Activities of Rina Ronja KARI related to 2015/0225(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms PDF (1 MB) DOC (235 KB)
Amendments (12)
Amendment 46 #
Proposal for a regulation
Recital 1
Recital 1
(1) Securitisations awere an important constituent part of well-functioning financial markets insofar as they contribute to diversifying institutions' funding sources and releasing regulatory capital which can then be reallocated to support further lending. Furthermore, securitisations provide institutions and other market participants with additional investment opportunities, thus allowing portfolio diversification and facilitating the flow of funding to businesses and individuals both within Member States and on a cross-border basis throughout the Union. These benefits, however, should be weighed against their potential costs. As seen during the first phase of financial crisis starting in the summer of 2007the central cause of the financial crisis, namely because of systemic flaws in the financial system and investors' lack of due diligence as well as institutions lack of responsibility. As seen during the financial crisis, unsound practices in securitisation markets resulted in significant threats to the integrity of the financial system, namely due to excessive leverage, opaque and complex structures that made pricing problematic, mechanistic reliance on external ratings or misalignment between the interests of investors and originators ("agency risks").
Amendment 50 #
Proposal for a regulation
Recital 2
Recital 2
(2) In recent years, securitisation issuance volumes in the Union have remained below their pre-crisis peak for a number of reasons, among them the stigma generally associated with these transactions. The recoincluding the low demand for non-bank lending. According to the ECB SAFE survery of securitisation markets should be based on sound and prudent market practi2015, European SMEs’ biggest concern today is "finding customers" whereas "access to prevent a recurrence of the set of circumstances that triggered the financial crisis. To that end, Regulation [Securitisation Regulation] lays down the substantive elements of an overarching securitisation framework, with ad-hoc criteria to identify simple, transparent finance" is their lowest. It is therefore not clear that there is an overall European need to promote non-bandk standardised ("STS") securitisations and a system of supervision to monitor the correct application of these criteria by originators, sponsors, issueources of finance for SMEs. A revival of securitisation is likely to first and institutional investors. Furthermore, Regulation [Securitisation Regulation] provides for a sforemost benefit the balance sheets of common requirements on risk retention, due diligence and disclosure for all financial services sectorsbanks at the expense of financial stability.
Amendment 52 #
Proposal for a regulation
Recital 2 a (new)
Recital 2 a (new)
(2a) Without banking structural reform that addresses the problem of 'too-big-to- fail' banks, a revival of securitisation is likely to once again fail and harm the real economy and ultimately the welfare and lives of ordinary people.
Amendment 57 #
Proposal for a regulation
Recital 4
Recital 4
(4) Capital requirements for positions in a securitisation under Regulation (EU) No 575/2013 should be subject to the same calculation methods for all institutions. In the first instance and to remove any form of mechanistic reliance on external ratings, an institution should use its own calculation of regulatory capital requirements where the institution has permission to use the In. Relying on external Rratings Based approach (the "IRB") in relation to exposures of the same type as those underlying the securitisation and is able to calculate regulatory capital requirements in relation to the underlying exposu agencies is not desirable. However, the flaws of internal models ares as if these had not been securitised ("Kirb"), in each case subject to certain pre-defined inputs (the "SEC- IRBA"). A Securitisation External Ratings-Based Approach (the "SEC- ERBA") should then be available to institutions that may not use the SEC- IRBA in relation to their positions in a given securitisation. Under the SEC- ERBA, capital requirements should be assigned to securitisation tranches on the basis of their external rating. When the first two approaches are not available or the use of the SEC-ERBA would result in incommensurate regulatory capital requirements relative to the credit risk embedded in the underlying exposures, ilso well known and have yet to be addressed. Banks can manipulate risk weights and different banks can give very different risk weights to similar assets. Institutions should be able to apply the Securitisation Standardised Approach (the "SEC-SA") which should rely on a supervisory-provided formula using as an input the capital requirements that would be calculated under the Standardised Approach to credit risk (the "SA") in relation to the underlying exposures if these had not been securitised ("Ksa").
Amendment 64 #
Proposal for a regulation
Recital 5
Recital 5
(5) Agency and model risks are more prevalent for securitisations than for other financial assets and give rise to somea high degree of uncertainty in the calculation of capital requirements for securitisations even after all appropriate risk drivers have been taken into account. Securitisations are too complex and have a fundamental flaw, which is a lack of transparency and accountability. In order to capture those risks adequately, Regulation (EU) No. 575/2013 should be amended to provide for a minimum 15% risk weight floor for all securitisation positions. Re- securitisations, however, exhibit greater complexity and riskiness and, accordingly, positions in them, should be subject to a more conservative regulatory capital calculation and a 100% risk weight floor.
Amendment 126 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Regulation 575/2013
Article 254 – Paragraph 2 – point a
Article 254 – Paragraph 2 – point a
(a) an institution shall use the Internal Ratings-Based Approach (SEC-IRBA) where the conditions set out inSecuritisation Standardised Approach (SEC-SA) in accordance with Articles 258 are met63 and 264;
Amendment 127 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
(b) where the SEC-IRBSA may not be used, institutions shall use the Securitisation External Ratings-Based Approach (SEC-ERBA) for rated positions or positions in respect of which an inferred rating may be used in accordance with Articles 261 and 262;
Amendment 133 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7 Regulation 575/2013
Article 1 – paragraph 1 – point 7 Regulation 575/2013
Amendment 137 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Regulation 575/2013
Article 254 – paragraph 3
Article 254 – paragraph 3
Amendment 159 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Regulation 575/2013
Article 260 – paragraph 2
Article 260 – paragraph 2
risk weight floor for senior securitisation positions = 1020%
Amendment 177 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Regulation 575/2013
Article 264 – paragraph 1 – point 1
Article 264 – paragraph 1 – point 1
risk weight floor for senior securitisation positions = 1020 %
Amendment 191 #
Proposal for a regulation
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Regulation 575/2013
Article 270– paragraph 1 – point c
Article 270– paragraph 1 – point c
(c) the securitisation is backed by a pool of exposures to undertakings, provided that at least 8100% of those in terms of portfolio balance qualify as SMEs as defined in Art 501 at the time of issuance of the securitisation;