The Committee
on Economic and Monetary Affairs adopted the own-initiative report drafted by
Elisa FERREIRA (S&D, PT), based on Article 42 of the Rules of Procedure,
with recommendations to the Commission on Cross-Border Crisis Management in
the Banking Sector.
The report
notes that there is at present insufficient international regulation of
crisis management in the banking sector and that existing EU and
international supervisory mechanisms for the financial sector have proven
ineffective in preventing or sufficiently containing contagion.
Members call
on the Commission to submit to Parliament by 31 December 2010, on the
basis of Articles 50 and 114 of the TFEU, one or more legislative proposals
relating to an EU crisis-management framework, an EU financial stability
fund, and a resolution unit following the detailed recommendations
made in the Annex hereto, taking into account initiatives taken by
international bodies, such as the G-20 and the International Monetary Fund,
in order to ensure a global level playing field and based on a profound
analysis of all alternatives available, including an impact assessment.
Recommendation
1 relating to a common EU crisis-management framework:
- create a
European crisis-management framework with a common minimum set of rules
and ultimately a common resolution and insolvency law, applicable to all
banking institutions operating in the Union;
- progressively
converge existing national resolution and insolvency laws and
supervisory powers and, within a reasonable calendar, establishing an
effective single EU regime;
- establish a
single EU resolution authority as a separated body or as a unit within
the EBA;
- carry out
peer reviews of supervisors on a regular basis under the leadership of
the EBA building on prior self-assessment;
- where the
need for a resolution or the winding-up of a cross-border institution
arises, carry out an in-depth investigation (via independent experts
appointed by the EBA) in order to highlight the causes and
responsibilities involved;
- attribute to
the relevant supervisor the responsibility for crisis management
(including powers of early intervention) and the approval of each bank’s
contingency plan;
- design a
common set of rules for crisis management including common
methodologies, definitions and terminology, and a set of relevant
criteria for stress test for cross-border banks;
- ensure that
resolution plans become a mandatory regulatory requirement. They should
include an in-depth self-assessment of the institution and details of a
fair distribution of assets and capital;
- design,
before December 2011, a European supervisory rating for banks (Risk
Dashboard) based on a common set of quantitative and qualitative
indicators;
- empower
supervisors to intervene on the basis of thresholds of the supervisory
rating, in full accordance with the principle of proportionality, and
provide for reasonable remedy periods for the institutions to address
the weaknesses by themselves;
- provide
supervisors with appropriate legal tools for intervention by amending
the relevant sectoral legislation or by introducing new sectoral
legislation to require adjustments of capital (above the minimum
regulatory requirements) or liquidity and changes in the business mix
and internal process; recommend or impose changes of management; impose
dividend retention and restrictions in order to consolidate capital
requirements; limit the terms of banking licences, etc.
Recommendation
2 relating to cross-border systemic banks:
- cross-border
systemic banks, due to their special role in the internal market of
financial services, need to be addressed urgently by way of a new
special regime to be known as European Bank Company Law, to be designed
by the end of 2011;
- cross-border
systemic banks shall adhere to the new reinforced special regime; that
regime shall overcome legal impediments to effective action across
borders while ensuring the clear, equal and predictable treatment of
shareholders, depositors, creditors, employees and other stakeholders,
in particular after intra-group asset transfers;
- the
Commission shall adopt a measure setting up, before April 2011, criteria
for definition of cross-border systemic banks;
- the
Commission shall adopt a measure proposing a mechanism of asset
transfers within Cross-Border Systemic Banks taking due regard of the
need to protect the rights of host countries;
- an EU
financial stability fund and a resolution unit shall support
interventions led by the EBA relating to crisis management, resolution
or insolvency, as regards cross-border systemic banks.
Recommendation
3 relating to an EU financial stability fund:
- an EU
Financial Stability Fund shall be created, under the responsibility of
the EBA, to finance interventions (rehabilitation or orderly winding-up)
aimed at preserving the system’s stability and limiting contagion from
failing banks. The Commission shall present to Parliament, by April
2011, a proposal with details of the Fund’s charter, structure,
governance, size, operating model as well as a precise calendar for
implementation.
Recommendation
4 relating to a resolution unit:
- an
independent resolution unit shall be established within the EBA to lead
the resolution and insolvency procedures for cross-border systemic
banks.