BETA

Preparatory phase in Parliament



2016/0360(COD) Capital Requirements Regulation: leverage ratio, net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements
RoleCommitteeRapporteurShadows
Lead ECON SIMON Peter (S&D) KARAS Othmar (EPP), FOX Ashley (ECR), VAN NIEUWENHUIZEN Cora (ALDE), VALLI Marco (EFD)
Opinion ITRE
Opinion JURI

Legal Basis TFEU 114

Activites

  • 2016/11/23 Legislative proposal published
    • COM(2016)0850 summary

Documents

History

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

procedure/Mandatory consultation of other institutions
Economic and Social Committee
committees/0/shadows/3
group
EFD
name
VALLI Marco
committees/0/date
2016-11-24T00:00:00
committees/0/rapporteur
  • group: S&D name: SIMON Peter
committees/0/shadows/2
group
ALDE
name
VAN NIEUWENHUIZEN Cora
activities/0/docs/0/celexid
CELEX:52016PC0850:EN
activities/0/docs/0/text
  • PURPOSE: to reduce financial institutions’ leverage, and strengthen their stable funding and trading book capital requirements.

    PROPOSED ACT: Regulation of the European Parliament and of the Council.

    ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with Council.

    BACKGROUND: in the aftermath of the financial crisis that unfolded in 2007-2008, the Union implemented a substantial reform of the financial services regulatory framework to enhance the resilience of its financial institutions. That reform was largely based on internationally agreed standards. Among its many measures, the reform package included the adoption of Regulation (EU) No 575/2013 (the Capital Requirements Regulation or CRR) and Directive 2013/36/EU (the Capital Requirements Directive) of the European Parliament and of the Council, which strengthened the prudential requirements for credit institutions and investment firms.

    While the reform has rendered the financial system more stable and resilient against many types of possible future shocks and crises, it did not address all identified problems.

    In its Communication of 24 November 2015, the Commission recognised the need for further risk reduction and committed bringing forward a legislative proposal that would build on internationally agreed standards.

    IMPACT ASSESSMENT: the Regulatory Scrutiny Board issued a positive opinion in September 2016 on a resubmitted impact assessment, following a negative opinion. The modelling has shown that public resources required to support the banking system in case of a financial crisis of the size similar to 2007 – 2008 would decrease by 32% – a decline from EUR 51 billion to EUR 34 billion.

    CONTENT: the proposal makes amendments to the Capital Requirements Regulation in order to complete the reform agenda by tackling remaining weaknesses and implementing some outstanding elements of the reform that are essential to ensure the institutions' resilience but have only recently been finalised by the Basel Committee on Banking Supervision and the Financial Stability Board (FSB).

    These amendments relate to:

    • a binding leverage ratio which will prevent institutions from excessively increasing leverage, e.g. to compensate for low profitability;
    • a binding net stable funding ratio (NSFR) which will build on institutions’ improved
    • funding profiles and establishing a harmonised standard for how much stable, long-term sources of funding an institution needs to weather periods of market and funding stress;
    • more risk sensitive own funds (i.e. capital) requirements for institutions that trade to an important extent in securities and derivatives which will prevent too much divergence in those requirements that is not based on the institutions' risk profiles;
    • new standards on the total loss-absorbing capacity (TLAC) of global systemically important institutions (G-SIIs) which will require those institutions to have more loss-absorbing and recapitalisation capacity, tackle interconnections in the global financial markets and further strengthen the EU’s ability to resolve failing G-SIIs while minimising risks for taxpayers.

    The proposed amendment to Regulation (EU) No 575/2013 (the Capital Requirements Regulation) is part of a legislative package that includes also amendments to Directive 2013/36/EU (the Capital Requirements Directive) and to Directive 2014/59/EU (the Bank Recovery and Resolution Directive) and to Regulation (EU) No 806/2014 (the Single Resolution Mechanism Regulation).

committees/0/shadows/0
group
EPP
name
KARAS Othmar
committees/0/shadows
  • group: ECR name: FOX Ashley
activities
  • date: 2016-11-23T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2016/0850/COM_COM(2016)0850(ANN)_EN.pdf type: Legislative proposal published title: COM(2016)0850 type: Legislative proposal published body: EC commission:
committees
  • body: EP responsible: True committee_full: Economic and Monetary Affairs committee: ECON
  • body: EP responsible: False committee_full: Industry, Research and Energy committee: ITRE
  • body: EP responsible: False committee_full: Legal Affairs committee: JURI
links
other
    procedure
    reference
    2016/0360(COD)
    instrument
    Directive
    legal_basis
    Treaty on the Functioning of the EU TFEU 114
    stage_reached
    Preparatory phase in Parliament
    summary
    subtype
    Legislation
    title
    Capital Requirements Regulation: leverage ratio, net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements
    type
    COD - Ordinary legislative procedure (ex-codecision procedure)
    subject