Activities of Wolf KLINZ related to 2013/2021(INI)
Shadow reports (1)
REPORT on reforming the structure of the EU banking sector PDF (197 KB) DOC (112 KB)
Amendments (41)
Amendment 3 #
Motion for a resolution
Citation 6 a (new)
Citation 6 a (new)
- having regard to the proposal of 6 June 2012 for a directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directives 77/91/EEC and 82/891/EC, Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC and 2011/35/EC and Regulation (EU) No 1093/2010,
Amendment 14 #
Motion for a resolution
Recital B
Recital B
B. whereas in the five years since the 2008 global economic and financial crisis, the EU economy has remained in a state of recession, with Member States providing subsidiestate anid implicit guarantees to banksn form of capital and guarantees to banks and markets that have remained fragmented;
Amendment 26 #
Motion for a resolution
Recital C
Recital C
C. whereas excessive risk-taking, excessive leverage, inadequate capital and liquidity requirements, weak banking and markets supervision and the excessive complexity of the overall banking system were at the root of the financial crisis;
Amendment 27 #
Motion for a resolution
Recital C a (new)
Recital C a (new)
Ca. whereas the loss of prudence in accounting standards as a consequence of the adoption of international financial reporting standards played and continues to play a central role in allowing banks to give a view of their accounts that was and is not always true and fair with particular reference to IAS 39 on loan loss provisioning;
Amendment 35 #
Motion for a resolution
Recital D
Recital D
D. whereas the current post-crisis weakness in the structure of EU bankcapitalisation of EU banks, massive deleveraging and rising funding costs for banks in some Member States demonstrates the need for reformfurther reform of capital requirements in order to serve the wider needs of the economy, break the link between sovereigns and banks and restore the confidence in capital markets;
Amendment 46 #
Motion for a resolution
Recital E
Recital E
E. whereas the eighth (December 2012) edition of the Commission's Consumer Markets Scoreboard clearly indicates that consumer trust in the EU banking sector is at an all-time low and that the industry has high levels of noncompliance with consumer protection legislation5 and the consumers' confidence needs to be restored ;
Amendment 55 #
Motion for a resolution
Recital F
Recital F
F. whereas research by the Bank of International Settlements (BIS) suggests that once bank assets exceed a country's GDP, its financial sector hasmight have a negative impact on economic growth, as human and financial resources are drained from other areas of economic activity6 ;
Amendment 67 #
Motion for a resolution
Recital G
Recital G
G. whereas the financial crisis demonstrated the problem of potential cross- contamination between banks' retail and investmentcore business and non-banking holding activities;
Amendment 79 #
Motion for a resolution
Recital H
Recital H
H. whereas theevery adopted Commission proposal should provide for a strong, stable and resilient banking sector for the internal market while respecting the diversity of the Member States' banking sectors;
Amendment 90 #
Motion for a resolution
Recital I
Recital I
I. whereas, since it is neither feasible nor desirable to effect a bank separation post- failure, an effective recovery and resolution regime is needed in order to provide authorities with a credible set of tools, including a bridge bank, so that they can intervene sufficiently early and quickly in an unsound or failing bank to enable its essential financial and economic functions to continue, while minimising the impact on financial stability and ensuring that appropriate losses are imposed on the shareholders and creditors who bore the risk of investing in the institution in question, and not by taxpayers or insured depositors;
Amendment 111 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Welcomes the HLEG's analysis and recommendations on banking reform and considers them a sound basis for initiatingdiscussions about necessity of potential additional reforms;
Amendment 128 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Takes the view that while current proposals for reforms of EU banking sector rules (including the Capital Requirements Directive and Regulation, the Recovery and Resolution Directive, the Single Supervisory Mechanism, the Deposit Guarantee Schemes Directive and shadow banking initiatives) are vital, a more fundamental reform of the banking structure is essential, and complementary to the other proposals;
Amendment 140 #
Motion for a resolution
Paragraph 2 a (new)
Paragraph 2 a (new)
2a. Deplores the national initiatives in France, Germany and UK that, although well intended, risk to undermine the Single Market and distort competition in the EU banking sector;
Amendment 145 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Insists that the Commission's impact assessment include a thorough assessment of the cost to both public finances and financial stability of the failure of an EU- based bank during the current crisis, together with information on the nature of the EU's current universal banking model, including the size and balance sheets of the retail and investment activities of all universal banks operating in the EU, broken down by individual bank and countryincluding all cumulative costs and benefits of adopted legislation for the EU banking sector together with information on additional costs and benefits of other proposals currently discussed and expected to be adopted;
Amendment 167 #
Motion for a resolution
Paragraph 5 a (new)
Paragraph 5 a (new)
5a. Notes that the HLEG did not look at the issue of accounting standards and their role in financial crisis in sufficient depth; notes that European company law requires that accounts must be true and fair in order for directors of a company to discharge their liabilities to creditors and shareholders of companies; suggests that as a consequence of international financial reporting standards being overly complex and being principally about providing information to the share trading part of capital markets, these standards did and do not give a true and fair view of banks' accounts; notes that despite commitments from the IASB to update IAS 39 on loan loss provisioning from an incurred to expected loss model, its adoption has been delayed due to concerns expressed by FASB that the revised IASB model is still not a lifetime expected loss model; notes that although moving to an expected loss model recognises the problems caused by IAS 39 during the crisis, the added complexity may well create problems of their own; argues that, therefore, structural reform must include a thorough assessment of what role accounts should play in driving better governance of banks;
Amendment 176 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Considers that the core principle of potential banking reform must be to deliver a safe, stable and efficient banking system that serves the needs of the real economy, customers and consumers; takes the view that structurevery additional reform must stimulate economic growth by supporting the provision of credit to the economy, in particular to SMEs and start-ups, provide greater resilience against potential financial crises, restore trust and confidence in banks and remove risks to public finances;
Amendment 184 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6a. Calls for more legal certainty and clarity in all ongoing and additional reforms, which have direct impact on funding costs for banks and - in consequence - also effect lending to the real economy;
Amendment 191 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Considers that an effective banking system must deliver a change in banking culture in order toand reduce complexity, enhance competitionsimplify the structure, limit interconnectedness between risky and commercialcore banking and non-banking holding activities, improve corporate governance, create a responsible and sustainable remuneration system based on long-term incentives, allow effective bank resolution and recovery, reinforce the customer oriented banking, reinforce bank capital and deliver credit to the real economy;
Amendment 217 #
Motion for a resolution
Paragraph 8
Paragraph 8
Amendment 243 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Urges the Commission to come forward with a proposal for such mandatory separation through the establishment of a thorough, transparent and credible ‘ring fence’ around bank activities that are vital for the real economy, such as those relating to credit functions, payment systems and deposits; takes the view that in the event of a bank failure, the ring fence must ensure that the retail entity continues business unaffected by operational problems, financial losses, funding shortages or reputational damage resulting from the resolution or insolvency of the investment entitysupport the legislators in a fast and credible implementation of the banking crisis management and resolution directive proposal, foreseeing a mandatory simplification of banking structure in case of a stated non-resolvability in the resolution plan of an institution;
Amendment 264 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Urges the Commission to ensure that trading activities do not benefit from implicit guarantees, the use of insured deposits or taxpayer bailouts and that these activities do not pose a risk to the delivery of ring-fenced retail serviceresponsible management of banks and competent supervisors to ensure that trading activities in the banking system do not pose a systemic risk and are subject to robust risk management controls;
Amendment 282 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Urges the Commissionmanagement of banks and supervisors to ensure that where banks undertake trading activities, the risks and costs associated with those activities are borne by their trading arm and notunit; calls for internal control mechanisms to ensure that losses are not borne by otheir ring-fenced retail armr units and asks for mandatory reporting of profits and losses borne by all relevant units;
Amendment 294 #
Motion for a resolution
Paragraph 12
Paragraph 12
Amendment 339 #
Motion for a resolution
Paragraph 13
Paragraph 13
Amendment 349 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Underlines the necessity of assessing the systemic risk presented by both the retail and investment entitiebanks, as well as by the group as a wholeuniversal banks, with a view to the application of appropriate capital buffers and liquidity requirements for each entity as well as regular checks of the quality of assets held by banks across the EU since RWAs lost their credibility in the financial crisis;
Amendment 358 #
Motion for a resolution
Paragraph 14 a (new)
Paragraph 14 a (new)
14a. Stresses the need for enhanced macro-surveillance as one of the crucial aspects to mitigate risks in the interconnected EU banking sector;
Amendment 360 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Urges the Commission to ensure that the retail entityevery bank has sufficient capital and, liquid assets and bail-inable instruments to enable it, in the event of the bank's failure, to maintain depositors' access to funds, and to protect the essential services of the ring-fenced arm from the risk of disorderly failure and to prioritise paying out depositors in a timely fashthrough an efficient resolution;
Amendment 377 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Urges the Commission and competent supervisors to ensure that adequate differentiation exists in terms of capital, leverage and liquidity requirements between the investment and, retail entities, withand universal banks, and emphasis on higher capital requirements for the investment entityspecially appropriate and needed capital and liquidity flows within banking groups operating in different Member States are ensured;
Amendment 393 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Calls on the Commission to implementassess the proposals set out in the HLEG's report in the area of corporate governance of separated banks, including a) governance and control mechanisms, b) risk management, c) incentive schemes, d) risk disclosure and e) sanctions, taking into account where the proposals have been addressed in adopted legislation and aiming at enforcing faster change of bankers' behaviours;
Amendment 400 #
Motion for a resolution
Paragraph 19
Paragraph 19
Amendment 409 #
Motion for a resolution
Paragraph 20
Paragraph 20
Amendment 417 #
Motion for a resolution
Paragraph 21
Paragraph 21
21. Urges the Commission to includexplore possible and adequate provisions introducing personal accountability and liability for board members on both sides of the ring fence and at group level;
Amendment 423 #
Motion for a resolution
Paragraph 22
Paragraph 22
22. Urges the Commission to continue the reform of banks' compensation and remuneration culture by prioritising long- term incentives for variable remuneration with largerappropriate deferral periods up to retirement5 years;
Amendment 428 #
Motion for a resolution
Paragraph 23
Paragraph 23
23. Urges the Commission to ensure that remuneration systems prioritismight include the use of instruments such as shares, options and bonds subject to bail- in, and shares, rather thanlongside cash;
Amendment 441 #
Motion for a resolution
Paragraph 26
Paragraph 26
Amendment 448 #
Motion for a resolution
Paragraph 27
Paragraph 27
27. Asks the Commission to propose that adequate resources and powers be allocated to nationalcompetent supervisors; y authorities including SSM;
Amendment 449 #
Motion for a resolution
Paragraph 27 a (new)
Paragraph 27 a (new)
27a. Urges the Commission to conduct a study to ensure that accounting standards used by financial institutions give a genuinely true and fair view of banks' financial health; points out that accounts are the main source of information for an investor to understand whether or not a company is a going concern or not; notes that auditors can only sign off accounts if they are true and fair, independent of the financial standards used by preparers of financial statements; believes that if auditors are unsure that a company is a going concern they should not sign off the company's accounts, even if they have been drawn up in line with accounting standards; this should however be a driver of better management of the company in question; suggests that international financial reporting standards do not necessarily give a true and fair view of accounts, as shown by numerous examples of banks collapsing despite their accounts having been signed off by auditors;
Amendment 461 #
Motion for a resolution
Paragraph 29
Paragraph 29
Amendment 472 #
Motion for a resolution
Paragraph 30
Paragraph 30
30. Urges the Member StatesCommission to ensure that their national supervisorscompetent supervisory authorities including SSM have the clear objective of promoting effective competition in their banking sectors;
Amendment 474 #
Motion for a resolution
Paragraph 31
Paragraph 31
Amendment 483 #
Motion for a resolution
Paragraph 32
Paragraph 32
32. Calls on the Commission to brevaluate the need for any additional banking reforward the necessary structural reforms outlined in this reportms considered in this report, provided their necessity will be proven in the Commission impact assessment analysing all costs and benefits of all adopted proposals, which, while maintaining the integrity of the internal market, respect the diversity of national banking systems and ensure Member States' ability to reinforce them where appropriate;