The European Parliament has published a press release following the recent meeting of the Economic and Monetary Affairs Committee (the Committee) at which amendments to the Capital Requirements Directive (CRD) were approved. The amendments to the CRD include:

  • More transparency on large exposure. Here the Committee supports reinforcing the existing rules on the large exposure regime, including inter-bank trading. A bank would not be able to expose more than Euro 150 million or more than 25% of its own funds to a client or a group of clients, if the proposed legislation comes into force.
  • Supervisory colleges are only a temporary step towards an EU system. The Committee voted to establish colleges of supervisors to facilitate cooperation among national authorities dealing with cross-border financial institutions. The Committee believes this should only be a temporary step towards a more integrated system of supervision since national authorities may not be able to handle cross border crises.
  • Firms and banks to better understand risks. The Committee supports the Commission’s proposal to develop sound principles of liquidity risk management.
  • Securitisation: 5% of retention approved. The Committee 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 a general rule, at least 5% of the total value of the securitised exposures.
  • Credit Default Swaps: call for an EU clearing house. An amendment adopted by the Committee calls on the Commission to put forward, by the end of 2009, legislative proposals to regulate the credit default swap (CDS) market and set up a central counterpart (CCP) or clearing house, supervised by the EU, to reduce the risks of these instruments.

View New rules for banks to avoid a future financial crisis, 10 March 2009