REPORT on the proposal for a regulation of the European Parliament and of the Council on Community macro prudential oversight of the financial system and establishing a European Systemic Risk Board

25.5.2010 - (COM(2009)0499 – C7‑0166/2009 – 2009/0140(COD)) - ***I

Committee on Economic and Monetary Affairs
Rapporteur: Sylvie Goulard

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council on Community macro prudential oversight of the financial system and establishing a European Systemic Risk Board

(COM(2009)0499 – C7‑0166/2009 – 2009/0140(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2009)0499),

–   having regard to Article 251(2) and Article 95 of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C7‑0166/2009),

–   having regard to the Commission Communication to Parliament and the Council entitled 'Consequences of the entry into force of the Treaty of Lisbon for ongoing interinstitutional decision-making procedures' (COM(2009)0665),

–   having regard to Article 294(3) and Article 114 of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the European Central Bank of 26 October 2009[1],

–   having regard to the opinion of the European Economic and Social Committee of 22 January 2010,

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs and the opinions of the Committee on Budgets, the Committee on Legal Affairs and the Committee on Constitutional Affairs (A7‑0168/2010),

1.  Adopts its position at first reading hereinafter set out;

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

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

Amendment  1 Proposal for a regulation Recital 1
Text proposed by the Commission	Amendment
(1) The financial crisis has revealed important shortcomings in the financial supervision, which has failed to prevent the accumulation of excessive risks in the financial sector and has in particular highlighted the weaknesses of the existing macro-prudential oversight.	(1) Financial stability is a precondition for the real economy to provide jobs, credit and growth. The financial crisis has revealed important shortcomings in financial supervision, which has failed to prevent the accumulation of excessive risks within the financial system. The crisis has huge consequences for the tax payers, for many Union citizens who are now unemployed and for many small and medium size enterprises (SMEs). The Members States cannot afford to bail out financial institutions, in the event of a new crisis on the same scale, without breaching the rules of the Stability and Growth Pact.
Amendment  2 Proposal for a regulation Recital 1 a (new)
Text proposed by the Commission	Amendment
	(1a) Long before the financial crisis, the European Parliament was already calling regularly for the reinforcement of a true level playing field for all actors at the Union level while pointing out significant failures in the Union's supervision of ever more integrated financial markets (in its resolutions of 13 April 2000 on the Commission communication on implementing the framework for financial markets: Action Plan1, of 25 November 2002 on prudential supervision rules in the European Union2, of 11 July 2007 on financial services policy (2005-2010) – White Paper3, of 23 September 2008 with recommendations to the Commission on hedge funds and private equity4, of 9 October 2008 with recommendations to the Commission on Lamfalussy follow-up: future structure of supervision5, of 22 April 2009 on the amended proposal for a directive of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)6 and of 23 April 2009 on the proposal for a regulation of the European parliament and of the Council on Credit Rating Agencies7).
	________ 1 OJ C 40, 7.2.2001, p. 453. 2 OJ C 25 E, 29.1.2004, p. 394. 3 OJ C 175 E, 10.7.2008, p. xx. 4 OJ C 8 E, 14.1.2010, p. 26. 5 OJ C 9 E, 15.1.2010, p. 48. 6 Texts adopted, P6_TA(2009)0251. 7 Texts adopted, P6_TA(2009)0279.
Amendment  3 Proposal for a regulation Recital 3
Text proposed by the Commission	Amendment
(3) In its final report presented on 25 February 2009, the de Larosière Group recommended, among other things, the establishment of a Community level body charged with overseeing risk in the financial system as a whole.	(3) In its final report presented on 25 February 2009 (the de Larosière Report), the de Larosière Group recommended, among other things, the establishment of a Union level body charged with overseeing risk in the financial system as a whole
	(The change should apply throughout the text).
Amendment  4 Proposal for a regulation Recital 5
Text proposed by the Commission	Amendment
(5) In its Communication entitled “European Financial Supervision” of 27 May 2009 , the Commission set out a series of reforms to the current arrangements for safeguarding financial stability at the EU level, notably including the creation of a European Systemic Risk Board (ESRB) responsible for macro-prudential oversight. The Council on 9 June 2009 and the European Council at its meeting of 18 and 19 June supported the view of the Commission and welcomed the Commission’s intention to bring forward legislative proposals so that the new framework is in place in the course of 2010. In line with the views of the Commission, it concluded inter alia that the ECB “should provide analytical, statistical, administrative and logistical support to the ESRB, also drawing on technical advice from national Central Banks and supervisors”.	(5) In its Communication entitled “European Financial Supervision” of 27 May 2009, the Commission set out a series of reforms to the current arrangements for safeguarding financial stability at Union level, notably including the creation of a European Systemic Risk Board (ESRB) responsible for macro-prudential oversight. The Council on 9 June 2009 and the European Council at its meeting of 18 and 19 June supported the view of the Commission and welcomed the Commission’s intention to bring forward legislative proposals so that the new framework is in place in the course of 2010. In line with the views of the Commission, it concluded inter alia that the ECB “should provide analytical, statistical, administrative and logistical support to the ESRB, also drawing on technical advice from national central banks and supervisors”. The support provided by the ECB to the ESRB as well as the tasks conferred upon and assigned to the ESRB should be without prejudice to the principle of the independence of the ECB in the performance of its tasks pursuant to the Treaty on the Functioning of the European Union.
Amendment  5 Proposal for a regulation Recital 5 a (new)
Text proposed by the Commission	Amendment
	(5a) Given the integration of international financial markets, there is a need for a strong commitment on the part of the Union at the global level. The ESRB should draw expertise from a high-level scientific committee and take on all the global responsibilities required in order to ensure that the voice of the Union is heard on financial stability matters, in particular in cooperating closely with the International Monetary Fund (IMF), the Financial Services Board (FSB) and all the partners of the Group of Twenty (G-20).
Amendment  6 Proposal for a regulation Recital 5 b (new)
Text proposed by the Commission	Amendment
	(5b) The ESRB should contribute, inter alia, towards implementing the recommendations of the IMF, the FSB and the Bank for International Settlements (BIS) to the G-20, in the initial consideration of their report on Guidance to Assess the Systemic Importance of Financial Institutions, Markets and Instruments published in October 2009 which states that systemic risk must be dynamic to take into account the evolution of the financial sector and of the global economy. Systemic risk may be seen as a risk of disruption to financial services that is caused by an impairment of all or parts of the financial system and has the potential to have serious negative consequences for the real economy.
Amendment  7 Proposal for a regulation Recital 5 c (new)
Text proposed by the Commission	Amendment
	(5c) The report on Guidance to Assess the Systemic Importance of Financial Institutions also states that the assessment of systemic risk is likely to vary depending on the economic environment. It will also be conditioned by the financial infrastructure and crisis management arrangements, and the capacity to deal with failures when they occur. Institutions may be systemically important for local, national or international financial systems and economies. The key criteria helping to identify the systemic importance of markets and institutions are size (the volume of financial services provided by the individual component of the financial system), substitutability (the extent to which other components of the system can provide the same services in the event of a failure) and interconnectedness (linkages with other components of the system). An assessment based on those three criteria should be complemented with reference to financial vulnerabilities and the capacity of the institutional framework to deal with financial failures.
Amendment  8 Proposal for a regulation Recital 5 d (new)
Text proposed by the Commission	Amendment
	(5d) The ESRB's task should be to monitor and assess systemic risk in normal times for the purpose of mitigating the exposure of the system to the risk of failure of systemic components and enhancing the financial system’s resilience to shocks. In this respect, the ESRB should ensure financial stability and mitigate the negative impacts on the internal market and the real economy. In order to accomplish its objectives, the ESRB should analyse all the relevant information, in particular relevant legislation with a potential impact on financial stability, such as accounting, bankruptcy and bail-out rules.
Amendment  9 Proposal for a regulation Recital 6
Text proposed by the Commission	Amendment
(6) The present Community arrangements place too little emphasis on macro-prudential oversight. Responsibility for macro-prudential analysis remains fragmented, and is conducted by various authorities at different levels with no mechanism to ensure that macro-prudential risks are adequately identified and that warnings and recommendations are issued clearly, followed up and translated into action.	(6) A proper functioning of Union and global financial systems and the mitigation of threats thereto require enhanced consistency between macro and the micro supervision. As stated in the Turner review, “A regulatory response to the global banking crisis”, of March 2009, "Sounder arrangements require either increased national powers, implying a less open single market, or a greater degree of European integration". Given the role of a sound financial system in terms of its contribution to competitiveness and growth in the Union and its impact on the real economy, the Union institutions, as recommended in the de Larosière Report, have opted for a greater degree of European integration.
Amendment  10 Proposal for a regulation Recital 6 a (new)
Text proposed by the Commission	Amendment
	(6a) This newly designed system of macro supervision requires credible and high-profile leadership. Therefore, given its key role and its international and internal credibility, and in the spirit of the de Larosière Report, the President of the ECB should be the Chair of the ESRB. In addition, the accountability requirements should be increased as well as the enlargement of the composition of the ERSB bodies to encompass a wide range of experience, backgrounds and opinions.
Amendment  11 Proposal for a regulation Recital 6 b (new)
Text proposed by the Commission	Amendment
	(6b) The de Larosière Report also states that macro-prudential supervision is not meaningful unless it can somehow impact on supervision at the micro-level whilst micro-prudential supervision cannot effectively safeguard financial stability without adequately taking account of macro-level developments.
Amendment  12 Proposal for a regulation Recital 6 c (new)
Text proposed by the Commission	Amendment
	(6c) A European System of Financial Supervision (ESFS) should be established, gathering the actors of financial supervision both at a national and at the Union level, to act as a network. Pursuant to the principle of sincere cooperation in accordance with Article 4(3) of the Treaty on European Union, the parties to the ESFS should cooperate with trust and full mutual respect, in particular to ensure that appropriate and reliable information flows between them. At the Union level, the network should comprise the ESRB and three micro-supervisory authorities: the European Supervisory Authority (Banking), established by Regulation (EU) No …/2010, the European Supervisory Authority (Securities and Markets), established by Regulation (EU) No …/2010, and the European Supervisory Authority (Insurance and Occupational Pensions) established by Regulation (EU) No …/2010.
Amendment  13 Proposal for a regulation Recital 7
Text proposed by the Commission	Amendment
(7) The Community needs a specific body responsible for macro-prudential oversight across the EU financial system, which would identify risks to financial stability and, where necessary, issue risk warnings and recommendations for action to address such risks. Consequently, a European Systemic Risk Board (ESRB) should be established as a new independent body, responsible for conducting macro-prudential oversight at the European level.	deleted
Amendment  14 Proposal for a regulation Recital 8
Text proposed by the Commission	Amendment
(8) The ESRB should, where appropriate, issue warnings and recommendations of a general nature concerning the Community as a whole, individual Member States or groups of Member States, with a specified timeline for the relevant policy response.	(8) The ESRB should, where appropriate, issue and make public warnings and recommendations of a general nature concerning the Union as a whole, individual Member States or groups of Member States, with a specified timeline for the relevant policy response. Where such warnings or recommendations are addressed to individual, or a group of, Member States, it may be possible for the ESRB to propose appropriate support measures. Where appropriate, the ESRB should declare the existence of an emergency situation.
Amendment  15 Proposal for a regulation Recital 8 a (new)
Text proposed by the Commission	Amendment
	(8a) The ESRB should decide whether a recommendation should be kept confidential or made public, bearing in mind that public disclosure can help to foster compliance with the recommendations in certain circumstances.
Amendment  16 Proposal for a regulation Recital 8 b (new)
Text proposed by the Commission	Amendment
	(8b) A colour code should be elaborated by the ESRB, in order to allow interested parties better to assess the nature of the risk.
Amendment  17 Proposal for a regulation Recital 8 c (new)
Text proposed by the Commission	Amendment
	(8c) If the ESRB detects a risk which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the Union's financial system, it should issue a warning declaring the existence of an emergency situation. In such a case the ESRB should promptly inform the European Parliament, the Council, the Commission and the European Supervisory Authorities (ESAs) of its warning. In the event of an emergency, the ESRB should issue an emergency warning.
Amendment  18 Proposal for a regulation Recital 9
Text proposed by the Commission	Amendment
(9) In order to increase their weight and legitimacy, such warnings and recommendations should be transmitted through the Council and, where appropriate, the European Banking Authority established by Regulation (EC) No …/… the European Parliament and of the Council, the European Securities and Markets Authority established by Regulation (EC) No …/… of the European Parliament and of the Council, and the European Insurance or the Occupational Pension Authority established by Regulation (EC) No …/…of the European Parliament and of the Council.	(9) In order to increase their weight and legitimacy, such warnings and recommendations should be transmitted through the European Parliament, the Council, the Commission, the addressees and, where appropriate, the ESAs.
Amendment  19 Proposal for a regulation Recital 10
Text proposed by the Commission	Amendment
(10) The ESRB should also monitor compliance with its recommendations, based on reports from addressees, in order to ensure that its warnings and recommendations are effectively followed. Addressees of recommendations should act on them unless inaction can be adequately justified (“act or explain” mechanism).	(10) The ESRB should also monitor compliance with its recommendations, based on reports from addressees, in order to ensure that its warnings and recommendations are effectively followed. Addressees of recommendations should adequately justify any failure in duly complying with the ESRB recommendations (the “act-or-explain mechanism"), in particular towards the European Parliament. The ESRB should be able to have recourse to the European Parliament and to the Council in cases where it is not satisfied with the addressees' response to the recommendations.
Amendment  20 Proposal for a regulation Recital 11
Text proposed by the Commission	Amendment
(11) The ESRB should decide whether a recommendation should be kept confidential or made public, bearing in mind that public disclosure can help to foster compliance with the recommendations in certain circumstances.	deleted
Amendment  21 Proposal for a regulation Recital 13
Text proposed by the Commission	Amendment
(13) The ECB and National Central banks should have a leading role in macro-prudential oversight because of their expertise and existing responsibilities in the area of financial stability. The participation of micro-prudential supervisors in the work of the ESRB is essential to ensure that assessment of macro-prudential risk is based on complete and accurate information about developments in the financial system. Accordingly, the chairpersons of the European Supervisory Authorities should be members with voting rights, while one national supervisor per Member State should attend as Member without voting rights.	(13) The ECB and the national central banks should have a leading role in macro-prudential oversight because of their expertise and existing responsibilities in the area of financial stability. The participation of micro-prudential supervisors in the work of the ESRB is essential to ensure that assessment of macro-prudential risk is based on complete and accurate information about developments in the financial system. Accordingly, the chairpersons of the European Supervisory Authorities should be members with voting rights. In a spirit of openness, six independent persons, who should not be members of an ESA, chosen on the basis of their general competence and commitment to the Union and their diverse backgrounds in academic fields or in the private sector, in particular in SMEs, trade-unions or as providers or consumers of financial services and offering all guarantees in terms of independence and confidentiality, should be members of the General Board. One representative of the national competent authorities of every Member State should attend meetings of the General Board without voting rights.
Amendment  22 Proposal for a regulation Recital 14
Text proposed by the Commission	Amendment
(14) The participation of a Member of the Commission will help to establish a link with the macro-economic and financial surveillance of the Community, while the presence of the Chairman of the Economic and Financial Committee reflects the role of finance ministries in safeguarding financial stability.	(14) The participation of a Member of the Commission will help to establish a link with the macro-economic and financial surveillance of the Community, while the presence of one representative of the Economic and Financial Committee at the Advisory Scientific Committee reflects the role of finance ministries in safeguarding financial stability.
Amendment  23 Proposal for a regulation Recital 14 a (new)
Text proposed by the Commission	Amendment
	(14a) Because banks and financial institutions from third countries that are members of the European Economic Area or the European Free Trade Association may operate within the Union, it should be possible to invite one high-level representative from each of those countries to participate in meetings of the General Board subject to authorisation from their home country.
Amendment  24 Proposal for a regulation Recital 15
Text proposed by the Commission	Amendment
(15) It is essential that the members of the ESRB perform their duties impartially and only consider the financial stability of the European Union as a whole. Voting on warnings and recommendations within the ESRB should not be weighted and decisions should as a rule be taken by a simple majority.	(15) It is essential that the members of the ESRB perform their duties impartially and only consider the financial stability of the European Union as a whole. Where a consensus cannot be reached, voting on warnings and recommendations within the ESRB should not be weighted and decisions should as a rule be taken by a simple majority.
Amendment  25 Proposal for a regulation Recital 16
Text proposed by the Commission	Amendment
(16) The interconnectedness of financial institutions and markets implies that the monitoring and assessment of potential systemic risks should be based on a broad set of relevant macro-economic and micro-financial data and indicators. The ESRB should therefore have access to all the information necessary to perform its duties while preserving the confidentiality of these data as required.	(16) The interconnectedness of financial institutions and markets implies that the monitoring and assessment of potential systemic risks should be based on a broad set of relevant macro-economic and micro-financial data and indicators. Those systemic risks include risks of disruption to financial services caused by a significant impairment of all or parts of the Union's financial system that have the potential to have serious negative consequences for the internal market and the real economy. Any type of financial institution and intermediary, market, infrastructure and instrument has the potential to be systemically significant. The ESRB should therefore have access to all the information necessary to perform its duties while preserving the confidentiality of these data as required.
Amendment  26 Proposal for a regulation Recital 17
Text proposed by the Commission	Amendment
(17) Market participants can provide valuable input to the understanding of the evolutions affecting the financial system. Where appropriate, the ESRB should therefore consult private sector stakeholders (financial sector representatives, consumer associations, user groups in the financial services area established by the Commission or Community legislation…) and give them a fair opportunity to provide their comments.	(17) Market participants can provide valuable input to the understanding of the evolutions affecting the financial system. Where appropriate, the ESRB should therefore consult private sector stakeholders (financial sector representatives, consumer associations, user groups in the financial services area established by the Commission or Community legislation…) and give them a fair opportunity to provide their comments. Furthermore, given that there is no rigid definition of systemic risk and that the assessment of systemic risk may vary depending on the economic environment, the ESRB should ensure a wide range of experiences and skills among its staff and advisors.
Amendment  27 Proposal for a regulation Recital 18
Text proposed by the Commission	Amendment
(18) Given the integration of international financial markets at international level and the contagion risk of financial crises, the ESRB should coordinate with the International Monetary Fund and the newly established Financial Stability Board, which are expected to provide early warnings of macro-prudential risks at the global level.	deleted
Amendment  28 Proposal for a regulation Recital 20 a (new)
Text proposed by the Commission	Amendment
	(20a) As suggested in the de Larosière Report, a step-by-step approach is necessary and the European Parliament and the Council should conduct a full review of the ESFS, the ESRB and the ESAs by ...*.
	______ * OJ please insert date: three years after the entry into force of this Regulation.
Amendment  29 Proposal for a regulation Article 1 – title
Text proposed by the Commission	Amendment
Establishment	deleted
Amendment  30 Proposal for a regulation Article 1 – paragraph 1
Text proposed by the Commission	Amendment
A European Systemic Risk Board, hereinafter referred to as 'ESRB', is established.	1. A European Systemic Risk Board (hereinafter 'ESRB'), is established. It shall have its seat in Frankfurt.
	The ESRB shall be part of the European System of Financial Supervision (ESFS), the purpose of which is to ensure the supervision of the Union's financial system.
Amendment  31 Proposal for a regulation Article 1 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. The ESFS shall comprise:
	(a) the ESRB;
	(b) the European Supervisory Authority (Securities and Markets) established by Regulation (EU) No .../2010 [ESMA];
	(c) the European Supervisory Authority (Insurance and Occupational Pensions) established by Regulation (EU) No …/2010 [EIOPA];
	(d) the European Supervisory Authority (Banking) established by Regulation (EU) No …/2010 [EBA];
	(e) the European Supervisory Authority (Joint Committee ) provided for by Article 40 of Regulation (EU) No …/2010 [EBA], of Regulation No .../2010 [ESMA], and of Regulation No …/2010 [EIOPA] (Joint Committee);
	(f) the authorities in the Member States as specified in Article 1(2) of Regulation (EU) No .../2010 [ESMA], of Regulation (EU) No …/2010 [EIOPA], and of Regulation (EU) No …/2010 [EBA];
	(g) the Commission, for the purposes of carrying out the tasks referred to in Articles 7 and 9 of Regulation (EU) No.../2010 [EBA], of Regulation (EU) No .../2010 [ESMA] and of Regulation (EU) No …/2010 [EIOPA].
	The ESAs referred to in points (b), (c) and (d) shall have their seat in Frankfurt.
Amendment  32 Proposal for a regulation Article 1 – paragraph 1 b (new)
Text proposed by the Commission	Amendment
	1b. Pursuant to the principle of sincere cooperation in accordance with Article 4(3) of the Treaty on European Union, the parties to the ESFS shall cooperate with trust and full mutual respect, in particular to ensure that appropriate and reliable information flows between them.
Amendment  33 Proposal for a regulation Article 2 – point a
Text proposed by the Commission	Amendment
(a) 'financial institution' means any undertaking whose main business is to take deposits, grant credits, provide insurance services or other financial services to its clients or members or engage in financial investment or trading activities on its own account.	(a) 'financial institution' means any undertaking whose main business is to take deposits, grant credits, provide insurance services or other financial services to its clients or members or engage in financial investment or trading activities on its own account, and any other undertaking or entity operating in the Union, whose financial activities may pose a systemic risk even if they have no direct links with the public at large;
Amendment  34 Proposal for a regulation Article 2 – point b
Text proposed by the Commission	Amendment
(b) ‘financial system’ means all financial institutions, markets and market infrastructures.	(b) ‘financial system’ means all financial institutions, markets, products and market infrastructures;
Amendment  35 Proposal for a regulation Article 2 – point b a (new)
Text proposed by the Commission	Amendment
	(ba) 'systemic risk' means a risk of disruption in financial services, including bubbles related to the financial markets, which:
	(i) is caused by an impairment of all or parts of the Union's financial system; and
	(ii) has the potential to have serious negative consequences for the internal market and the real economy.
	All types of financial intermediaries, markets and infrastructure are potentially systemically important to some degree.
Amendment  36 Proposal for a regulation Article 3 – paragraph 1
Text proposed by the Commission	Amendment
1. The ESRB shall be responsible for the macro-prudential oversight of the financial system within the Community in order to prevent or mitigate systemic risks within the financial system, so as to avoid episodes of widespread financial distress, contribute to a smooth functioning of the Internal Market and ensure a sustainable contribution of the financial sector to economic growth.	1. The ESRB shall be responsible for the macro-prudential oversight of the financial system within the Union in order to prevent or mitigate systemic risks within the financial system, so as to avoid periods of widespread financial distress, contribute to a smooth functioning of the internal market and ensure a sustainable contribution of the financial sector to economic growth.
Amendment  37 Proposal for a regulation Article 3 – paragraph 2 – point a
Text proposed by the Commission	Amendment
(a) Determine and/or collect, as appropriate, and analyse all the information relevant for the mission described in paragraph 1;	(a) determine and/or collect, as appropriate, and analyse all the relevant information, including legislation with a potential impact on financial stability such as accounting, reorganisation and winding-up rules, for the objectives described in paragraph 1;
Amendment  38 Proposal for a regulation Article 3 – paragraph 2 – point a a (new)
Text proposed by the Commission	Amendment
	(aa) identify and/or collect the relevant data from financial institutions and through the ESAs, in accordance with Article 15;
Amendment  39 Proposal for a regulation Article 3 – paragraph 2 – point b a (new)
Text proposed by the Commission	Amendment
	(ba) declare the existence of an emergency situation, where appropriate;
Amendment  40 Proposal for a regulation Article 3 – paragraph 2 – point c
Text proposed by the Commission	Amendment
(c) issue warnings where risks are deemed to be significant;	(c) issue warnings where risks are deemed to be significant and, where appropriate, make them public;
Amendment  41 Proposal for a regulation Article 3 – paragraph 2 – point d
Text proposed by the Commission	Amendment
(d) issue recommendations for remedial action where appropriate;	(d) issue recommendations for remedial action and, where appropriate, make them public;
Amendment  42 Proposal for a regulation Article 3 – paragraph 2 – point f
Text proposed by the Commission	Amendment
(f) cooperate closely with the European System of Financial Supervisors and, where appropriate, provide the European Supervisory Authorities with the information on systemic risks required for the achievement of their tasks;	(f) cooperate closely with all the other parties to the ESFS and, where appropriate, provide the ESAs with the information on systemic risks required for the achievement of their tasks; in particular the ESRB shall, in collaboration with the ESAs, develop a common set of quantitative and qualitative indicators (risk dashboard), which will serve as the basis to assign a supervisory rating to cross-border institutions that potentially could pose a systemic risk.
	Such rating will be reviewed on a regular basis, reflecting material changes of the risk profile of an institution. The supervisory rating will be a critical element for the decision to directly supervise or intervene in an ailing institution;
Amendment  43 Proposal for a regulation Article 3 – paragraph 2 – point f a (new)
Text proposed by the Commission	Amendment
	(fa) participate in the Joint Committee;
Amendment  44 Proposal for a regulation Article 4 – paragraph 1
Text proposed by the Commission	Amendment
1. The ESRB shall have a General Board, a Steering Committee and a Secretariat.	1. The ESRB shall have a General Board, a Steering Committee, a Secretariat and an Advisory Scientific Committee.
Amendment  45 Proposal for a regulation Article 4 – paragraph 3
Text proposed by the Commission	Amendment
3. The Steering Committee shall assist in the decision-making process of the ESRB by supporting the preparation of the meetings of the General Board, reviewing the documents to be discussed and monitoring the progress of the ESRB’s ongoing work.	3. The Steering Committee shall assist in the decision-making process of the ESRB by identifying risks and preparing the meetings of the General Board, reviewing the documents to be discussed and monitoring the progress of the ESRB's ongoing work and maintaining a strong link with all the parties to the ESFS. Where the General Board is called upon to take decisions on sector-specific matters, the Steering Committee shall prepare any meetings in this regard after consultation of the relevant European Supervisory Authority.
Amendment  46 Proposal for a regulation Article 4 – paragraph 4
Text proposed by the Commission	Amendment
4. The Secretariat shall provide analytical, statistical, administrative and logistical support to the ESRB under the direction of the Chair of the General Board in accordance with Council Decision XXXX/EC/2009.	4. The Secretariat shall be responsible for the day-to-day business of the ESRB and all staff matters. It shall provide high-quality analytical, statistical, administrative and logistical support to the ESRB under the direction of the Chair of the General Board in accordance with Council Regulation (EU) No .../2010 [ESRB]. It shall also draw on technical advice from ESAs, national central banks and national supervisors.
Amendment  47 Proposal for a regulation Article 4 – paragraph 5
Text proposed by the Commission	Amendment
5. The ESRB shall be supported by the Advisory Technical Committee referred to in Article 12, which shall provide advice and assistance on issues relevant to the work of the ESRB, when requested.	5. The Advisory Scientific Committee referred to in Article 12 shall provide advice and assistance on issues relevant to the work of the ESRB.
Amendment  48 Proposal for a regulation Article 5 – paragraph 1
Text proposed by the Commission	Amendment
1. The Chair and Vice-Chair of the ESRB shall be elected for a term of 5 years by and from the Members of the General Board who are also members of the General Council of the ECB. They may be re-elected.	1. The Chair of the ESRB shall be the President of the ECB. His or her term of office shall be the same as his or her term of office as President of the ECB.
Amendment  49 Proposal for a regulation Article 5 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	(a) The first Vice-Chair shall be elected by the Members of the General Council of the ECB for the same term as that of his or her membership of the General Council, with regard to the need for a balanced representation of Member States, and those within and outside the euro area. He or she may be re-elected.
Amendment  50 Proposal for a regulation Article 5 – paragraph 1 b (new)
Text proposed by the Commission	Amendment
	(b) The second Vice-Chair shall be the Chair of the Joint Committee.
Amendment  51 Proposal for a regulation Article 5 – paragraph 1 c (new)
Text proposed by the Commission	Amendment
	(c) Before taking office, the Chair and first Vice-Chair shall present to the European Parliament, during a public hearing, how they intend to discharge their duties under this Regulation. The second Vice-Chair shall be heard by the European Parliament in his or her role as Chair of the Joint Committee.
Amendment  52 Proposal for a regulation Article 5 – paragraph 3
Text proposed by the Commission	Amendment
3. The Vice-Chair shall preside at the General Board and/or the Steering Committee when the Chair cannot participate in a meeting.	3. The Vice-Chairs, in order of precedence, shall preside at the General Board and/or the Steering Committee when the Chair cannot participate in a meeting.
Amendment  53 Proposal for a regulation Article 5 – paragraph 4
Text proposed by the Commission	Amendment
4. If the term of office of the Members of the General Council of the ECB elected as Chair or Vice-Chair ends before the completion of the 5 year term or if for any reason the Chair or Vice Chair are unable to discharge their duties, a new Chair or Vice Chair shall be elected in accordance with paragraph 1.	4. If for any reason the Vice-Chairs are unable to discharge their duties, new Vice-Chairs shall be elected in accordance with paragraphs 1a, 1b and 1c.
Amendment  54 Proposal for a regulation Article 6 – paragraph 1 – point f a (new)
Text proposed by the Commission	Amendment
	(fa) six independent persons appointed by the Members of the General Board with voting rights on the proposal of the Joint Committee; the nominees must not be Members of the ESAs and shall be chosen on the basis of their general competence as well as for their diverse backgrounds in academic fields or other sectors, in particular in small and medium size enterprises, trade-unions or as providers or consumers of financial services; at the time of their nomination, the Joint Committee shall indicate which persons are designated also to serve on the Steering Committee; in carrying out their responsibilities, the persons nominated shall neither seek nor take instructions from any Government, institution, body, office, entity or private person; they shall refrain from any action incompatible with their duties or the performance of their tasks.
Amendment  55 Proposal for a regulation Article 6 – paragraph 2
Text proposed by the Commission	Amendment
2. The following persons shall be Members of the General Board without voting rights:	2. One high level representative per Member State of the competent national supervisory authority, in accordance with paragraph 3, shall be Member of the General Board without voting rights.
(a) one high level representative per Member State of the competent national supervisory authorities;
(b) the President of the Economic and Financial Committee.
Amendment  56 Proposal for a regulation Article 6 – paragraph 3
Text proposed by the Commission	Amendment
3. When the agenda of a meeting contains points pertaining to the competence of several national supervisory authorities in the same Member State, the respective high level representative shall only participate in the discussion on items falling under his or her competence.	3. With regard to the representation of national supervisory authorities, the respective high level representatives shall rotate depending on the item discussed, unless the national supervisory authorities have agreed on a common representative.
Amendment  57 Proposal for a regulation Article 7 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. Members of the General Board who are also members of the General Council of the ECB shall act independently when performing their duties.
Amendment  58 Proposal for a regulation Article 8 – paragraph 1
Text proposed by the Commission	Amendment
1. Members of the General Board of the ESRB and any other persons who work or who have worked for or in connection with the ESRB (including the relevant staff of central banks, Advisory Technical Committee, ESAs and competent national supervisory authorities of the Member States), shall be required not to disclose information covered by professional secrecy, even after their duties have ceased.	1. Members of the General Board of the ESRB and any other persons who work or who have worked for or in connection with the ESRB (including the relevant staff of central banks, Advisory Scientific Committee, ESAs and competent national supervisory authorities of the Member States), shall be required not to disclose information covered by professional secrecy, even after their duties have ceased.
Amendment  59 Proposal for a regulation Article 9 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. Where appropriate, high-level representatives from international institutions carrying out other related activities may be invited to attend the meetings of the General Board.
Amendment  60 Proposal for a regulation Article 9 – paragraph 3 b (new)
Text proposed by the Commission	Amendment
	3b. Where appropriate, and on an ad hoc basis, one high-level representative of a third country, in particular a member country of the European Economic Area or the European Free Trade Association, may be invited to attend meetings of the General Board, depending on the item discussed.
Amendment  61 Proposal for a regulation Article 10 – paragraph 1
Text proposed by the Commission	Amendment
1. Each Member of the General Board with a voting right shall have one vote.	1. The General Board shall strive for consensus. Where consensus cannot be achieved each Member of the General Board with a voting right shall have one vote. After a period of time, to be defined in the ESRB's rules of procedure, members of the Board may request a vote on a draft warning or a draft recommendation.
Amendment  62 Proposal for a regulation Article 10 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. By derogation from paragraph 2, a majority of two-thirds of the votes shall be required to make a warning or recommendation public.
Amendment  63 Proposal for a regulation Article 11 – paragraph 1 – point b
Text proposed by the Commission	Amendment
(b) the Vice-Chair of the ESRB;	(b) the first Vice-Chair of the ESRB;
Amendment  64 Proposal for a regulation Article 11 – paragraph 1 – point b a (new)
Text proposed by the Commission	Amendment
	(ba) the Vice-President of the ECB;
Amendment  65 Proposal for a regulation Article 11 – paragraph 1 – point c
Text proposed by the Commission	Amendment
(c) five other members of the General Board who are also members of the General Council of the ECB. They shall be elected by and from the Members of the General Board who are also members of the General Council of the ECB for a period of two years.	(c) four other members of the General Board who are also members of the General Council of the ECB, with regard to the need for a balanced representation of Member States and those within and outside the euro area. They shall be elected by and from among the Members of the General Board who are also members of the General Council of the ECB for a period of four years;
Amendment  66 Proposal for a regulation Article 11 – paragraph 1 – point e
Text proposed by the Commission	Amendment
(e) the Chairperson of the European Banking Authority;	(e) the Chairperson of the European Supervisory Authority (Banking);
Amendment  67 Proposal for a regulation Article 11 – paragraph 1 – point f
Text proposed by the Commission	Amendment
(f) the Chairperson of the European Insurance and Occupational Pensions Authority;	(f) the Chairperson of the European Supervisory Authority (Insurance and Occupational Pensions);
Amendment  68 Proposal for a regulation Article 11 – paragraph 1 – point g
Text proposed by the Commission	Amendment
(g) the Chairperson of the European Securities and Markets Authority;	(g) the Chairperson of the European Supervisory Authority (Securities and Markets);
Amendment  69 Proposal for a regulation Article 11 – paragraph 1 – point h
Text proposed by the Commission	Amendment
(h) the President of the Economic and Financial Committee.	(h) three of the six independent persons referred to in Article 6(1)(fa).
Amendment  70 Proposal for a regulation Article 12 – title
Text proposed by the Commission	Amendment
Advisory Technical Committee	Advisory Scientific Committee
Amendment  71 Proposal for a regulation Article 12 – paragraph 1
Text proposed by the Commission	Amendment
1. The Advisory Technical Committee shall be composed of the following:	1. The Advisory Scientific Committee shall be composed of the following:
(a) a representative of each national central bank and a representative of the ECB;	(a) nine experts with acknowledged competence and guaranteed independence proposed by the Steering Committee, who shall represent a wide range of experiences and skills and who shall be approved by the General Board for a four-year, renewable mandate;
(b) one representative per Member State of the competent national supervisory authority;
(c) one representative of the European Banking Authority;	(b) one representative of the European Supervisory Authority (Banking);
(d) one representative of the European Insurance and Occupational Pensions Authority;	(c) one representative of the European Supervisory Authority (Insurance and Occupational Pensions);
(e) one representative of the European Securities and Markets Authority;	(d) one representative of the European Supervisory Authority (Securities and Markets);
(f) two representatives of the Commission;	(e) two representatives of the Commission;
(g) one representative of the Economic and Financial Committee.	(f) one representative of the Economic and Financial Committee.
The supervisory authorities of each Member State shall choose one representative in the Committee. When the agenda of a meeting contains points pertaining to the competence of several national supervisory authorities in the same Member State, the respective representative shall participate only for the agenda items falling under his competence.
Amendment  72 Proposal for a regulation Article 12 – paragraph 2
Text proposed by the Commission	Amendment
2. The Chair of the Advisory Technical Committee shall be appointed by the General Board following a proposal from the Chair of the General Board.	2. The Chair of the Advisory Scientific Committee shall be appointed by the General Board following a proposal from the Chair of the General Board.
Amendment  73 Proposal for a regulation Article 12 – paragraph 4
Text proposed by the Commission	Amendment
4. The ESRB Secretariat shall support the work of the Advisory Technical Committee and the Head of the Secretariat shall participate in the meetings.	4. The ESRB Secretariat shall support the work of the Advisory Scientific Committee and the Head of the Secretariat shall participate in the meetings.
Amendment  74 Proposal for a regulation Article 12 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. In order to provide advice and assistance on issues relevant to the work of the ESRB, the Advisory Scientific Committee shall work closely with the experts' working groups of the ESCB and shall seek advice from the ESAs regarding the macro-economic risk profiles of the various sectors involved in financial services.
Amendment  75 Proposal for a regulation Article 12 – paragraph 4 b (new)
Text proposed by the Commission	Amendment
	4b. Where appropriate, the Advisory Scientific Committee shall organise consultations at an early stage with stakeholders such as market participants, consumer bodies, academic experts, in an open and transparent manner, while keeping in mind the confidentiality requirement.
Amendment  76 Proposal for a regulation Article 12 – paragraph 4 c (new)
Text proposed by the Commission	Amendment
	4c. The Advisory Scientific Committee shall be provided with all necessary means in order to successfully complete its tasks, in particular analytical and ICT tools.
Amendment  77 Proposal for a regulation Article 13
Text proposed by the Commission	Amendment
In performing its tasks, the ESRB shall seek, where appropriate, the advice of relevant private sector stakeholders.	In performing its tasks, the ESRB shall seek, where appropriate, the views of relevant private or public sector stakeholders, particularly, but not exclusively, the members of the ESAs.
Amendment  78 Proposal for a regulation Article 15 – paragraph 1
Text proposed by the Commission	Amendment
1. The ESRB shall provide the European Supervisory Authorities with the information on systemic risks necessary for the achievement of their tasks.	1. The ESRB shall provide each European Supervisory Authority with the information on systemic risks necessary for the achievement of its tasks.
Amendment  79 Proposal for a regulation Article 15 – paragraph 2
Text proposed by the Commission	Amendment
2. The European Supervisory Authorities, the national central banks and Member States shall cooperate closely with the ESRB and provide all the information necessary for the fulfilment of its tasks in accordance with Community legislation.	2. In accordance with Article 1(1b), the European Supervisory Authorities, the national central banks and all relevant authorities in the Member States shall cooperate closely with the ESRB and provide the collated information necessary for the fulfilment of its tasks in accordance with Union legislation, without prejudice to the prerogatives respectively conferred on the Council, the Commission (Eurostat), the ECB, the Eurosystem and the ESCB in the field of statistics and data collection.
Amendment  80 Proposal for a regulation Article 15 – paragraph 3
Text proposed by the Commission	Amendment
3. The ESRB may request information from the European Supervisory Authorities in summary or collective form, such that individual financial institutions cannot be identified. If the requested data are not available to those Authorities or are not made available in a timely manner, the ESRB may request the data from national supervisory authorities, national central banks or other authorities of Member States.	3. On the request of the ESRB, the ESAs shall provide information in summary or collective form, such that individual financial institutions cannot be identified. If the requested data are not available to the ESAs or are not made available in a timely manner, national supervisory authorities, national central banks or other authorities of Member States shall provide those data.
Amendment  81 Proposal for a regulation Article 15 – paragraph 4
Text proposed by the Commission	Amendment
4. The ESRB may address a reasoned request to the European Supervisory Authorities to provide data that are not in summary or collective form.	4. Where there is a sustained and severe risk which is likely to concern a specific financial institution and the information in paragraph 3 is not sufficient for the ESRB to achieve its tasks, the ESRB may address a reasoned request to the ESAs to provide data that are not in summary or collective form.
Amendment  82 Proposal for a regulation Article 15 – paragraph 4 a (new)
Text proposed by the Commission	Amendment
	4a. If information referred to in this Article is not made available or in the event of an emergency, the General Board may call on the European Parliament and the Council to act in an appropriate way.
Amendment  83 Proposal for a regulation Article 15 – paragraph 5
Text proposed by the Commission	Amendment
5. Before requesting information in accordance with paragraphs 3 and 4, the ESRB shall duly consult the relevant European Supervisory Authority in order to ensure that the request is proportionate.	5. The ESRB may request information from an undertaking which engages in financial investment or trading activities on its own account but is not covered by Regulation (EU) No .../2010 [EBA], Regulation (EU) No .../2009 [ESMA] or Regulation (EU) No .../2009 [EIOPA]. The ESRB shall inform the Commission and consult the department of the central government administration responsible for legislation on supervision of financial institutions of the relevant Member State in order to ensure that the request is proportionate. The additional obligation of data provision incurred by financial institutions at the request of the ESRB shall not lead to any disproportionate increase in administrative burdens.
Amendment  84 Proposal for a regulation Article 15 – paragraph 5 a (new)
Text proposed by the Commission	Amendment
	5a. The staff of the ESRB may attend the meetings of the Board of Supervisors of the ESAs and may ask questions of, and receive relevant information from, the ESAs.
Amendment  85 Proposal for a regulation Article 15 – paragraph 5 b (new)
Text proposed by the Commission	Amendment
	5b. The ESRB shall cooperate with third-country national central banks, supervisory authorities and international forums in order to facilitate the information exchange and establish a mechanism for collecting and exchanging information on systemic risk necessary for the achievement of its tasks.
Amendment  86 Proposal for a regulation Article 16 – paragraph 1
Text proposed by the Commission	Amendment
1. When significant risks to the achievement of the objective in article 3(1) are identified, the ESRB shall provide warnings and, where appropriate, issue recommendations for remedial action.	1. When significant risks to the achievement of the objective in Article 3(1) are identified, the ESRB shall provide warnings and, where appropriate, issue recommendations for remedial action, including for legislative initiatives.
Amendment  87 Proposal for a regulation Article 16 – paragraph 2
Text proposed by the Commission	Amendment
2. Warnings or recommendations issued by the ESRB in accordance with points (c) and (d) of Article 3(2) may be either of a general or specific nature and shall be addressed to the Community as a whole or to one or more Member States, or to one or more of the European Supervisory Authorities, or to one or more national supervisory authorities. Recommendations shall include a specified timeline for the policy response. Recommendations may also be addressed to the Commission in respect of the relevant Community legislation.	2. Warnings or recommendations issued by the ESRB in accordance with points (c) and (d) of Article 3(2) may be either of a general or specific nature and shall be addressed, in particular, to the Union as a whole or to one or more Member States, or to one or more of the ESAs, or to one or more national supervisory authorities. Recommendations shall include a specified timeline for the policy response. Recommendations may also be addressed to the Commission in respect of the relevant Union legislation.
Amendment  88 Proposal for a regulation Article 16 – paragraph 3
Text proposed by the Commission	Amendment
3. The warnings or recommendations shall also be transmitted to the Council and, where addressed to one or more national supervisory authority, to the European Supervisory Authorities.	3. The warnings or recommendations shall also be transmitted to the European Parliament, the Council, the Commission, the addressees in accordance with paragraph 2, and, where addressed to one or more national supervisory authorities, to the ESAs.
Amendment  89 Proposal for a regulation Article 16 – paragraph 4
Text proposed by the Commission	Amendment
4. Any Member of the Board may request a vote on a draft warning or a draft recommendation at any time.	4. In order to enhance the awareness of risks in the European economy and to prioritise such risks, the ERSB, in close cooperation with the ESFS, shall elaborate a colour-coded system corresponding to situations of different risk levels.
	Once the criteria of such classification have been elaborated, its warnings and recommendations will indicate, on a case-by-case basis, and where appropriate, to which category the risk belongs.
Amendment  90 Proposal for a regulation Article 16 a (new)
Text proposed by the Commission	Amendment
	Article 16a
	Action in emergency situations
	1. In the event of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the European Union, the ESRB in accordance with point (b) of Article 3(2) and Article 10 of each of Regulation (EU) No …/2010 [EBA], No .../2010 [ESMA], No …/2010 [EIOPA], may issue warnings, on its own initiative or following a request by an ESA, the European Parliament, the Council or the Commission, declaring the existence of an emergency situation.
	2. As soon as it issues a warning, the ESRB shall simultaneously notify the European Parliament, the Council, the Commission and the European Supervisory Authority, in accordance with Article 16(3) and Article 18(3).
	As soon as possible after the notification, the Chair of the ERSB and the competent Commissioner should be heard by the competent Committee of the European Parliament.
	3. The ESRB shall review the warning referred to in paragraph 1 upon its own initiative or following a request by the European Parliament, the Council, the Commission or an European Supervisory Authority.
Amendment  91 Proposal for a regulation Article 17 – paragraph 1
Text proposed by the Commission	Amendment
1. Where a recommendation referred to in letter (d) of Article 3(2) is addressed to one or more Member States, one or more European Supervisory Authorities, or one or more national supervisory authorities, the addressees shall communicate the actions undertaken in response to the recommendations to the ESRB or explain why they have not acted. The Council and, where relevant, the European Supervisory Authorities shall be informed.	1. Where a recommendation referred to in point (d) of Article 3(2) is addressed to one or more Member States, one or more European Supervisory Authorities, or one or more national supervisory authorities, the addressees shall communicate the actions undertaken in response to the recommendations to the ESRB or explain why they have not acted. The European Parliament, the Council and, where relevant, the European Supervisory Authorities shall be informed.
Amendment  92 Proposal for a regulation Article 17 – paragraph 2
Text proposed by the Commission	Amendment
2. If the ESRB decides that its recommendation has not been followed and that the addressees have failed to explain their inaction appropriately, it shall inform the Council and, where relevant, the European Supervisory Authorities concerned.	2. Where the ESRB decides that an addressee of one of its recommendations has failed to follow or has inappropriately followed that recommendation, and that the addressee has not justified such failure, it shall inform the European Parliament, the Council, the Commission and, where relevant, the European Supervisory Authorities concerned.
Amendment  93 Proposal for a regulation Article 17 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. Where the ESRB has made a decision under paragraph 2, the European Parliament may invite the addressees to be questioned by its competent Committee.
Amendment  94 Proposal for a regulation Article 18 – paragraph 1
Text proposed by the Commission	Amendment
1. The General Board of the ESRB shall decide whether a warning or a recommendation should be made public on a case-by-case basis. By derogation to Article 10(2), a qualified majority of two-thirds of the votes is needed to make a warning or recommendation public.	1. In accordance with Article 10(3a), the General Board of the ESRB shall decide, on a case-by-case basis, whether a warning or a recommendation should be made public. By derogation from Article 10(2), a majority of two-thirds of the votes is needed to make a warning or recommendation public.
Amendment  95 Proposal for a regulation Article 18 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. The addressees of warnings and recommendations released by the ESRB should be provided with the rights of making public its views and reasoning as well in response to the warning and recommendation published by the ESRB.
Amendment  96 Proposal for a regulation Article 18 – paragraph 3
Text proposed by the Commission	Amendment
3. Where the general Board of the ESRB decides not to make a warning or a recommendation public, the addressee and where appropriate, the Council and the European Supervisory Authorities, shall take all the measures necessary for the protection of their confidential nature. The President of the Council may decide not to circulate a warning or recommendation to the other Members of the Council.	3. Where the General Board of the ESRB decides not to make a warning or a recommendation public, the addressee and, where appropriate, the European Parliament, the Council, the European Supervisory Authorities and the national supervisory authorities shall take all the measures necessary for the protection of their confidential nature.
Amendment  97 Proposal for a regulation Article 18 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. Any data on which the General Board of the ESRB bases its analysis before issuing a warning or a recommendation shall be made public in an appropriately anonymous form. In the event of confidential warnings, information shall be made available within an appropriate period of time, to be defined in the ESRB's rules of procedure.
Amendment  98 Proposal for a regulation Article 19 – title
Text proposed by the Commission	Amendment
Reporting obligations	Accountability and reporting obligations
Amendment  99 Proposal for a regulation Article 19 – paragraph 1
Text proposed by the Commission	Amendment
1. The ESRB shall report at least annually to the European Parliament and to the Council.	1. At least annually, but more frequently in the event of widespread financial distress, the ESRB Chair shall be invited to an annual hearing in the European Parliament, marking the publication of the ESRB's annual report to the European Parliament and the Council. Those hearings shall be made in a different context from the monetary dialogue between the European Parliament and the President of the ECB.
Amendment  100 Proposal for a regulation Article 19 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. The reports referred to in this Article shall be made available to the public.
Amendment  101 Proposal for a regulation Article 19 – paragraph 2
Text proposed by the Commission	Amendment
2. The ESRB shall also examine specific issues at the invitation of the Council or the Commission.	2. The ESRB shall also examine specific issues at the invitation of the European Parliament, the Council or the Commission.
Amendment  102 Proposal for a regulation Article 19 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. The European Parliament may request the President of the ESRB and the other members of the Steering Committee to attend a hearing of the competent Committees of the European Parliament.
Amendment  103 Proposal for a regulation Article 20
Text proposed by the Commission	Amendment
The Council shall examine this Regulation on the basis of a report from the Commission three years after its entry into force and shall determine whether the missions and organisation of the ESRB need to be reviewed after having received an opinion from the ECB.	The European Parliament and the Council shall, by ...*, examine this Regulation on the basis of a report from the Commission and shall determine whether the objectives and organisation of the ESRB need to be reviewed after having received an opinion from the ECB.
	The report shall assess, in particular, whether:
	(a) it is appropriate to simplify and reinforce the architecture of the ESFS in order to increase the coherence between the macro and the micro levels as well as between the ESAs;
	(b) it is appropriate to increase the regulatory powers of the ESAs;
	(c) the evolution of the ESFS is consistent with that of global developments in this area;
	(d) there is sufficient diversity and excellence within the ESFS ;
	(e) accountability and transparency in relation to publication requirements are adequate.
	______ * Three years after the entry into force of this Regulation.

• [1]  OJ C 270, 11.11.2009, p. 1.

EXPLANATORY STATEMENT

Since 2000, and on several occasions, the European Parliament has called on the Commission to make ambitious proposals to guarantee the stability of the EU's financial markets and to take advantage of the launch of the Euro[1].

The severity of the financial, economic and social crisis which has swept across the EU clearly illustrates the insufficiency of current systems. Do we really need more than this crisis - the most severe the world has known since 1929 - to finally endow the EU with effective financial supervision?

The European Parliament is aware of its responsibilities. Europe's citizens are awaiting firm measures: unemployment has risen dramatically. An increasing number of companies, particularly small and medium sized ones, are failing. Public deficits and public debt have increased in a worrying fashion. Certain bank rescues will weigh heavily on taxpayers. We cannot fail because most Member States would not have the means to face a new crisis of the same magnitude. If it is impossible to completely eliminate crises, then we must still try to prevent them and limit their negative effects.

In a report published on 25 February 2009, the working group mandated by the Commission, presided by Jacques de Larosière, called for the creation of a new body responsible for macroeconomic supervision, placed under the auspices of the European Central Bank (ECB), as well as three microeconomic supervision authorities endowed with binding powers. The Commission and the European Council have endorsed the general direction of the report.

Hence the European Parliament and Council regulation proposal concerning macro prudential supervision of the financial system establishing a European Systemic Risk Board (ESRB) which is now submitted for examination by the European Parliament. Three other texts creating three authorities responsible for supervising banks, insurance and markets respectively, have also been adopted by the College. The rapporteurs of this "package" have worked together closely to preserve its coherence.

Objectives

Create an effective supervisory system without hindering the financing of the economy

The first objective of this legislation is to create the conditions to enable the stable financing of the economy, to ensure sustainable growth and jobs. In the years to come, the reconversion of our economies towards growth which is more respectful of the climate will demand increasingly innovative efforts and, to that purpose the mobilisation of an important supply of capital. In financing the real economy, the financial industry contributes to creating wealth. Its activity must be supervised, not impeded.

Safeguard the single market

The second objective is to safeguard the unity of the European single market. Either the EU is endowed with the means to ensure, at the European level, quality financial supervision from now on, or the single market will become fragmented. This would undo decades of work to abolish borders and lift barriers to exchanges, as well as the fact that European economic integration has also greatly contributed to job creation and maintaining growth.

As President Barroso, with the assignment entrusted to Mario Monti, wishes to make the re-launch of the single market a strategic objective of the new Commission, as does the Commissioner designate, Michel Barnier, the fragmentation of the financial services market would be a contradiction. Your rapporteur subscribes to this logic, which, as in the de Larosière report, resolutely privileges the long term general European interest over the lowest common denominator of Member States.

Allow the EU to maintain its status

The EU must fully assume its global responsibilities. The G20, the IMF, the Financial Stability Board have underlined the necessity to fight against systemic risks and to better supervise those entities whose cross-border activities partly elude national supervisors. If we do not want to suffer the consequences of choices made by third parties, if we want to defend the euro and other European currencies, the EU must maintain its status there where the decisions are being made by reaffirming its commitment to multilateral proceedings. Thanks to the creation of the ESRB and the three authorities endowed with binding powers the EU will be better able to assert its values and to defend its interests. It is a strategic challenge.

Ensure the coherence of decisions

The creation of the ESRB is a significant innovation; up until now, no-one has undertaken a macroeconomic analysis, at European level, whose primary goal is to evaluate systemic risks. Close cooperation between the ESRB and those who possess the relevant information (national supervisors and the European authorities responsible for each sector) is a priority in order to create coherent "macro-micro" supervision, and beyond that, sectors.

Choices made in this report

The de Larosière group's report already represents a compromise. It is imperative that it is not diluted and, under the cover of improving the situation, to forget the sense of urgency felt by its authors. However, since this report has been submitted a year has gone by. Numerous ideas have been put forward, notably by Barack Obama himself, or at the World Economic Forum in Davos.

Your rapporteur has undertaken numerous consultations. The "package" takes into account the evolution of the global debate which, notably for the banking sector, is turning towards a more demanding supervision.

A clearly identified president, bodies which are more open to society

The ESRB is placed under the auspices of the European Central Bank; the central bankers of the whole EU are called on to play an important role because they are last resort lenders. The ESRB does not have any binding power; ultimately, perhaps it needs to go further. At this stage, its president must at least be clearly identified and respected. That is why we propose to entrust the presidency of the ESRB to the president of the ECB ex officio, in accordance with the de Larosière report.

It appears difficult, as the European Commission suggests, to run the risk that the elected president at the head of the ESRB be the governor of a national central bank. The president of the ESRB must act completely independently in the general European interest.

It is necessary:

1) To increase the accountability of the ESRB in front of the Parliament (sending warnings and recommendations to the Council and to Parliament, with confidentiality guarantees; the possibility for the Parliament to hear an authority refusing to cooperate despite a request made public by the ESRB; greater frequency of hearings and rapports).

2) To open up the composition of certain bodies. An analysis based on more diverse points of view would better enable the prevention of risks. That is why your rapporteur has proposed to add among the members of the General Board and the Steering Committee of the ESRB, a certain number of people with voting rights who fulfil all the guarantees regarding independence and who possess diverse experiences, either in the private sector (notably SMEs, providers or consumers of financial services, trade unions), or from academic fields. The position of second Vice-president of the ESRB has also been created, entrusted to the President of one of the three authorities by rotation.

Discussion between central bankers and supervisors and the "real economy" will reinforce the legitimacy of the ESRB. The crisis has generated much suspicion amongst the public about supervisory bodies and central banks. One of the challenges of this exercise is to rebuild confidence. This is no small task.

A single supervisory "system" brought together in one place

The de Larosière report created a "European System of Financial Supervision" (ESFS) conceived as a decentralised network, regrouping national supervisory authorities, the three new authorities and the colleges of the supervisory authorities for the large cross-border institutions. Taking inspiration from the success of the European System of Central Banks or the European Competition Network, your rapporteur proposes including the ESRB in the ESFS. This is required to ensure both the internal unity and the external coherence of financial supervision.

An explicit loyalty obligation is to be established between the different members of the network to ensure a complete exchange of information.

With a view to creating a common supervisory culture, the rapporteur suggests regrouping all the European supervisory authorities (the ESRB and the three authorities) together in one place, in Frankfurt. This geographical proximity allows easy daily meetings which are not onerous, a single personnel recruitment system and, in the case of a crisis, faster reactions. European efficiency must take precedence over all other considerations and the future must remain open; the fact that the Lamfalussy Committees are broken up between multiple capitals must not prevent reflection about a tighter European structure which the EU needs. The de Larosière report suggests assessing in three years time if we should not be "moving towards a system which would rely on only two authorities", the first one responsible for issues of prudential supervision (banks and insurance), the second one in charge of "conduct of business and market issues". Your rapporteur would like to see the assessment going in this direction. Between now and then the ESRB will be an active participant in the Joint Committee of the three European supervisory authorities.

An expectation of global excellence

Without of course excluding close cooperation between the ESRB on the one hand and central banks and supervisors on the other, the ESRB is endowed with an Advisory Scientific Committee, made up of renowned people recruited on the basis of excellence. A large element of the effectiveness of European financial supervision shall rest on the quality of the staff appointed in the authorities and the ESRB, notably the secretariat.

Warnings, recommendations, emergencies

The Parliament receives warnings and recommendations which can go as far as the declaration of an emergency. A colour-coded system contributes to ensuring the accuracy of the information.

***

These proposals are only the first step towards integrated European supervision, which remains our goal.

• [1]  - See the Garcia-Margallo Y Marfil report on the Commission communication on implementing the framework for financial markets. And also the following reports: Van den Burg, Van den Burg & Daianu, Gauzès on credit rating agencies and Skinner (Solvency II)

OPINION of the Committee on Legal Affairs (30.4.2010)

for the Committee on Economic and Monetary Affairs

on the proposal for a regulation of the European Parliament and of the Council on Community macro prudential oversight of the financial system and establishing a European Systemic Risk Board
(COM(2009)0499 – C7‑0166/2009 – 2009/0140(COD))

Rapporteur: Evelyn Regner

SHORT JUSTIFICATION

1. The Commission proposal on the ESRB

The Commission proposal forms part of a package to improve the EU's supervisory framework based on recommendations by the Larosière group, which is intended to eliminate the weaknesses which have come to light in the existing supervisory framework as a result of the current financial crisis.

The ESRB would be the cornerstone of an integrated EU supervisory structure and would thus contribute to better functioning of the internal market. It is conceived as a completely new and - in this form - unprecedented European body, without legal personality. It is intended to develop a European macro-prudential perspective to address the problem of fragmented individual risk analysis at national level, to enhance the effectiveness of early warning mechanisms and to allow risk assessments to be translated into action by the relevant authorities.

According to the Commission proposal, the ESRB would comprise a General Board, a Steering Committee and a Secretariat, the latter being provided by the European Central Bank. The membership of its General Board – its governing body – would include the Governors of all the national central banks. The regulation establishing the ESRB is to be supplemented by a Council decision authorising the European Central Bank (ECB) to ensure the secretariat of the ESRB.

2. The rapporteur's position

The rapporteur welcomes the establishment of the ESRB. The crisis has shown micro-supervision by the national authorities to be insufficient to enable systemic risks to be identified and averted swiftly enough. It is important to establish a European system (of macro-supervision) to monitor, assess and where necessary avert potential risks to financial stability and which can issue early warnings concerning systemic risks and propose practical measures to tackle them. It should be possible to observe and assess interaction between macroeconomic trends and the financial system from a broad perspective. It is also worthwhile to step up cooperation with the IMF, the Financial Stability Board and relevant bodies in third countries. Monitoring of systemic risks will increase the stability of financial markets, reduce the likelihood of fresh financial crises and thus increase the attractiveness of the European financial market as an operational location.

The rapporteur proposes a few amendments to clarify and improve the proposed supervisory structure. As a matter of principle, the mandate of the ESRB should be clearly confined to the financial sector and must not encroach upon wage policy and fiscal policy. All the objectives of the EU as laid down in Article 3 of the Treaty on European Union must be appropriately taken into account in assessing risks.

Voting within the General Board should adhere strictly to the principle of 'one member one vote', as provided for by Article 10 of the Commission proposal: there should not be any weighting of votes.

As for the Steering Committee, she proposes that it should include five representatives of the national central banks, as balanced representation of the latter on the Steering Committee is needed for macro-prudential oversight, to avoid the committee's being dominated by people who do not represent banks of issue.

With regard to the gathering and exchange of information, the new body must be able to perform its duties independently, without relying on national authorities. Rapid and regular access to data must therefore be ensured.

Maximum transparency should be ensured. Analyses should as a standard practice be public: any need for secrecy must be substantiated in detail and secrecy permitted only on condition that a separate decision is taken concerning it. The data from the analyses should be publicly accessible, albeit in an appropriate anonymous form, which could help to improve the quality of recommendations.

The European Parliament should have the same powers as the Council and Commission: in particular, it should be able to commission examinations by the ESRB.

The ESRB's accountability must be clearly regulated. However, it should be borne in mind that the present proposal provides only for non-binding recommendations, while no executive tasks are transferred to the ESRB.

In sum, the proposed system of oversight is a first step towards the long-term objective of a harmonised European system of oversight, with a central European authority for major cross-border financial/credit institutions or groups which are large enough to have systemic implications acting as a regulatory authority. In the case of groups of credit institutions with systemic implications, the European supervisory authorities should be the relevant authorities, while, in accordance with the subsidiarity principle, purely national institutions should be supervised purely at national level.

AMENDMENTS

The Committee on Legal Affairs calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation Recital 7
Text proposed by the Commission	Amendment
(7) The Community needs a specific body responsible for macro-prudential oversight across the EU financial system, which would identify risks to financial stability and, where necessary, issue risk warnings and recommendations for action to address such risks. Consequently, a European Systemic Risk Board (ESRB) should be established as a new independent body, responsible for conducting macro-prudential oversight at the European level.	(7) The Union needs a specific body responsible for macro-prudential oversight across the EU financial system, which would identify risks to financial stability and, where necessary, issue risk warnings and recommendations for action to address such risks. Consequently, a European Systemic Risk Board (ESRB) should be established as a new independent body, responsible for conducting macro-prudential oversight at Union level. The analyses of the ESRB should be confined to the financial sector and should not concern issues of wage policy or fiscal policy.
Amendment  2 Proposal for a regulation Article 11 – paragraph 1 – point c
Text proposed by the Commission	Amendment
(c) five other members of the General Board who are also members of the General Council of the ECB. They shall be elected by and from the Members of the General Board who are also members of the General Council of the ECB for a period of two years.	(c) five national central bank chairpersons, who shall be elected by and from the Members of the General Board who are also members of the General Council of the ECB for a period of two years;
Amendment  3 Proposal for a regulation Article 17 – paragraph 2
Text proposed by the Commission	Amendment
2. If the ESRB decides that its recommendation has not been followed and that the addressees have failed to explain their inaction appropriately, it shall inform the Council and, where relevant, the European Supervisory Authorities concerned.	2. If the ESRB decides that its recommendation has not been followed and that the addressees have failed to explain their inaction appropriately, it shall inform the Council, the Commission and, where relevant, the European Supervisory Authorities concerned.
Amendment  4 Proposal for a regulation Article 19 – paragraph 2
Text proposed by the Commission	Amendment
2. The ESRB shall also examine specific issues at the invitation of the Council or the Commission.	2. The ESRB shall also examine specific issues at the invitation of the Council, the European Parliament or the Commission.

PROCEDURE

Title	Macro-prudential oversight of the financial system and establishment of a European Systemic Risk Board
References	COM(2009)0499 – C7-0166/2009 – 2009/0140(COD)
Committee responsible	ECON
Opinion by        Date announced in plenary	JURI 7.10.2009
Rapporteur        Date appointed	Evelyn Regner 5.10.2009
Discussed in committee	3.12.2009		28.1.2010
Date adopted	28.4.2010
Result of final vote	+: –: 0:	22 0 1
Members present for the final vote	Raffaele Baldassarre, Luigi Berlinguer, Sebastian Valentin Bodu, Françoise Castex, Christian Engström, Lidia Joanna Geringer de Oedenberg, Daniel Hannan, Klaus-Heiner Lehne, Antonio López-Istúriz White, Antonio Masip Hidalgo, Alajos Mészáros, Bernhard Rapkay, Evelyn Regner, Francesco Enrico Speroni, Alexandra Thein, Diana Wallis, Rainer Wieland, Cecilia Wikström, Tadeusz Zwiefka
Substitute(s) present for the final vote	Piotr Borys, Sergio Gaetano Cofferati, Kurt Lechner, Eva Lichtenberger, József Szájer
Substitute(s) under Rule 187(2) present for the final vote	Kay Swinburne

OPINION of the Committee on Constitutional Affairs (9.4.2010)

for the Committee on Economic and Monetary Affairs

on the proposal for a regulation of the European Parliament and of the Council on Community macro prudential oversight of the financial system and establishing a European Systemic Risk Board
(COM(2009)0499 – C7‑0166/2009 – 2009/0140(COD))

Rapporteur: Íñigo Méndez de Vigo

SHORT JUSTIFICATION

The lack of adequate financial regulation at a European level and the weakness of the market supervisory mechanisms were clearly evident during the economic and financial crisis that hit Europe in 2008, the repercussions of which we are still suffering. The Commission has drawn up four proposals – for whose passage through Parliament the Committee on Economic and Monetary Affairs is responsible – based upon the report by the group of experts presided over by Jacques de Larosiere.

In giving its opinion, the Committee on Constitutional Affairs has sought to examine carefully how the new European Supervisory Authority and the European Systemic Risk Board created in these proposals can best fit into the institutional system. It has also focused on the establishment of harmonised technical standards for financial services, in order to ensure that their actions are consistent on the one hand and to guarantee adequate protection for depositors, investors and consumers in the European Union on the other. The relationship with private-sector institutions has been studied with special care in this opinion, as has the relationship between the European Supervisory Authority and national supervisory authorities. Finally, we have stressed the problems connected with supervision of cross-border institutions.

The 2008 financial crisis demands a European response to European problems: thanks to the new powers granted to it under the Lisbon Treaty, Parliament must play a decisive role in all these matters.

AMENDMENTS

The Committee on Constitutional Affairs calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1 Proposal for a regulation Recital 1 a (new)
Text proposed by the Commission	Amendment
	(1a) Long before the financial crisis, the European Parliament called regularly for the reinforcement of the true level playing field for all actors at the Union level while pointing out significant failures in the Union's supervision of ever more integrated financial markets (see García-Margallo y Marfil Report on the Commission communication on implementing the framework for financial markets: Action Plan (2000) , Van den Burg Report on prudential supervision rules in the European Union (2002) , Van den Burg Report on financial services policy (2005-2010) - White Paper (2007) and Van den Burg & Daianu Report with recommendations to the Commission on Lamfalussy follow-up: future structure of supervision (2008) ). In addition, see also Skinner- Solvency II report (2009) and Gauzès-CRA regulation (2009)).
Amendment  2 Proposal for a regulation Recital 3
Text proposed by the Commission	Amendment
(3)       In its final report presented on 25 February 2009, the de Larosière Group recommended, among other things, the establishment of a Community level body charged with overseeing risk in the financial system as a whole.	(3)       In its final report presented on 25 February 2009, the de Larosière Group recommended, among other things, the establishment of a Union level body charged with overseeing risk in the financial system as a whole
	(The change should apply throughout the text).
Amendment  3 Proposal for a regulation Recital 5
Text proposed by the Commission	Amendment
(5) In its Communication entitled "European Financial Supervision" of 27 May 2009, the Commission set out a series of reforms to the current arrangements for safeguarding financial stability at the EU level, notably including the creation of a European Systemic Risk Board (ESRB) responsible for macro-prudential oversight. The Council on 9 June 2009 and the European Council at its meeting of 18 and 19 June supported the view of the Commission and welcomed the Commission's intention to bring forward legislative proposals so that the new framework is in place in the course of 2010. In line with the views of the Commission, it concluded inter alia that the ECB “should provide analytical, statistical, administrative and logistical support to the ESRB, also drawing on technical advice from national Central Banks and supervisors”.	(5) In its Communication entitled "European Financial Supervision" of 27 May 2009, the Commission set out a series of reforms to the current arrangements for safeguarding financial stability at Union level, notably including the creation of a European Systemic Risk Board (ESRB) responsible for macro-prudential oversight. The Council on 9 June 2009 and the European Council at its meeting of 18 and 19 June supported the view of the Commission and welcomed the Commission's intention to bring forward legislative proposals so that the new framework is in place in the course of 2010. In line with the views of the Commission, it concluded inter alia that the ECB “should provide analytical, statistical, administrative and logistical support to the ESRB, also drawing on technical advice from national central banks and supervisors”. The support provided to the ESRB by the ECB and the tasks assigned to the ESRB should be without prejudice to the principle of the independence of the ECB in the performance of its tasks pursuant to the Treaty on the Functioning of the European Union.
Amendment  4 Proposal for a regulation Recital 5 a (new)
Text proposed by the Commission	Amendment
	(5a) Given the integration of international financial markets, there is a need for a strong commitment on the part of the Union at the global level. The ESRB should draw on expertise from a high-level scientific committee and take on all the global responsibilities required in order to ensure that the voice of the Union is heard on financial stability matters, especially in cooperating closely with the International Monetary Fund (IMF), the Financial Services Board (FSB) and all the partners of the Group of Twenty (G-20).
Amendment   5 Proposal for a regulation Recital 6
Text proposed by the Commission	Amendment
(6) The present Community arrangements place too little emphasis on macro-prudential oversight. Responsibility for macro-prudential analysis remains fragmented, and is conducted by various authorities at different levels with no mechanism to ensure that macro-prudential risks are adequately identified and that warnings and recommendations are issued clearly, followed up and translated into action.	(6) A proper functioning of Union and global financial systems and the mitigation of threats thereto require enhanced consistency between macro and the micro supervision. As stated in the Turner review, “A regulatory response to the global banking crisis”, of March 2009, "Sounder arrangements require either increased national powers, implying a less open single market, or a greater degree of European integration". Given the role of a sound financial system in terms of its contribution to competitiveness and growth in the Union and its impact on the real economy, the de Larosière Group, followed by the EU institutions, have opted for a greater degree of European integration.
Amendment  6 Proposal for a regulation Recital 6 b (new)
Text proposed by the Commission	Amendment
	(6b) The de Larosière report also states that macro-prudential supervision is not meaningful unless it can somehow impact on supervision at the micro-level whilst micro-prudential supervision cannot effectively safeguard financial stability without adequately taking account of macro-level developments.
Amendment  7 Proposal for a regulation Recital 6 c (new)
Text proposed by the Commission	Amendment
	(6c) A European System of Financial Supervision (ESFS) should be established, gathering the actors of financial supervision both at a national and Union level, to act as a network. Pursuant to the principle of sincere cooperation in accordance with Article 4(3) of the Treaty on European Union, the parties to the ESFS shall cooperate with trust and full mutual respect, in particular in ensuring that appropriate and reliable information flows between them. At Union level, the network should be composed of the ESRB and three micro-supervisory authorities: the European Supervisory Authority (Banking), established by Regulation (EU) No …/2010, the European Supervisory Authority (Securities and Markets), established by Regulation (EU) No …/2010, and the European Supervisory Authority (Insurance and Occupational Pensions) established by Regulation (EU) No …/2010.
	(The changes to the European Supervisory Authorities' names should apply throughout the text.)
Amendment  8 Proposal for a regulation Recital 8 a (new)
Text proposed by the Commission	Amendment
	(8a) The ESRB should decide whether a recommendation should be kept confidential or made public, bearing in mind that public disclosure can help to foster compliance with the recommendations in certain circumstances.
Amendment  9 Proposal for a regulation Recital 8 b (new)
Text proposed by the Commission	Amendment
	(8b) If the ESRB detects a risk which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the Union, it should be able to issue a warning declaring the existence of an emergency situation. In such a case the ESRB should promptly inform the European Parliament, the Council, the Commission and the European Supervisory Authority (ESA) of its warning. In the event of an emergency, the ESRB should issue emergency warnings.
Amendment  10 Proposal for a regulation Recital 9
Text proposed by the Commission	Amendment
(9) In order to increase their weight and legitimacy, such warnings and recommendations should be transmitted through the Council and, where appropriate, the European Banking Authority established by Regulation (EC) No …/… the European Parliament and of the Council , the European Securities and Markets Authority established by Regulation (EC) No …/… of the European Parliament and of the Council , and the European Insurance or the Occupational Pension Authority established by Regulation (EC) No …/…of the European Parliament and of the Council .	(9) In order to increase their weight and legitimacy, such warnings and recommendations should be transmitted through the European Parliament, the Council and, where appropriate, the ESA.
Amendment  11 Proposal for a regulation Recital 10
Text proposed by the Commission	Amendment
(10) The ESRB should also monitor compliance with its recommendations, based on reports from addressees, in order to ensure that its warnings and recommendations are effectively followed. Addressees of recommendations should act on them unless inaction can be adequately justified ("act or explain" mechanism).	(10) The ESRB should also monitor compliance with its recommendations, based on reports from addressees, in order to ensure that its warnings and recommendations are effectively followed. Addressees of recommendations should act on them unless inaction can be adequately justified ("act or explain" mechanism), in particular towards the European Parliament.
Amendment  12 Proposal for a regulation Recital 11
Text proposed by the Commission	Amendment
(11) The ESRB should decide whether a recommendation should be kept confidential or made public, bearing in mind that public disclosure can help to foster compliance with the recommendations in certain circumstances.	deleted
Amendment  13 Proposal for a regulation Recital 12
Text proposed by the Commission	Amendment
(12) The ESRB should report to the European Parliament and the Council at least annually, and more frequently in the event of widespread financial distress.	(12) The ESRB should report to the European Parliament and the Council at least biannually, and more frequently in the event of widespread financial distress.
Amendment  14 Proposal for a regulation Recital 18
Text proposed by the Commission	Amendment
(18) Given the integration of international financial markets at international level and the contagion risk of financial crises, the ESRB should coordinate with the International Monetary Fund and the newly established Financial Stability Board, which are expected to provide early warnings of macro-prudential risks at the global level.	deleted
Amendment  15 Proposal for a regulation Recital 20 a (new)
Text proposed by the Commission	Amendment
	(20a) With regard to the de Larosière report, a step-by-step approach is necessary. The European Parliament and the Council should conduct a full-review of the ESFS, the ESRB and the ESA by ...*.
	* OJ please insert date: three years after the entry into force of this Regulation
Amendment  16 Proposal for a regulation Article 1 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	The ESFS shall comprise:
	(a) the ESRB;
	(b) the European Supervisory Authority (Securities and Markets) established by Regulation (EU) No .../2010 (ESMA);
	(c) the European Supervisory Authority (Insurance and Occupational Pensions) established by Regulation (EU) No …/2010 (EIOPA);
	(d) the European Supervisory Authority (Banking) established by Regulation (EU) No …/2010 (EBA);
	(e) the European Supervisory Authority (Joint Committee ) provided for by Article 40 of each of Regulation (EC) No …/… [EBA], No .../... [ESMA], No …/…[EIOPA];
	(f) the authorities in the Member States as specified in Article 1(2) of Regulation (EU) No .../... [ESMA], Article 1(2) of Regulation (EU) No …/2009 [EIOPA] and Article 1(2) of Regulation (EU) No …/… [EBA],
	(g) the Commission for the purposes of carrying out the tasks referred to in Articles 7 and 9 of Regulations (EU) No.../...[EBA], No .../... [ESMA] and No …/…[EIOPA];
	The ESAs referred to in points (b), (c) and (d) shall have their seat in [xxx].
Amendment  17 Proposal for a regulation Article 1 – paragraph 1 b (new)
Text proposed by the Commission	Amendment
	Pursuant to the principle of sincere cooperation in accordance with Article 4(3) of the Treaty on European Union, the parties to the ESFS shall cooperate with trust and full mutual respect, in particular in ensuring that appropriate and reliable information flows between them.
Amendment  18 Proposal for a regulation Article 3 – paragraph 2 – point c
Text proposed by the Commission	Amendment
(c) issue warnings where risks are deemed to be significant;	(c) issue warnings where risks are deemed to be significant and, where appropriate, declare the existence of an emergency situation;
Amendment  19 Proposal for a regulation Article 3 – paragraph 2 – point f
Text proposed by the Commission	Amendment
(f) cooperate closely with the European System of Financial Supervisors and , where appropriate, provide the European Supervisory Authorities with the information on systemic risks required for the achievement of their tasks;	(f) cooperate closely with all the other parties to the ESFS and, where appropriate, provide the European Supervisory Authorities with the information on systemic risks required for the achievement of their tasks;
Amendment  20 Proposal for a regulation Article 3 – paragraph 2 – point f a (new)
Text proposed by the Commission	Amendment
	(fa) participate in the Joint Committee of European Supervisory Authorities;
Amendment  21 Proposal for a regulation Article 5 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. Before taking office, the Chair and first Vice-Chair of the ESRB shall present to the European Parliament, at a public hearing, how they intend to discharge their duties under this Regulation. The second Vice-Chair shall be heard by the European Parliament in his or her role as Chair of one of the European Supervisory Authorities, in accordance with Article XX of Regulations (EC) No …/… [EBA], No .../... [ESMA], No …/…[EIOPA].
Amendment  22 Proposal for a regulation Article 9 – paragraph 3 a (new)
Text proposed by the Commission	Amendment
	3a. Where appropriate, high-level representatives from international institutions carrying out other related activities may be invited to attend the meetings of the General Board.
Amendment  23 Proposal for a regulation Article 9 – paragraph 3 b (new)
Text proposed by the Commission	Amendment
	3b. Where appropriate, and on an ad hoc basis, one high-level representative from the European Economic Area may be invited to attend the meetings of the General Board.
Amendment  24 Proposal for a regulation Article 13
Text proposed by the Commission	Amendment
In performing its tasks, the ESRB shall seek, where appropriate, the advice of relevant private sector stakeholders.	In performing its tasks, the ESRB shall seek, where appropriate, the advice of relevant private-sector stakeholders including trade unions, civil society organisations and consumer associations.
Amendment  25 Proposal for a regulation Article 15 – paragraph 3
Text proposed by the Commission	Amendment
3. The ESRB may request information from the European Supervisory Authorities in summary or collective form, such that individual financial institutions cannot be identified. If the requested data are not available to those Authorities or are not made available in a timely manner, the ESRB may request the data from national supervisory authorities, national central banks or other authorities of Member States.	3. On request by the ESRB, the European Supervisory Authorities shall provide information in summary or collective form, such that individual financial institutions cannot be identified. If the requested data are not available to those Authorities or are not made available in a timely manner, national supervisory authorities, national central banks or other authorities of Member States shall provide the data pursuant to a request by the ESRB.
Amendment  26 Proposal for a regulation Article 15 – paragraph 4
Text proposed by the Commission	Amendment
4. The ESRB may address a reasoned request to the European Supervisory Authorities to provide data that are not in summary or collective form.	4. Pursuant to a reasoned request by the ESRB, the European Supervisory Authorities shall provide data that are not in summary or collective form.
Amendment  27 Proposal for a regulation Article 15 – paragraph 5 a (new)
Text proposed by the Commission	Amendment
	5a. Staff of the ESRB may be invited together with the ESAs, to meetings between supervisors and the systemically important financial groups, in particular the colleges of supervisors, and may ask questions and receive first-hand relevant information.
Amendment  28 Proposal for a regulation Article 16 – paragraph 3
Text proposed by the Commission	Amendment
3. The warnings or recommendations shall also be transmitted to the Council and, where addressed to one or more national supervisory authority, to the European Supervisory Authorities.	3. The warnings or recommendations shall also be transmitted to the European Parliament, the Council and, where addressed to one or more national supervisory authority, to the European Supervisory Authorities.
Amendment  29 Proposal for a regulation Article 16 a (new)
Text proposed by the Commission	Amendment
	Article 16a
	Action in emergency situations
	1. In the event of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the European Union, the ESRB, acting in accordance with point (b) of Article 3(2) and Article 10 of each of Regulations (EU) No …/… [EBA], No .../... [ESMA] and No …/…[EIOPA], may issue warnings, on its own initiative or following a request by an ESA, the European Parliament, the Council or the Commission, declaring the existence of an emergency situation.
	2. As soon as it issues a warning, the ESRB shall simultaneously notify the European Parliament, the Council, the Commission and the relevant ESA.
	3. The ESRB shall review the decision referred to in paragraph 1 on its own initiative or following a request by a ESA, the European Parliament, the Council or the Commission.
Amendment  30 Proposal for a regulation Article 17 – paragraph 1
Text proposed by the Commission	Amendment
1. Where a recommendation referred to in letter (d) of Article 3(2) is addressed to one or more Member States, one or more European Supervisory Authorities, or one or more national supervisory authorities, the addressees shall communicate the actions undertaken in response to the recommendations to the ESRB or explain why they have not acted. The Council and, where relevant, the European Supervisory Authorities shall be informed.	1. Where a recommendation referred to in point (d) of Article 3(2) is addressed to one or more Member States, one or more European Supervisory Authorities, or one or more national supervisory authorities, the addressees shall communicate the actions undertaken in response to the recommendations to the ESRB or explain why they have not acted. The European Parliament, the Council and, where relevant, the European Supervisory Authorities shall be informed.
Amendment  31 Proposal for a regulation Article 17 – paragraph 2
Text proposed by the Commission	Amendment
2. If the ESRB decides that its recommendation has not been followed and that the addressees have failed to explain their inaction appropriately, it shall inform the Council and, where relevant, the European Supervisory Authorities concerned.	2. If the ESRB decides that its recommendation has not been followed and that the addressees have failed to explain their inaction appropriately, it shall inform the European Parliament, the Council and, where relevant, the European Supervisory Authorities concerned.
Amendment  32 Proposal for a regulation Article 17 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. Where a recommendation has been made public and has not been followed and the addressees of the recommendation have failed to explain their inaction, the European Parliament may, after consulting the ESRB and the Council, invite the addressees to be questioned by the European Parliament..
Amendment  33 Proposal for a regulation Article 19 – paragraph 1
Text proposed by the Commission	Amendment
1. The ESRB shall report at least annually to the European Parliament and to the Council.	1. The ESRB shall report at least biannually to the European Parliament and to the Council.
Amendment  34 Proposal for a regulation Article 19 – paragraph 1 a (new)
Text proposed by the Commission	Amendment
	1a. The reports referred to in this Article shall be made available to the public.
Amendment  35 Proposal for a regulation Article 19 – paragraph 2
Text proposed by the Commission	Amendment
2. The ESRB shall also examine specific issues at the invitation of the Council or the Commission.	2. The ESRB shall also examine specific issues at the invitation of the European Parliament, the Council or the Commission.
Amendment  36 Proposal for a regulation Article 19 – paragraph 2 a (new)
Text proposed by the Commission	Amendment
	2a. The President of the ESRB and the other members of the Steering Committee may, at the request of the European Parliament, be heard by the competent Committees of the European Parliament.
Amendment  37 Proposal for a regulation Article 20
Text proposed by the Commission	Amendment
The Council shall examine this Regulation on the basis of a report from the Commission three years after its entry into force and shall determine whether the missions and organisation of the ESRB need to be reviewed after having received an opinion from the ECB.	The European Parliament and the Council shall examine this Regulation on the basis of a report from the Commission three years after its entry into force and shall determine whether the missions and organisation of the ESRB need to be reviewed after having received an opinion from the ECB.
	The report should assess, in particular, whether:
	– the architecture of the ESFS needs to be simplified and reinforced, in order to increase the coherence between the macro and the micro levels as well as between the ESAs;
	– the regulatory powers of the ESAs need to be increased ;
	– the evolution of the ESFS is consistent with that of the global evolution;
	– there is sufficient diversity and excellence within the ESFS ;

PROCEDURE

Title	Macro-prudential oversight of the financial system and establishment of a European Systemic Risk Board
References	COM(2009)0499 – C7-0166/2009 – 2009/0140(COD)
Committee responsible	ECON
Opinion by        Date announced in plenary	AFCO 7.10.2009
Rapporteur        Date appointed	Íñigo Méndez de Vigo 24.11.2009
Discussed in committee	25.1.2010		6.4.2010
Date adopted	7.4.2010
Result of final vote	+: –: 0:	19 0 2
Members present for the final vote	Carlo Casini, Andrew Duff, Ashley Fox, Matthias Groote, Roberto Gualtieri, Gerald Häfner, Ramón Jáuregui Atondo, Constance Le Grip, David Martin, Jaime Mayor Oreja, Morten Messerschmidt, Paulo Rangel, Algirdas Saudargas, György Schöpflin, Guy Verhofstadt
Substitute(s) present for the final vote	Elmar Brok, Jean-Luc Dehaene, Enrique Guerrero Salom, Anneli Jäätteenmäki, Íñigo Méndez de Vigo, Adrian Severin, Tadeusz Zwiefka
Substitute(s) under Rule 187(2) present for the final vote	Emma McClarkin

PROCEDURE

Title	Macro-prudential oversight of the financial system and establishment of a European Systemic Risk Board
References	COM(2009)0499 – C7-0166/2009 – 2009/0140(COD)
Date submitted to Parliament	23.9.2009
Committee responsible        Date announced in plenary	ECON 7.10.2009
Committee(s) asked for opinion(s)        Date announced in plenary	BUDG 7.10.2009		EMPL 7.10.2009		JURI 7.10.2009		AFCO 7.10.2009
Not delivering opinions        Date of decision	BUDG 10.2.2010		EMPL 22.10.2009
Rapporteur(s)        Date appointed	Sylvie Goulard 20.10.2009
Discussed in committee	23.11.2009		23.2.2010		23.3.2010		27.4.2010
Date adopted	10.5.2010
Result of final vote	+: –: 0:	34 0 4
Members present for the final vote	Burkhard Balz, Sharon Bowles, Udo Bullmann, Pascal Canfin, Nikolaos Chountis, George Sabin Cutaş, Leonardo Domenici, Derk Jan Eppink, Diogo Feio, Markus Ferber, Vicky Ford, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Othmar Karas, Rodi Kratsa-Tsagaropoulou, Astrid Lulling, Ivari Padar, Antolín Sánchez Presedo, Olle Schmidt, Edward Scicluna, Peter Simon, Peter Skinner, Theodor Dumitru Stolojan, Ramon Tremosa i Balcells
Substitute(s) present for the final vote	Pervenche Berès, Carl Haglund, Syed Kamall, Philippe Lamberts, Catherine Stihler, Pablo Zalba Bidegain
Substitute(s) under Rule 187(2) present for the final vote	Andrea Cozzolino, Michel Dantin, Frank Engel, Roger Helmer, Christa Klaß, Elisabeth Morin-Chartier