23 Amendments of Sharon BOWLES related to 2013/2021(INI)
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 41 #
Motion for a resolution
Recital D
Recital D
D. whereas the current post-crisis weakness in the structure of EU bankweaknesses and excessive interconnectedness exposed in the financial crisis demonstrates there is a need for banking reform in order to serve the wider needs of the economy;
Amendment 52 #
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 has a negative impact on economic growth, as human and financial resources are drained from other areas of economic activity6 . Nevertheless, other reports (IMF) indicate economies can benefit from specialisation; further, with regard to banking it is the domestic exposure rather than the total sector size that should be considered for affordability;
Amendment 63 #
Motion for a resolution
Recital G
Recital G
G. whereas the financial crisis demonstrated the problem of cross- contaminationexposures and interconnectedness of banks and raises concerns over internal conflicts between banks' retail and investment activities;,
Amendment 127 #
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, andestablish better oversight and protection, structural reforms are complementary to the otherose proposals;
Amendment 137 #
Motion for a resolution
Paragraph 2 a (new)
Paragraph 2 a (new)
2a. It is noted that capital rules are overly complex and that structural reforms should not add to complexity and should be aimed at paving the way for simplification and thereby greater transparency. Simplicity should also be emphasised in the approval of recovery and resolution plans;
Amendment 164 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Urges the Commission to ensure that the core principles of reform detailed in paragraph 7 also apply to the shadow banking sector and unregulated areas of the financial services sector in a way that is tailored to the specific nature of the services they provide;
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 181 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6a. Observes that while investment firms are often portrayed as 'casino banks', it should be noted that they do play an important role in our economy by connecting investors, including pension funds to companies. Further, creating and trading financial assets, is important for allocating capital to people, entrepreneurs and businesses that are likely to be profitable and beneficial to society; these activities should not be prejudiced by structural reforms but unnecessary financial churning should be targeted;
Amendment 202 #
Motion for a resolution
Paragraph 7 a (new)
Paragraph 7 a (new)
7a. Notes that, some risks such as concentration risk, interest rate risk and operational risk are unlikely to be made 'safer' by structural reform and that many banking problems have in fact been concentrated on the retail side or result from sovereign bond capital holdings. In this respect urges the Commission to work closely with the Basel committee and swiftly implement any further recommendations from them in these areas;
Amendment 219 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Urges the Commission to come forward with a proposal for mandatory separation of banks' retail and investment activitiesGiven the proposals for structural separation already underway in several Member States, urges the Commission to come forward with a proposal to set down principles and options for structural reform of banks which safeguard the single market and free flow of capital and recognise the need for banks to perform and provide services to clients efficiently and remain globally competitive. Such proposals may include options for total separation of banks' retail and investment activities as well as methods of internal isolation or 'ring fencing';
Amendment 252 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Urges the Commission to come forward with a proposal for such mandatory separation through thepropose mechanisms for establishment ofing a thorough, transparent and credible ‘'ring fence’ around' separating bank activities that are vital for the real economy, such as those relating to credit functions, payment systems and deposits from some or all investment activities; 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 entity;
Amendment 273 #
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 services;, noting that bail-in arrangements must be clear for investors.
Amendment 279 #
Motion for a resolution
Paragraph 10 a (new)
Paragraph 10 a (new)
10a. Urges the commission to take into account efficiency as well as safety when proposing separation of bank activities given that costs will be passed on to consumers and customers and have an immediate cost to society whereas the effectiveness of structural separation is not proven, not least as failures in the crisis have predominantly been in retail operations, mainly mortgage related, or due to over-expansion in mergers; notes that total guarantees for the retail side of banking may in fact continue to encourage overly risky mortgage lending.
Amendment 286 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Urges the Commission to ensure that where banks undertake purely financial trading activities in derivatives, the risks and costs associated with those activities are borne by their trading arm and not by their ring-fenceddo not impact on the retail arm;
Amendment 312 #
Motion for a resolution
Paragraph 12 – point a
Paragraph 12 – point a
(a) separate legal entities, with separate sources of funding for the bank's retail and purely financial investment entities;
Amendment 336 #
Motion for a resolution
Paragraph 12 a (new)
Paragraph 12 a (new)
12a. Urges the commission to ensure that separation does not result in: (a) a fragmentation of the single market, in particular it should not entail disproportionate adverse effects on the whole or parts of the financial system in other Member States or of the EU as a whole forming or creating an obstacle to the functioning of the internal market or the free flow of capital; (b) excessive operational or infrastructure costs that would be passed onto the customer or consumer or pose an entry barrier to having a basic bank account; (c) becoming overly prescriptive;
Amendment 403 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Urges the Commission to ensure that separation delivers sufficiently independent decision- making and governance for each entity, with separate executive and non-executive board members and whereby neither side of the ring fence is owned by or reports to the other; nevertheless ring fencing must not create entities without sufficient understanding and expertise in all aspects of markets and transactions that reflect on their business;
Amendment 408 #
Motion for a resolution
Paragraph 20
Paragraph 20
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 463 #
Motion for a resolution
Paragraph 29
Paragraph 29
29. Urges the Commission and the Member States to work together to promote greater diversification of the EU's banking sector by encouraging and facilitating more consumer- oriented banking, for example through cooperative, building society, peer- to- peer lending, crowd funding and saving bank models, noting the different levels of risk the consumer is exposed to are transparently disclosed;
Amendment 467 #
Motion for a resolution
Paragraph 29 a (new)
Paragraph 29 a (new)
29a. Urges the Commission to find ways to encourage and promote 'relationship lending' or 'knowledge based lending' in legislative initiatives. These should aim to avoid a 'tick box' approach and focus instead on promoting vocational and ethical training for those who intermediate and lend to businesses;
Amendment 479 #
Motion for a resolution
Paragraph 31
Paragraph 31
31. Asks the Commission to bring forward measures to facilitate consumer switching between banks and assist in improving consumer choice in the banking sector by reducing the barriers to entry and exit, a transferable bank account number or customer 'LEI' and applying proportionate rules to new entrants to the market;