04 October 2011

ECON Committee debate on CRD IV

Shadow rapporteur Sharon Bowles (ALDE, UK) highlighted in her intervention the enormous divergences between the US and the EU in terms of Basel III implementation. The differences in accounting standards (IASB vs GAAP) makes banks’ balance sheets look different on both sides of the Atlantic, which further increases the divergences.

Bowles also mentioned that the zero risk-weight model needs to be reviewed because government bonds are no longer risk-free. She also stressed that the exemptions that the EP granted in EMIR should be respected in other pieces of financial services legislation. The EP should make sure that there is consistency for end-users between CRD IV and EMIR.

Shadow rapporteur Philippe Lamberts (Greens, BE) said that the transition period of CRD IV is very long (full implementation to be reached only on 1 January 2019). Citizens cannot afford to wait so long for a safer banking sector. In the short run, an increase in liquidity transparency is urgently needed.

MEP Arlene McCarthy (S&D, UK) said that CRD IV should take into consideration what the UK Vickers’ report has proposed. This is to have high capital requirement for retail banking in order to guarantee the deposits. It is also important to divide retail banking from investment banking in order to avoid bailing out the investment part of banks. 

Olle Schmidt (ALDE, SE) stressed that CRD IV should not force all Member States to have in place the same rules for capital requirements. If a Member State (such as the UK) wants to introduce stricter capital rules, the EC should allow it.

Many ECON members agreed on the need to regulate shadow banking.

MEP Karas announced the following schedule:

• Hearing in October 2011
• Deadline for amendments: 27 February 2012
• Discussion of report/amendments in ECON: March 2012
• Vote in ECON: April 2012

The final vote in plenary would depend on a possible agreement with the Council.

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