[ParlTrack]

Proposal for a regulation
Recital 8

(8) Evidence emerged in the context of the COVID-19 pandemic has made apparent that the possibility to temporarily exclude certain central bank exposures from the calculation of an institution’s total exposure measure, as laid down in Article 429a of Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876, could prove essential during a crisis situation. However, the effectiveness of this measure appears to be hampered by the reduced flexibility stemming from the offsetting mechanism attached to such temporary exclusions that would constrain the ability of institutions to increase central bank exposures in a crisis situation. This could ultimately result in forcing the institution to reduce the level of lending to households and businesses. In order to avoid any undesired consequences related to the offsetting mechanism and to ensure the effectiveness of that exclusion in the face of possible future shocks and crises, the offsetting mechanism should be modified before the leverage ratio requirement set out in point (d) of Article 92(1) of Regulation (EU) No 575/2013 becomes applicable in accordance with Union law on 28 June 2021. Pending the application of the amended provisions on the calculation of the leverage ratio as introduced by Regulation (EU) 2019/876, Article 429a should continue to apply as introduced by the Commission Delegated Regulation (EU) 2015/6218 . __________________ 18Commission Delegated Regulation (EU) 2015/62 of 10 October 2014 amending Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to the leverage ratio, OJ L 11, 17.1.2015, p.37-43deleted

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Recital 11

(11) To mitigate the potential impact that a sudden increase in expected credit loss provisions may have on institutions’ capacity to lend to clients at times when it is most needed, the transitional arrangements should be extended by two years and institutions should be allowed to fupartially add-back to their Common Equity Tier 1 capital any increase in new expected credit loss provisions that they recognise in 2020 and 2021 for their financial assets, which are not credit-impaired. This would bring additional relief to the impact of the COVID-19 crisis on institutions’ possible rise in provisioning needs under IFRS 9 while maintaining the transitional arrangements for the expected credit loss amounts established before the pandemic of COVID-19.

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Recital 14

(14) Given the specific guarantees attached to loans granted by credit institutions to pensioners or employees with a permanent contract against the unconditional transfer of part of the borrower’s pension or salary to that credit institution, Article 123 of Regulation (EU) No 575/2013 was amended by Regulation (EU) 2019/876 to allow for a more favourable treatment of such loans. The application of this treatment in the context of the COVID-19 pandemic would incentivise institutions to increase lending to employees and pensioners. It is therefore necessary to advance the date of application of that provision so that it can be used by institutions already during the COVID-19 pandemic.deleted

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Recital 15

(15) The provisions on the adjustment of risk-weighted non-defaulted SME exposures set out in Article 501 of Regulation (EU) No 575/2013 (the SME supporting factor) have been amended by Regulation (EU) 2019/876. That Regulation also introduced in Article 501a of Regulation (EU) No 575/2013 a new adjustment to own funds requirements for credit risk for exposures to entities that operate or finance physical structures or facilities, systems and networks that provide or support essential public services (the infrastructure supporting factors). As those supporting factors allow a more favourable treatment of certain exposures to SMEs and infrastructure, their application in the context of the COVID-19 pandemic would incentivise institutions to increase much needed lending to those entities. It is therefore necessary to advance the date of application of the two supporting factors so that they can be used by institutions already during the COVID-19 pandemic.deleted

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Recital 16

(16) The prudential treatment of certain software assets has been amended by Regulation (EU) 2019/876 in order to further support the transition towards a more digitalised banking sector. In the context of the accelerated up-take of digital services as a consequences of public measures adopted to address the COVID-19 pandemic, the application of these changes should be anticipated.deleted

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Recital 18

(18) For the extraordinary support measures adopted to alleviate the impact of the COVID-19 pandemic to be fully effective with regard to keeping the banking sector more resilient and providing an incentive to the institutions to continue lending, it is necessary for the alleviating effect of those measures to be immediately reflected in the way in which regulatory capital requirements are determined. The impact of such relief measures should be taken explicitly into account in the context of the supervisory review and evaluation process referred to in Article 97 of Directive 2013/36/EU. Moreover, in order to implement capital conservation measures, competent authorities should be empowered to apply temporary suspensions of variable remunerations, discretionary pension benefits, share buy- backs operations and distributions or interest payments by credit institution to shareholders, members or holders of Additional Tier 1 instruments where the prohibition does not constitute an event of default of the institution and when the Commission determines in an implementing act that the single market experiences a serious economic disturbance. In such circumstances, competent authorities should require credit institutions to present an action plan within three months specifying internal measures to restore the soundness of an institution. The action plan should provide a roadmap and a strategy to restore compliance with supervisory requirements pursuant to Directive 2013/36/EU and to Regulation (EU) No 575/2013 and define a deadline for its implementation. Competent authorities should review and approve such action plans. Having regard to the urgency of those adjustments to the prudential framework, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union.

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 1 – paragraph 1 – point -1 (new)

Regulation (EU) No 575/2013
Article 2 – paragraphs 1a to 1e (new)

(-1) Article 2 is amended as follows: (a) The following paragraphs 1a to 1e are inserted: 1a. Without prejudice to the powers and procedures set out in Directive 2013/36/EU, competent authorities shall have the powers to temporarily suspend variable remunerations or discretionary pension benefits, shares buy-back operations and distributions or interest payments by all credit institution to shareholders, members or holders of Additional Tier 1 instruments where the prohibition does not constitute an event of default of the institution. 1b. If an institution meets the combined buffer requirement, it shall not be subject to the suspensions referred to in paragraph 1a to the extent that Common Equity Tier 1 capital is not reduced to a level where the combined buffer requirement is no longer met. 1c. Such temporary suspension powers shall be imposed on credit institutions whenever the Commission determines by means of an implementing act that the single market is experiencing a serious economic disturbance. The Commission shall also determine that the single market is experiencing a serious economic disturbance whenever the Council has adopted a Decision determining the existence of an emergency situation that may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole of the financial system in the Union pursuant to Article18 of Regulation (EU) No 1093/2010. The implementing act shall specify the length of such temporary suspensions that shall not exceed 12 months unless the serious economic disturbance lasts more than 12 months in which case the Commission shall extend the length of the temporary suspensions. 1d. The Commission shall act upon a formal opinion issued by the European Systemic Risk Board and indicating that the Union’s financial markets are facing a systemic risk that warrants the extraordinary measures of this Article. The Commission shall inform the European Parliament and the Council ahead of adopting the implementing act referred to in paragraph 1b. Whenever the Commission determines that there is a serious economic disturbance in the single market, competent authorities shall require the credit institution to present an action plan within three months specifying internal measures and triggers to restore the soundness the soundness of an institution in accordance with the provisions of Article104 of Directive 2013/36/EU. The action plan shall also provide a roadmap and a strategy to restore compliance with supervisory requirements pursuant to Directive 2013/36/EU and to this Regulation and define a deadline for its implementation. Competent authorities shall review and approve such actions plans. 1e. The power to adopt an implementing act referred to in paragraph 1c is conferred on the Commission acting in accordance with the procedure referred to in Article 464(2).

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 1 – paragraph 1 – point 1

Regulation (EU) No 575/2013
Article 429a

(1) Article 429a, as amended by Regulation (EU) 2019/876, is amended as follows: (a) in paragraph 1, the introductory phrase of point (n) is replaced by the following: ‘ (n) the following exposures to the institution's central bank, subject to the conditions set out in paragraphs 5 and 6:; ’ (b) in paragraph 7, the definitions of ‘EMLR’ and ‘CB’ are replaced by the following: ‘EMLR = the institution's total exposure measure as defined in Article 429(4), including the exposures excluded in accordance with point (n) of paragraph 1 of this Article, on the day of the public declaration referred to in point (a) of paragraph 5 of this Article; and CB = the total value of the institution’s exposures to its central bank that are eligible to be excluded in accordance with point (n) of paragraph 1, on the day of the public declaration referred to in point (a) of paragraph 5.; ’deleted

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 1 – paragraph 1 – point 2 – point e

Regulation (EU) No 575/2013
Article 473a – paragraph 6a – point a

(a) 10,9 during the period from 1 January 2020 to 31 December 2020;

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 1 – paragraph 1 – point 2 – point e

Regulation (EU) No 575/2013
Article 473a – paragraph 6a – point b

(b) 10,9 during the period from 1 January 2021 to 31 December 2021;

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 1 – paragraph 1 – point 2 – point h a (new)

Regulation (EU) No 575/2013
Article 473a – paragraph 9 a (new)

(ha) the following paragraph is added: “9a. The Commission shall issue within 24 months following the adoption of this Regulation a report assessing comprehensively the provisions of Article 473a and put forward, as appropriate, legislative proposals in order to establish a transparent and counter-cyclical framework for the recognition of expected credit losses.”

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 1 – paragraph 1 – point 3

Regulation (EU) No 575/2013
Article 500a

(3) the following article is inserted: ‘Article 500a Temporary treatment of public guarantees related to the COVID-19 pandemic By way of derogation from Article 47c(3), until [date of entry into force of this amending Regulation + 7 years] the factors set out in Article 47c(4) shall also apply to the part of the non-performing exposure guaranteed by an eligible provider referred to in points (a) to (e) of Article 201(1), where, subject to compliance with Union State aid rules, where applicable, the guarantee or counter-guarantee is provided as part of support measures to assist borrowers amid the COVID-19 pandemic. ’deleted

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 2 – paragraph 1 – point 1

Regulation (EU) 2019/876
Article 3 – paragraph 3a

(1) the following paragraph 3a is inserted: ‘3a. The following points of Article 1 of this Regulation shall apply from [date of entry into force of this amending Regulation]: (a) provisions on the treatment of certain loans granted by credit institutions to pensioners or employees laid down in Article 123 of Regulation (EU) No 575/2013; (b) provisions on adjustment of risk-weighted non-defaulted SME exposures laid down in Article 501 of Regulation (EU) No 575/2013; (c) adjustment to own funds requirements for credit risk for exposures to entities that operate or finance physical structures or facilities, systems and networks that provide or support essential public services laid down in Article 501a of Regulation (EU) No 575/2013 .; ’deleted point (59), as regards the point (133), as regards the point (134), as regards the

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 2 – paragraph 1 – point 3

Regulation (EU) 2019/876
Article 3 – paragraph 7

~~(3) paragraph 7 is replaced by the following: ‘7. Regulation, as regards p~~deleted Point (b18) of Article 36(1) of Regulation (EU) No 575/2013, containing the provision on the exemption from deductions of prudently valued software assets, shall apply from the date of entry into force of the regulatory technical standards referred to in Article 36(4) of Regulation (EU) No 575/2013. ’1 of this

2020/05/27
Committee: ECON

Sven GIEGOLD

Proposal for a regulation
Article 3 – paragraph 3

3. Point (1) of Article 1 of this Regulation, as regards the changes to Article 429a of Regulation (EU) No 575/2013, as amended by Regulation (EU) 2019/876, in relation to the offsetting mechanism attached to a temporary exclusion of certain central bank reserves, shall apply from 28 June 2021.deleted

2020/05/27
Committee: ECON

Activities of Sven GIEGOLD related to 2020/0066(COD)

Shadow reports (1)

Amendments (15)

ParlTrack - 2011-2024