Activities of Olle SCHMIDT related to 2013/2021(INI)
Plenary speeches (1)
Laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (debate)
Amendments (43)
Amendment 23 #
Motion for a resolution
Recital C
Recital C
C. whereas excessive risk-taking, excessive leverage, inadequate capital and liquidity requirements, inadequate governance, risk management and compliance and the excessive complexity of the overall banking system were at the root of the financial crisis;
Amendment 31 #
Motion for a resolution
Recital C a (new)
Recital C a (new)
Ca. whereas, as highlighted in the HLEG's analysis, no particular business model did particularly well or particularly poorly during the financial crisis;
Amendment 40 #
Motion for a resolution
Recital D
Recital D
D. whereas the current post-crisis weakness in the structure of EU banks demonstrates the need for reform in order to serve the wider needs of the economy; and to safeguard European taxpayers' money against the risks that arise from the sheer size of the EU banking sector as a whole in relation to the overall economy.
Amendment 43 #
Motion for a resolution
Recital D a (new)
Recital D a (new)
D a. Whereas a number of important EU initiatives have been taken to prevent a new banking crisis, increase protection of tax payers and retail clients and create robust and sustainable payment systems.
Amendment 70 #
Motion for a resolution
Recital G a (new)
Recital G a (new)
Ga. whereas more banks have had significant losses from the types of activities that are supposed to remain in the deposit bank, in particular real estate lending, than those caused by losses in trading related activities, let alone market making in fixed-income markets.
Amendment 72 #
Motion for a resolution
Recital G b (new)
Recital G b (new)
Amendment 73 #
Motion for a resolution
Recital G c (new)
Recital G c (new)
Gc. whereas there is little evidence to support that a mandatory separation into trading banks and deposit banks would have helped to prevent the financial crisis or even ease the consequences. Had the global banking system carried more capital, bigger liquidity buffers and longer term funding the crisis would have had less severe consequences.
Amendment 76 #
Motion for a resolution
Recital H
Recital H
H. whereas the Commission proposal should provide for a strong, stable and resilient banking sector with access to a variety of funding sources for the internal market while respecting the diversity of the Member States' banking sectors; and be based on a thorough impact assessment and cost benefit analysis.
Amendment 83 #
Motion for a resolution
Recital H a (new)
Recital H a (new)
Ha. whereas it is necessary that banks hold higher levels and better quality of capital; have greater liquidity buffers and longer-term funding.
Amendment 89 #
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 pre-defined bail-inable debt instruments and 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 depositors;
Amendment 109 #
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 initiating reforms, subject to a comprehensive impact assessment proving that such reforms are necessary taking into account the impact of the full implementation of the existing package of reforms to capital, liquidity, resolution and capital markets;
Amendment 114 #
Motion for a resolution
Paragraph 1 a (new)
Paragraph 1 a (new)
1a. Takes the view that mandatory separation could damage the market making function in fixed-income markets. This would have adverse effects on the real economy. In particular, it would increase the costs and risks borne by both sovereign borrowers, corporates and the functioning of the financial sector as a whole.
Amendment 116 #
Motion for a resolution
Paragraph 1 b (new)
Paragraph 1 b (new)
1b. Believes that higher capital and liquidity buffers in combination with robust recovery and resolution regimes and reduced interconnectivity are essential in order to create financial stability. The proposal from the HLEG in relation to mandatory separation of banking activities has to be carefully assessed and be regarded as a possible complement to enhanced capital and liquidity requirements and other reforms already agreed upon. The impact assessment has to assess whether structural reform is needed. A proposal from the Commission to require separation along the lines proposed by the HLEG should not be taken until other legislative reforms have taken full effect.
Amendment 123 #
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, European Markets Infrastructure Regulation, Markets in Financial Instruments Directive and shadow banking initiatives) in conjunction with the regulations on the European Supervisory Authorities and the European Systemic Risk Board are vital, further reform of the banking structure is essential, andmay only be required, where complementary to the other proposals;.
Amendment 139 #
Motion for a resolution
Paragraph 2 a (new)
Paragraph 2 a (new)
2a. Underlines the importance the funds for DGS and RRD measures stipulated in the Recovery and Resolution Directive and the Deposit Guarantee Schemes Directive will have for the financial stability;
Amendment 155 #
Motion for a resolution
Paragraph 3 a (new)
Paragraph 3 a (new)
3a. Requires that the Commission's impact assessment take account of all other regulatory proposals designed to mitigate the costs of future bank failure and promote financial stability, in particular CRD IV and the Recovery and Resolution directive;
Amendment 173 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Considers that the core principle of 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 structural 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; Recognises also that market making is an essential part of the infrastructure of fixed-income markets in EU-countries and that the importance of market making for fixed-income markets has been recognised by the European Parliament in the current review of MiFID/MiFIR.
Amendment 178 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Considers that the core principle of banking reform, if conducted, 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 structural 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 183 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6a. Recognises the importance of market making activities to the provision of credit and risk management services to the real economy, the value that universal banks can provide to their customers and the risks associated with structural measures;
Amendment 185 #
Motion for a resolution
Paragraph 6 b (new)
Paragraph 6 b (new)
6b. Considers that banking activities that are essential for the functioning of the EU capital markets, such as market making, certain hedging activities, certain types of forex and interest related derivatives transactions, must not be hampered by new reform initiatives, these activities should be analysed and addressed on the basis of their importance for the functioning of the capital markets and creating long term economic growth;
Amendment 193 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Considers that an effective banking system must deliver a change in banking culture in order to reduce complexity, enhance competition, limit interconnectedness between risky and commercessential activities, improve corporate governance, risk management and compliance, create incentives for banks to establish more transparent organisational structures, create a responsible remuneration system, allow effective bank resolution and recovery, reinforce bank capital and deliver credit to the real economy;
Amendment 204 #
Motion for a resolution
Paragraph 7 a (new)
Paragraph 7 a (new)
7a. Considers that the transmission funds efficiently from savers to investors is a key component of a well functioning economy and necessary for long term economic growth within the EU and that market making activities which service clients and provide liquidity are key contributors to this process.
Amendment 208 #
Motion for a resolution
Paragraph 7 b (new)
Paragraph 7 b (new)
7b. Urges the Commission to finalise its impact assessment and on the basis of it come forward with an appropriate follow up taking into account the aims, results and effects of the ongoing regulatory reform agenda.
Amendment 210 #
Motion for a resolution
Paragraph 7 c (new)
Paragraph 7 c (new)
7c. Urges the Commission to not prejudge the Basel Committee on Banking Supervision's ongoing review of the Trading Book;
Amendment 220 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Urges if the Commission to comes forward with a proposal for mandatoryappropriate separation of banks' retail and investment activities, should such an approach be justified by a balanced and comprehensive impact assessment which proves that the real economy, the fixed-income markets or EU competitiveness will not be disadvantaged. The form of appropriate separation, legal or otherwise, for various activities should depend on the determination of supervisory authorities based on the risks and costs involved;
Amendment 256 #
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, market making and risk management,; takes the view that in the event of a bank failure, the ring fence must ensure that the retail entity is able to continues its business unaffected bywithout significant operational problems, financial losses, or funding shortages or reputational damage resulting from the resolution or insolvency of the investment entity;
Amendment 268 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Urges the Commission to ensure that proprietary trading activities on own account that are not related to the facilitation of client orders or hedging of risks do not benefit from implicit public 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;
Amendment 281 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Urges the Commission to ensure that where banks undertake trading activities, the risks and costs associated with those activities are borne by their tradingsupervisors conduct an analysis of where banks undertake risky proprietary trading activities compared with market making which is a core activity of banks important to the financing of the economy, managing government debt and in particular the financing of corporations which need access to primary markets, the risks and costs associated with those risky proprietary trading activities properly capitalized and costs of losses arme and not by their ring-fencebsorbed first by shareholders and cretail arm; ditors.
Amendment 296 #
Motion for a resolution
Paragraph 12 – introductory part
Paragraph 12 – introductory part
12. Urges the Commission to ensure that separationin the event that the removal of impediments to resolution in accordance with Article 14 and 15 of the Recovery and Resolution Directive have been insufficient to achieve the objectives set out above, and where supervisors determine there are risky proprietary activities which are not a core activity for banks, separation of such activities results in:
Amendment 304 #
Motion for a resolution
Paragraph 12 – point a
Paragraph 12 – point a
(a) functionally separate legal entities, with separatdiverse sources of funding for the bank's retail and investment entities, physical and IT segregation and separate organisational and reporting lines with appropriate internal controls to prevent breaches;
Amendment 323 #
Motion for a resolution
Paragraph 12 – point c
Paragraph 12 – point c
(c) the application of adequate, thorough and separate capital, leverage and liquidity rules to each entity not subject to consolidated supervision, including separate balance sheets; or
Amendment 340 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Urges the Commission to take into account the ECB's proposal to establish clear and enforceable criteria for separation8 and to take in to account ECB's comment whereby it "sees merit in separating certain high risk activities of financial institutions that are not associated to the provision of client- related services" , its suggestion that such mandatory separation would require clear and enforceable criteria for separation and its recommendation to further analyse whether market-making activities should be allowed in the deposit taking entity;
Amendment 354 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Underlines the necessity of assessing the systemic risk presented by both the retail and investment entactivities, as well as by the group as a whole, with a view to the application of appropriate capital buffers and liquidity requiremenisk weights for each entactivity;
Amendment 361 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Urges the Commission to ensure that the retail entity has sufficient capital and liquid assets to enable it, in the event of the bank's failure, to maintain depositors' access to funds, to protect the essential services ofin the ring-fenced arm from the risk of disordcase of bank failure in accordance with the individual resolution plans drawn up in accordance to the Directive of Recoverly failureand Resolution and to prioritise paying out depositors in a timely fashion;
Amendment 373 #
Motion for a resolution
Paragraph 15 a (new)
Paragraph 15 a (new)
15a. Urges the Commission to ensure that any form of separation should only be required in such circumstances where it is demonstrable that increased capital requirements would be not be sufficient mitigate the identified risks;
Amendment 382 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Urges the Commission, within the bounds of CRD IV, to ensure that adequate differentiation exists in terms of capital, leverage and liquidity requirements between the investment and retail entities, with an emphasis on higher capital requirements for the investment entity;
Amendment 404 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Urges the Commission to ensure that separation delivers 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;
Amendment 411 #
Motion for a resolution
Paragraph 20
Paragraph 20
20. Calls on the Commission to include provisions establishing an obligation for all board members of the retail entity, both executive and non-executive, and all levels of management and risk-takers to originate from, and only have responsibility for, the retail entity and not the investment entity;
Amendment 426 #
Motion for a resolution
Paragraph 23
Paragraph 23
23. Urges the Commission to ensure that remuneration systems prioritise the use of instruments such as bonds subject to bail- in, and shares, rather than cash; Urges the Commission to ensure that remuneration systems are aligned with international principles and effectively incentivise the use of deferred instruments such as bonds subject to bail-in, rather than cash, and shares which are subject to clawback for top management, but for also for all levels in the institutions;
Amendment 451 #
Motion for a resolution
Subheading 4
Subheading 4
D. Enhancing competition and competitiveness
Amendment 458 #
Motion for a resolution
Paragraph 28
Paragraph 28
28. Stresses that effective competition and EU bank competitiveness is necessary in order to ensure a well- functioning and efficient banking sector which funds the real economy by reducing the cost of banking services;
Amendment 460 #
Motion for a resolution
Paragraph 28 a (new)
Paragraph 28 a (new)
28a. Urges the Commission to ensure that competition and an international level playing field is maintained and that any possible initiative does not lead to increased capital markets fragmentation within the EU or globally.
Amendment 482 #
Motion for a resolution
Paragraph 32
Paragraph 32
32. Calls on the Commission to bring forward the necessary structural reforms outlined in this report, 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;, protecting the interests of the real economy, in particular lending to SMEs, the fixed-income markets and the functioning of the internal market and promoting competitiveness.