MEPs have made their first annual banking union resolution.  They are pleased with the single supervisory mechanism although there is a need to better coordinate between micro and macro-prudential policies. MEPs want greater supervisory scrutiny and better homogenisation of capital requirements-related practices and standards. The resolution calls on the Commission and ESAs to conduct an assessment of the effect of increasing capital requirements in current and future legislation on credit supply, especially to small and medium-sized companies. It goes on to criticise ECB’s supervisory board in relation to the maximum distributable amount and calls for the supervisors to consider the flexibility allowed by the legislation. MEPs support the changes in deposit protection, backed with the bank resolution regime, and say any changes to the medium term of the current regulatory framework must be carefully assessed so as not to reduce available funding for Member States or affect financial stability. They think the bail-in tool will introduce “a systemic mechanism of risk avoidance” but say the rules must apply proportionately. Finally, the resolution stresses the importance of being able to write off or sell on non-performing loans. (Source: EP’s first annual Banking Union resolution)