Activites

• 2006/06/30 Final act published in Official Journal
  • Directive 2006/48
  • OJ L 177 30.06.2006, p. 0001-0200
• 2006/06/14 Final act signed
• 2006/06/14 End of procedure in Parliament
• #2734
• 2006/06/07 Council Meeting
• 2006/06/07 Act adopted by Council after Parliament's 1st reading
• #2682
• 2005/10/11 Council Meeting
• 2005/09/28 Results of vote in Parliament
  • Results of vote in Parliament
  • T6-0351/2005 summary

    The European Parliament adopted a resolution drafted by Alexander RADWAN (EPP-ED,DE) and made many amendments to the Commission’s proposal. (Please see the document dated 13/07/2005.) On the matter of comitology, Parliament pointed out in a recital to the Directive that it had previously requested that Parliament and Council should have an equal role in supervising the way in which the Commission exercises its executive role in order to reflect the legislative powers of Parliament under Article 251 EC. Parliament did not consider this proposal to preserve its legislative prerogatives. In the view of the European Parliament, Parliament and Council should have the opportunity of evaluating the conferral of implementing powers to the Commission within a determined period. Parliament felt it appropriate to limit the period during which the Commission may adopt implementing measures. Accordingly, a new clause states that, without prejudice to the implementing measures already adopted, upon expiry of a two year period following the adoption of the Directive and, on 1 April 2008 at the latest, the application of its provisions requiring the adoption of technical rules, amendments and decisions shall be suspended. Acting on a proposal from the Commission, the European Parliament and the Council may renew the provisions concerned in accordance with the procedure laid down in Article 251 of the Treaty and, to that end, they will review them prior to the expiry of the period or date referred to above.

• 2005/09/26 Debate in Parliament
  • Debate in Parliament
• 2005/08/29 Committee report tabled for plenary, 1st reading/single reading
  • A6-0257/2005
• 2005/07/13 Vote in committee, 1st reading/single reading
• 2005/04/14 Committee referral announced in Parliament, 1st reading/single reading
• #2628
• 2004/12/07 Council Meeting
  • 2628
• 2004/07/14 Legislative proposal published
  • COM(2004)0486 summary

    PURPOSE : to recast Directive 2000/12/EC and lay down rules on the business of credit institutions and their prudential supervision.LEGISLATIVE ACT : Directive of the European Parliament and of the Council.CONTENT : The Basel Accord in 1988 (Basel I) led to the adoption of minimum capital requirements across over 100 countries. The EU adopted, inter alia, Directive 2000/12/EC which addressed credit institutions' risks arising from credit-granting activities. Directive 93/6/EEC on the capital adequacy of investment firms and credit institutions extended both the credit risk and market risk rules to investment firms. The existing rules have made a significant contribution to the single market and high prudential standards. However, various important shortcomings have been identified. These include the following:- crude estimates of credit risks result in an extremely crude measure of risk and is in danger of falling into disrepute;- scope for capital arbitrage: innovations in markets have enabled financial institutions to effectively arbitrage the mismatch between institutions' own allocation of capital to risks and minimum capital requirements;- lack of recognition of effective risk mitigation: the present Directives do not provide appropriate levels of recognition for risk mitigation techniques.- incompleteness of the risks covered under the existing directives, including operational risk, which are not subject to any capital charges.There is strong consensus that the present situation is unsustainable. Capital requirements and risks would continue to be misaligned resulting in limited effectiveness of the prudential rules and increased risks to consumers and financial stability. The new proposal aims to ensure that financial institutions' capital is more closely aligned with the risks they face and sets out new rules on capital requirements. The framework consists of three different approaches allowing financial institutions to choose the approach most suited to them: simple, intermediate and advanced. The simple and intermediate approaches would be available by end 2006 (but banks could still opt to apply the current rules until end 2007) and the most advanced approaches from end 2007. In addition, specifically designed rules on capital requirements for financing small- and medium-sized enterprises indicate lower capital requirements for lending to such institutions and preferential treatment for certain types of venture capital. The new framework also recognises the lower risks associated with retail lending to individuals – both for general purposes and for house purchasing – by introducing lower capital requirements for these types of lending.To reduce single market barriers arising from the responsibilities of separate national supervisory authorities, supervisors will be required to work more closely together, including in deciding on applications by financial institutions to use the more sophisticated methodologies. The Committee of European Banking Supervisors will have an important role in promoting consistency of approach between different supervisors.The new provisions replace the existing solvency ratio requirements for credit risk and introduce two methods to calculate risk weighted exposure amounts. The Standardised Approach is based on the existing framework, with risk weights determined by the allocation of assets and off-balance sheet items to a limited number of risk buckets. Risk sensitivity has been increased by the number of exposure classes and risk buckets. There are lower risk weights for non-mortgage retail items (75%) and residential mortgages (35%). A 150% risk weight for assets which are 90 days past due (100% for residential mortgages) is introduced. The use of credit rating agencies' ratings to assign risk weights where these are available is permitted. The Internal Ratings Based (IRB) approach permits credit institutions to use their own estimates of the risk parameters inherent in their different credit risk exposures. These parameters form the inputs into a prescribed calculation designed to provide soundness to a 99.9% confidence level.The ‘Foundation' Approach allows credit institutions to use their own estimates of probability of default, while using regulatory prescribed values for other risk components. Under the ‘Advanced' Approach, credit institutions may use their own estimates for losses given default and their exposure at default. Credit institutions are allowed to use pooled data in the estimation of risk parameter values. This allows smaller credit institutions to apply a more risk sensitive approach to calculating capital requirements.

  • DG [{'url': 'http://ec.europa.eu/dgs/economy_finance/index_en.htm', 'title': 'Economic and Financial Affairs'}],

Documents

• Legislative proposal published: COM(2004)0486
• Debate in Council: 2628
• Committee report tabled for plenary, 1st reading/single reading: A6-0257/2005
• Debate in Parliament: Debate in Parliament
• Results of vote in Parliament: Results of vote in Parliament
• Decision by Parliament, 1st reading/single reading: T6-0351/2005
• : Directive 2006/48
• : OJ L 177 30.06.2006, p. 0001-0200

History

(these mark the time of scraping, not the official date of the change)