The European Parliament has published a press release which states that it has adopted a legislative report which amends the Capital Requirements Directive to improve the transparency and the supervision of the financial system to ensure proper risk management in the banking sector.
The major change after negotiations is the inclusion of a review clause. The press release states that European Parliament representatives agreed with the Commission’s proposal to ensure that an institution issuing an investment retains a material interest in the performance of the proposed investment. The retention rate is, as agreed between the negotiating delegations, at least 5% of the total value of the securitised exposures. The European Parliament delegation also obtained a strong review clause asking the Commission to come up with a possible proposal to increase the retention rate, by 31 December 2009, after consulting the Committee of European Banking Supervisors and taking into account international developments.
View New rules to avoid future financial crisis - Capital Requirements Directive, 6 May 2009
