment  64

Proposal for a directive – amending act

Article 1 – point 30

Directive 2006/48/EC

Article 131a – paragraph 2 – subparagraph 5

 

Text proposed by the Commission

Amendment

The decision of the consolidating supervisor shall take account of the relevance of the supervisory activity to be planned or coordinated for those authorities, and the obligations referred to in Articles 40(3) and 42a(2).

The decision of the consolidating supervisor shall take account of the relevance of the supervisory activity to be planned or coordinated for those authorities, in particular the potential impact on the stability of the financial system in the Member States concerned referred to in Article 40(3) and Article 42a(2).

Amendment  65

Proposal for a directive – amending act

Article 1 – point 32 –point a – point ii

Directive 2006/48/EC

Article 150 – paragraph 1 – point m

 

Text proposed by the Commission

Amendment

(ii) the following point (m) is added:

deleted

"(m) alteration of the amount and the percentage specified in Article 111(1) to take account of developments on financial markets."

 

Amendment  66

Proposal for a directive – amending act

Article 1 – point 32 a (new)

Directive 2006/48/EC

Article 153 – paragraph 3

 

Text proposed by the Commission

Amendment

(32a) The third paragraph of Article 153 is replaced by the following:

 

"In the calculation of risk weighted exposure amounts for the purposes of Annex VI, Part 1, point 4, until 31 December 2015 the same risk weight shall be assigned in relation to exposures to Member States' central governments or central banks denominated and funded in the domestic currency of any Member State as would be applied to such exposures denominated and funded in their domestic currency."

Amendment  67

Proposal for a directive – amending act

Article 1 – point 33

Directive 2006/48/EC

Article 154 – paragraph 9 a (new)

 

Text proposed by the Commission

Amendment

9a. Credit institutions that, as at 31 December 2009, in accordance with national law, apply a preferential treatment of interbank exposures to asset items constituting claims on and other exposures to institutions may continue to assign those preferential weightings to items incurred up to the date of maturity and no later than 31 December 2013.

Amendment  68

Proposal for a directive – amending act

Article 1 – point 33 a (new)

Directive 2006/48/EC

Article 156 – paragraph 2 a (new)

 

Text proposed by the Commission

Amendment

 

(33a) In Article 156, the following paragraph 2a is inserted:

 

"By 31 December 2009, the Commission shall review this Directive as a whole to address the need for better analysis of and response to macro-prudential problems, including an examination of:

 

- policies that exacerbate the ups and downs of the business cycle, the need for banks to build strong capital buffers and for provisioning through-the-cycle that can be used during a downturn;

 

- assumptions concerning correlations that underlie the methodologies for calculating regulatory capital; and

 

- introduction of a leverage ratio for banks,

 

The Commission shall submit a report in relation to the review referred to in the first subparagraph to the European Parliament and to the Council with any appropriate proposals."

Amendment  69

Proposal for a directive – amending act

Article 1 – point 33 a (new)

Directive 2006/48/EC

Article 156 – paragraph 2 b (new)

 

Text proposed by the Commission

Amendment

 

(33a) In Article 156, the following paragraph 2b is inserted:

"The Commission shall as soon as possible and by 31 December 2009 present to the European Parliament and the Council a report on the need for further reform of the supervisory system, including Article 129 of this Directive and related provisions, together with, in accordance with the applicable procedure under the Treaty, any appropriate proposals."

Amendment  70

Proposal for a directive – amending act

Article 1 – point 33 c (new)

Directive 2006/48/EC

Article 156 – paragraph 3

 

Text proposed by the Commission

Amendment

(33a) In Article 156, paragraph 3 is replaced by the following:

 

"By 31 December 2011, the Commission shall review and report on the application of this Directive with particular attention to all aspects of Articles 68 to 73, Article 80(7), Article 80(8) and its application to microcredit finance and shall submit that report to the European Parliament and the Council, together with any appropriate proposals."

Amendment  71

Proposal for a directive – amending act

Article 1 – point 33 a (new)

Directive 2006/48/EC

Article 156 – paragraph 3 a (new)

 

Text proposed by the Commission

Amendment

 

(33a) In Article 156, the following paragraph 3a is added:

 

"By 31 December 2011, the Commission shall review and report on Article 113 including whether exemptions should be a matter of national discretion and shall submit that report to the European Parliament and the Council, together with any appropriate proposals. In the absence of such proposals, the exemptions under subparagraph 4 of Article 113 shall cease to be a matter of national discretion from 1 January 2015."

Amendment  72

Proposal for a directive – amending act

Article 1 – point 33 a (new)

Directive 2006/48/EC

Article 156 – paragraph 3 b (new)

 

Text proposed by the Commission

Amendment

(33a) In Article 156, the following paragraph 3b is added:

 

"By 31 December 2009, the Commission shall review and report on measures to enhance transparency of over-the-counter markets, including the credit-default swap markets, such as by requiring clearing through a central counterparty, and shall submit that report to the European Parliament and the Council, together with any appropriate proposals."

Amendment  73

Proposal for a directive – amending act

Article 1 – point 33 a (new)

Directive 2006/48/EC

Article 156 – paragraph 3 c (new)

 

Text proposed by the Commission

Amendment

(33a) In Article 156, the following paragraph 3c is added:

 

"By 31 December 2009, the Commission shall report on Article 122a, and shall submit that report to the European Parliament and the Council, together with any appropriate proposals."

Amendment  74

Proposal for a directive – amending act

Article 1 – point 35 – point -a (new)

Directive 2006/48/EC

Annex V – part 6 – point 8

 

Text proposed by the Commission

Amendment

(-a) Point 8 is replaced by the following:

 

"8. The risks arising from securitisation transactions in relation to which the credit institutions are investor, originator or sponsor, including reputational risks such as arise in relation to complex structures or products shall be evaluated and addressed through appropriate policies and procedures, to ensure in particular that the economic substance of the transaction is fully reflected in the risk assessment and management decisions."

Amendment  75

Proposal for a directive – amending act

Article 1 – point 35 a (new)

Directive 2006/48/EC

Annex VI – part 2 – item 1.4 – point 7 – paragraph 1 a (new)

 

Text proposed by the Commission

Amendment

(35a) In Annex VI, Part 2, item 1.4, point 7 the following subparagraph is added:

 

"Competent authorities shall, furthermore, take the necessary measures to ensure that, with regard to credit assessments relating to structured finance instruments, the ECAI is committed to make available publicly the explanation how the performance of pool assets affects its credit assessments."

Amendment  76

Proposal for a directive – amending act

Article 2 – point 7

Directive 2006/49/EC

Article 45 – paragraph 1

 

Text proposed by the Commission

Amendment

(7) In Article 45(1) the date "31 December 2010" is replaced by "31 December 2012".

(7) In Article 45(1) the date "31 December 2010" is replaced by "31 December 2014".

Amendment  77

Proposal for a directive – amending act

Article 2 – point 7 a (new)

Directive 2006/49/EC

Article 47

 

Text proposed by the Commission

Amendment

 

(7a) In Article 47 the date "31 December 2009" is replaced by "31 December 2010".

Amendment  78

Proposal for a directive – amending act

Article 2 – point 8

Directive 2006/49/EC

Article 48 – paragraph 1

 

Text proposed by the Commission

Amendment

(8) In Article 48(1) the date "31 December 2010" is replaced by "31 December 2012".

(8) In Article 48(1) the date "31 December 2010" is replaced by "31 December 2014".

Amendment  79

Proposal for a directive – amending act

Article 2 a (new)

Directive 2007/64/EC

Article 1 – paragraph 1 – point a

 

Text proposed by the Commission

Amendment

 

Article 2a

 

Amendment to Directive 2007/64/EC

 

Article 1(1)(a) of Directive 2007/64/EC is replaced by the following:

 

"(a) credit institutions within the meaning of Article 4(1)(a) of Directive 2006/48/EC, including branches within the meaning of Article 4(3) of that Directive located in the Community of credit institutions having their head offices inside or, in accordance with Article 38 of that Directive, outside the Community;"

Amendment  80

Proposal for a directive – amending act

Article 3 – Paragraph 1

Text proposed by the Commission

Amendment

1 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 January 2010 at the latest. They shall forthwith communicate to the Commission the text of those provisions and a correlation table between those provisions and this Directive.

1 Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 October 2010 at the latest.

They shall apply those provisions from 31 March 2010.

They shall apply those measures from 1 January 2011.

 

 

When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

When Member States adopt those measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.


EXPLANATORY STATEMENT

1. Context of the CRD, reasons for Revision and rapporteur´s position

The Rapporteur in general welcomes the Commission's work as a step forward to improve prudential regulation, to increase the stability of the financial system and to improve supervisory arrangements of cross-border banking groups.

The proposal is often seen or presented as one of the answers to the financial crisis. However, many amendments are due to revision clauses built in the CRD of June 2006. Furthermore, much market disruption has occurred only after the CRD proposal had been put on the table.

While the Commission has made significant efforts to incorporate in its proposal several areas of weaknesses which have been highlighted by the financial crisis, such as liquidity risk management and securitisation, some important conclusions in the numerous reports of standard setters and international bodies were not reflected in the Commission proposal. These include conclusions concerning pro-cyclicality and geographic and product concentration. It is evident that the pro-cyclicality issue has become much more important and there is a consensus that any pro-cyclicality in capital adequacy rules and accounting valuations needs to be tackled. The Rapporteur believes that there is a need to review the pro-cyclicality issue and proposes a review clause for this purpose.

The Rapporteur points out that the European Parliament has already called upon the Commission to be more active in the financial sector regarding, for example, supervisory arrangements, regulation of rating agencies (also with regard to the role attributed to rating agencies - ECAIs - under the CRD) and harmonised minimum standards for various financial products(1). In this context, and regarding any rules applicable for rating agencies, it is very important to highlight the need for a consistent and coherent approach between the revision of the CRD and the proposal for a Regulation on Credit Rating Agencies.

1.1. Supervisory arrangements

The proposed colleges of supervisors are a temporary step forward towards a new EU architecture of supervision. The financial crisis has highlighted weaknesses in EU supervision and in the consolidating supervisor model. Further supervisory integration is necessary. The Commission should come up with a proposal which takes into account the lessons of the financial crisis. The proposal should address financial stability in the EU and reflect the outcome of parallel discussions on supervisory arrangements, including the upcoming report of the High level Group on cross-border financial supervision under the leadership of J. de Larosière. Such proposal could, building on the model of the European System of Central Banks, aim to establish a decentralised European System of Banking Supervisors.

The Rapporteur believes that the crisis has revealed weaknesses in the current EU arrangements for supervision. Furthermore, national competent authorities do not have the ability to foresee and to handle a cross-border financial crisis efficiently and in a coordinated manner. The financial crisis has also highlighted weaknesses of consolidating supervisor model. Given the advanced integration of the banking sector in the EU, and having regard to the weaknesses in present supervisory arrangements, there is a need to find a balanced solution to the EU supervisory arrangements, which, on the one hand, would improve the effectiveness of supervision, strengthen financial stability and rebuild trust in banks and financial services more generally and, on the other hand, would facilitate the business of cross-border entities.

The Rapporteur welcomes the proposal to establish colleges of supervisors for all cross-border banks and to require supervisors participating in those colleges to discuss and agree on specific issues with mediation mechanism via the Committee of European Banking Supervisors (CEBS). Strengthened cooperation and information exchange in crisis management are also welcomed.

However, he considers that the colleges of supervisors are a temporary step towards a new architecture of supervision. As regards the role of the consolidating supervisor and reinforcing its power (such as giving it the final say if a joint decision on reporting and capital add-on has not been reached by a college), the Rapporteur respects the concerns of Member States that are the in position of host country regarding the proposed role of the "Lead Supervisor".

In order to achieve the necessary level of EU supervisory convergence and cooperation, and to underpin the stability of the financial system, further supervisory integration must be pursued. The Rapporteur believes such integration should result into a decentralised European System of Banking Supervisors building on the model of the European System of Central Banks. To this purpose the Commission should come up with appropriate proposals by January 1, 2010. The Commission should also take into account the outcomes of discussions by expert groups on these issues, in particular, those of the High Level Group on cross-border financial supervision (Larosière Group) and the lessons from the financial crisis.

As the mandatory colleges should also play a role in any new EU architecture of supervision, the current text is welcomed. Consistency between colleges and coordination of colleges should be ensured via CEBS guidelines. For the time being the consolidated supervisor should have the last say on the consolidated level, whereas the last say on the local level should remain with the competent authorities responsible for supervision at this level.

Single European reporting should be put in place by the end of 2012, as different reporting in various colleges would not lead to further supervisory integration.

1.2. Securitisation

The Rapporteur in general welcomes stricter rules on securitisation. He agrees that originators should hold a certain percentage of the risk arising from the exposures that they securitise and that further due diligence should be required from the investor. Detailed information has to be available to investors, who should be required to carry out more rigorous analysis.

The Rapporteur also considers that there is a need to rebuild trust in the securitisation market and that any new rules should not disable the functioning of the market. Hence his proposed amendments to the Commission proposal take into account the legitimate concerns of industry and the need for more security for investors.

The Rapporteur proposes that one should distinguish between securitisations, where the originator or sponsor retains an interest in the underlying assets and originates those assets, and securitisations, where the originator or sponsor has no such involvement. In the former case the interests of the originator or sponsor and the investors are already aligned, so that the rationale for much of the Commission proposal falls away. In the latter case the rationale applies and the retention should be more substantial at 10 per cent to be an effective deterrent.

The Commission's proposed penalty for non-compliance with disclosure and due diligence obligations should be scaled according to the gravity of the failure and reflect the relevant supervisor's judgement.

1.3. Large exposures

The Rapporteur agrees with the Commission proposals for the large exposure regime. As inter-bank exposures are not risk-free the adjustments and simplification of the regime are welcomed. Despite the amendments to the large exposure regime the liquidity of the banking system seems to be assured. In addition, the regulation for smaller banks seems appropriate.

The Rapporteur is of the view that the Commission proposal to add comitology powers to alter the percentage limit for large exposures goes beyond what is strictly necessary (which is limited to adding Annex III to the annexes that the Commission can already amend by comitology).

1.4. Hybrids

The Rapporteur welcomes clear and harmonised EU regulation of hybrids (securities that contain features of both equity and debt). This should improve the quality of capital, while providing choice to investors. The rules on hybrids have been previously agreed in the Basel Committee on Banking Supervision, but had not been implemented in EU regulation. However, the financial crisis demonstrates how important a strong core capital buffer is for banks when facing turbulent times. Therefore, the Rapporteur proposes an amendment that further underlines the importance of a strong core capital base able to absorb losses. The Rapporteur also proposes some further precision and clarification in the recital proposed by the Commission.

1.5. Liquidity risk management

The Rapporteur agrees that the current market turmoil has highlighted the fact that liquidity and liquidity risk management is of key importance for the soundness of the banking sector and for financial stability. He therefore welcomes the proposed changes, which implement the work of CEBS and the Basel Committee.

1.6. Rating agencies

The Parliament has already pointed out in relation to the Commission CRD comitology proposal that regulation of credit rating agencies ("ECAIs" in CRD terminology) should be consistent and coherent. In practice, this means aligning the regulation of credit rating agencies (CRAs) in the CRD with the new CRA Regulation and adding the comitology proposal concerning ECAIs, appropriately revised, to either of these co-decision proposal.

(1)

f.e. Ieke van den Burg and Daniel Dăianu: report with recommendations to the Commission on Lamfalussy follow-up: future structure of supervision (2008/2148(INI))


PROCEDURE

Title

Capital Requirements Directives (2006/48/EC and 2006/49/EC)

References

COM(2008)0602 – C6-0339/2008 – 2008/0191(COD)

Date submitted to Parliament

1.10.2008

Committee responsible

       Date announced in plenary

ECON

9.10.2008

Committee(s) asked for opinion(s)

       Date announced in plenary

JURI

9.10.2008

 

 

 

Not delivering opinions

       Date of decision

JURI

3.11.2008

 

 

 

Rapporteur(s)

       Date appointed

Othmar Karas

22.4.2008

 

 

Discussed in committee

20.10.2008

4.11.2008

11.12.2008

2.2.2009

 

11.2.2009

 

 

 

Date adopted

9.3.2009

 

 

 

Result of final vote

+:

–:

0:

21

4

8

Members present for the final vote

Paolo Bartolozzi, Zsolt László Becsey, Pervenche Berès, Sharon Bowles, Udo Bullmann, Jonathan Evans, Elisa Ferreira, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Robert Goebbels, Donata Gottardi, Benoît Hamon, Gunnar Hökmark, Sophia in ‘t Veld, Othmar Karas, Wolf Klinz, Kurt Joachim Lauk, Hans-Peter Martin, Gay Mitchell, Sirpa Pietikäinen, John Purvis, Bernhard Rapkay, Dariusz Rosati, Eoin Ryan, Antolín Sánchez Presedo, Olle Schmidt, Peter Skinner, Margarita Starkevičiūtė, Ivo Strejček, Cornelis Visser

Substitute(s) present for the final vote

Harald Ettl, Margaritis Schinas, Eva-Riitta Siitonen

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