Abänderungsantrag AFPA/Fecif im ECON Ausschuss

Veröffentlicht am Donnerstag, 26. Januar 2012, 07:47

Am 24. Jänner behandelte der ECON Ausschuss den Abänderungsantrag, der von AFPA und FECIF eingebracht und an den Rapporteur der Richtlinie, Mag. Othmar Karas weiter geleitet wurde. Die wichtigsten Aussagen können AFPA Mitglieder hier nachlesen:

Executive Summary

On January 24th the ECON Committee held a consideration of its draft reports on CRD IV.

Please find below a summary of the debate. Due to a lack of time, the debate was ended early upon the provision that additional time will be found in a future committee meeting to further discuss the draft reports.

Analysis

Othmar Karas (EPP, AT) began by saying that in October 2010 the Parliament published an own initiative report on Basel and the upcoming commission proposal. The commission proposal takes several steps in the direction of the parliament and yesterday, the Danish presidency welcomed the commission proposal as a sound basis. He shares the objectives of the Basel committee and the G20. As intra-European economic structural measures and economic financing measures are introduced, this has to be done in the wider framework. Since the adoption of the own initiative report, there have been important developments. The heads of state agreement on 9 percent recapitalisation is an important decision as the stress tested banks need to reach this target by June 30th. This 9 percent is on the basis of a different interpretation of capital requirements than Basel. On top of this, individual member states such as Sweden and Austria are bringing forward Basel III by 2013. The USA is going in the opposite direction by not implementing Basel II or CRD III. This backdrop has led to different definitions of capital requirements and the parliament must work to dove-tail these definitions or there is a risk that there will be a build-up of obligations that will have an impact on the financing of growth and investment. The parliament must be part of the political debate.

As such, his repost calls upon the commission to clear up certain issues as regards to the 9 percent decision, the situation in the USA and so-on. Uncoordinated efforts by the member states could lead to effects on the member states in the shadow banking sector. There would be distortion and legal uncertainty and he thus calls for maximum harmonisation. He then said that in reality, there is an unprecedented level of short-term deposits in the central banks, the banks are not lending to each other and there is a desperate need for money to be put into the real economy as opposed to being stored in the ECB vaults.

He explained that the report should set out a clear direction for future decision making. He said that he looks forward to the council common position in March. He also called for the EBA to be included in the decision process as soon as possible so that they can begin work on standards as soon as possible. The major shift from the commission proposal follows on from the 9 percent aim and he said that the increase in the capital requirement should be as quick as possible. The commission is looking at 3.4 and 4.5 percent as a capital buffer by 2012/2014. He wants 4.5 percent by January 1st 2013. This would set a strict robust figure as early as possible, which would get rid of different demands placed upon the banks.

He then noted that the differing value ratios need to be looked at. He wants to know what the 0 percent weighting actually means. The risk weighting for SMEs needs to be reduced and there should be no exemption for sovereign debt. Concerning the liquidity requirements, he said that he supports the thrust of the commission proposal, but at present, there is an inadequate definition of the assessment of liquidity. How is gold judged for example? He would thus like to create a parallel with Basel and binding liquidity ratios by 2015.

As regards to the leverage ratio, he said that there should be no early publication, but the existing commission wording has a number of shortcomings. The different international codes resulting from different accounting standards could be resolved. There must be the same codes.

Regarding the EBA, there are 170 cross-references and he would like to reduce these. He would delete 10, defer 17 and prioritise 3 cross-references. There would be around 40 items in the proposal in which they proceed in a different way.

He then raised a series of other issues:

  • He would like to introduce some minor adjustments to the rules on corporate governance
  • Counter-cyclical buffer – there needs to be a common basis for the establishment of the buffer and the ESRB should create this.
  • The report calls upon the commission to look at which parts of CRD IV cannot be implemented if the USA does not proceed simultaneously as there is a danger of distortion. He argued that differences with the USA cannot be used as an excuse for non –action, but the committee needs to be aware of where there could be issues.
  • Evaluating the effects of the new rules on company financing – this should be produced as quickly as possible, as there needs to be sufficient room for manoeuvre.

Udo Bullmann (S&D, DE) agreed that in times of crisis, it is essential to act. This proposal is a major opportunity to restructure the banking system and the parliament must be ambitious. He explained that it is essential to reduce the risks in the system and build up its capacity to deal with risk. The tax payer cannot be forced to pay again in the future. There needs to be special attention to SMEs as they create jobs and growth. SMEs must remain able to invest. The risk structure and liquidity issues cannot be resolved only with liquidity ratios. More attention should be paid to longer-term liquidity structures. He noted that short-term money management creates risk and thus called for a more long-term view to be taken.

As regards to how sovereign debt is dealt with, he agreed that the commission should produce a proposal. There is clearly a risk created by sovereign debt and it is thus important to look at how references to the credit rating agencies can be removed. The banking system should be forced to create internal reliable ratings. He then said that the question of competition between the Basel III system and the goals set by the EBA needs to be dealt with. There needs to be consistency in the EU approach as the banking sector needs to know what it needs to do. He asked how this can be achieved. There needs to be clarity on what the long-term demands will be for tier 1 capital. Concerning corporate governance, he asked if there remain open questions on managers‘ behaviour. He would like to look at whether the parliament should add an extra package of corporate governance rules on the behaviour of managers.

Sharon Bowles (ALDE, UK) then said that she welcomed a focus on the weighting of sovereign debt. She argued that there should be a possibility of intervention if a bank holds a disproportionate level of sovereign debt from another member state. Whatever rules are introduced on sovereign EU debt should be consistent with the sovereign debt of third countries. She then welcomed the trade finance amendments as the search for growth and investment is now paramount. The new recital also adds clarity on what is meant by trade finance. There should not be higher capital for trade finance and SME funding as this is so important given the current state of the EU economy. She also welcomed the wording on proportionality as this takes into account the specificities of the EU banking sector. There can be no-one size fits all models due to the differences in the EU banking sector. She would thus like to look at the possibility of layering. For systemic banks, she said that the Basel rules should be applied as closely as possible. For smaller banks, deviation from Basel would be possible. There are thus clearly limits to the level of maximum harmonisation possible.

Concerning the situation of the USA, she said that there needs to be a way to handle this, although it should not be included in actual legislation. She then noted that the single set of rules should be applied proportionally, that is to say to all comparable markets. The EBA and ESRB could be used to monitor and arbitrate in this respect. She would thus agree to the extension of the EBA binding mediation powers.

She then agreed that other macro-prudential rules can be used to capture other systemic risks. She thus called upon the ESRB to be given a greater role in the legislative text in this respect. It is clear that every potential asset bubble can not be captured. This is why the ESRB can play a greater role. This would not be harmonisation, but it would be harmonised in the sense that guidance would be coming from a European source.

She then said that more needs to be done to align it with EMIR although some steps have already been taken. Finally, she said that there needs to be more transparency. The banks need to be far more transparent and thus reveal any potential liability build-ups. The obligations of the banks need to be far clearer. There must be far more transparency in terms of claw back arrangements. If these are not registered, it should not be legally valid. This would help deal with shadow banking. She then said there should be disclosure of what capital is covering deposits.

Vicky Ford (ECR, UK) welcomed the focus on lending to the real economy and trade finance. She then said that the adjustment of article 129 may not be the best way to deal with SMEs. She noted that the issue of sovereign debt should be considered in the parliament. The risk weight on commercial property may be too low. By increasing the risk weights on other items, lending to the real economy may be encouraged.

She argued that the use of derivatives by corporates needs to be looked at. She then said that minority interests also need to be looked at.

She agreed that the urgency procedure grants too much power to the European commission. However, the deletion of the urgency procedure all together may go too far.

There are some problematic points:

  • Maximum harmonisation is not always the right way forward. Banking markets differ and the ability to manage these differences is a key macro-economic tool. She thus argued that the amendment to the counter-cyclical buffer is actually a watering down of the legislation. She stressed that member states must be able to go further.
  • Bank insurance – the offsetting of capital requirements by using the insurance tools must be looked at in further detail. It should either be abolished or there could be full disclosure.
  • Disclosure – need a commitment to the long-term funding ratio – it is essential to be able to see the risks involved in short-term recapitalisation
  • Should not remove the Basel I floor
  • Whilst the USA is important, other countries should also be looked at.
  • The wording of article 25 needs to be looked at.
  • When a loan ends up in default – there are differing rules in the EU, especially considering the mortgage rules. Moving this to a strict 90 days could have serious implications.
  • The securitisation retention could have a serious impact.
  • She argued that a return to internal ratings would not resolve the problem of over-reliance on CRAs– she would like to look at other methods.
  • Investors in covered bonds need to be able to understand just what they are holding. It is thus important to look at what level of disclosure could lead to this.

Philippe Lamberts (Greens/EFA, BE) then said that there needs to be a choice between a referral to CRAs and internal risk models. The only solution is a binding leverage ratio as this would really cap the risk taken. He then said that the Greens would like to split the banks up between „boring banking and casino banking“. He noted that deposits have increased in the last year and this should be encouraged.

The SIFIs must be covered. Too big to fail is too dangerous to exist. He stressed that the EU cannot wait before taking action on this. Concerning capital requirements, he said that it would be better to go higher. He also called for stronger provisions on liquidity risk and said that the rules should be binding. There should be an implementation timeframe, but the ratios must be binding. The crisis was a liquidity crisis and there remains far too much liquidity risk in the system.

He then called for more supervision of internal models. Concerning remuneration, he said that it is clear that there must be further rules. There has been a failure to understand that the days of excess bonuses are over. The differences between the member states must be considered, although any deviation from the rules must be justified and checked by the EBA.

He concluded by saying that the situation in the USA should not control what the EU does. He stressed that stricter rules can actually help the EU become more competitive as it will make the EU financial markets more resilient. This will actually attract capital by reassuring investors.

Corien Wortmann-Kool (EPP, NL) said that the draft report is excellent. There are four areas where further work is required:

  • There have been confusing signals from the council on whether the implementation of CRD IV is a priority. It is not clear how the demands on the stress-tested banks will be implemented. It is thus essential to give further certainty to the market. She argued that the implementation of CRD IV is more important than the introduction of a banking levy.
  • Maximum harmonisation – whilst this should be pursued as far as possible, it must remain possible for member states to go beyond the CRD IV criteria when needed. There should be clear criteria on where flexibility is allowed.
  • Liquidity – the definition of liquidity ratios and which type of assets is taken into account needs further examination. Every covered bond cannot be seen as a high quality asset and every security cannot be seen as a low quality asset. On top of this, the focus on certain types of assets could create the danger of bubbles.
  • Corporate governance and remuneration – it is important to look at how to ensure that remuneration policy is inline with the long-term sustainability of the financial institution. She would like to see more harmonisation on this.

Olle Ludvigsson (S&D, SE) said that the principle of maximum harmonisation runs counter to Basel II. It also runs counter to the financial markets of the member states where there are already capital requirements. He argued that maximum harmonisation would create instability.  He then noted the importance of banking supervision and argued that stress tests are insufficient. There needs to be far more transparency in terms of accounts. The authorities need to have the financial knowledge to do their regulatory job.

Pervenche Beres (S&D, FR) noted that the relationship with the USA is clearly an important matter of fundamental importance. The EU needs to consider the competitiveness of its banking sector compared with the rest of the world. Concerning the definition of liquidity, she asked if an examination of this would be done in this report.

As regards to the zero weight of sovereign debt, she said that zero risk does not in reality exist. On June 1 2012, the market value of sovereign debt will be produced. It is impossible to anticipate what will be viewed as a full market risk. She would like to see the assessment of sovereign debt dealt with in the same way as an assessment of the liquidity criteria. She then said that the separation of investment banks from deposit banks should be a cornerstone of the report.

She then stressed that there should be a removal of any reference to CRAs in the report as this would deny them the legitimacy of the legislators. Finally, she said that the issue of full harmonisation of the definition of capital requirements is a very complex issue, but the parliament should seek to go as far as possible.

Elisa Ferreira (S&D, PT) stressed that remuneration is clearly an issue. Sovereign debt also needs to be dealt with as does the liquidity issue. She then raised the case of how to deal with non-operational holding companies and the reduction of minority interests. It is important to reinforce the way in which holding companies with minority interests in the banking industry are dealt with. This must be addressed.

Additional information: Deadline for Amendments: 27 February 2012
Documentsources: Draft report / Draft report (Part I)