The Commission's proposals for the revision of the rules of operation of banks in the European Union were adopted by the College of Commissioners at its weekly meeting on Wednesday morning. The proposals cover the Capital Requirements Regulation and the Capital Requirements Directive.
The proposals were presented immediately after the press conference by the Executive Vice President (responsible for economic and social rights, among others) Valdis Dobrovskis and the Commissioner for Financial Services Mareed Magines.
The two Commissioners stressed that the new package is the last step in the implementation of the Basel III agreement between the EU and its G20 partners, which was aimed at ensuring the resilience of banks to possible financial shocks.
According to the announcement, the new regulations will also contribute to Europe's efforts to recover from the economic effects of the COVID-19 pandemic and to a transition to a climate-neutral economy.
In particular, the Commission proposals include legislative proposals to amend both the Directive and the Capital Requirements Regulation (Directive 2013/36 / EU and Regulation 2013/575 / EU), as well as a separate legislative proposal to amend the Regulation on capital requirements. capital requirements in the field of consolidation (the so-called “chain structures proposal”).
More specifically, the package focuses on strengthening resilience to economic shocks, sustainability and contributing to the green transition, as well as stronger supervision of EU banks.
– With regard to the implementation of the Basel III Agreement, the package “aims to ensure that the 'internal models' used by banks to calculate their capital requirements do not underestimate the risks, thus ensuring that the capital required for the adequate coverage of these risks “, thus aiming to help restore confidence and the strength of the sector.
– In terms of sustainability, the package obliges banks to systematically report and manage environmental, social and governance (GIS) risks in the context of risk management. Under this obligation, banks and supervisors should, among other things, conduct extreme weather simulation exercises on a regular basis. The disclosure rules will be adjusted to the size of the bank so that the smaller banks are not overburdened.
– In terms of supervision, supervisors will have better tools for supervising financial technology groups (fintech), including bank subsidiaries, which is necessary after the Wirecard scandal. The proposal also harmonizes EU rules on third-party bank branches in European Union countries.
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