The Commission will tighten up the way in which banks assess the risks connected with their trading book; impose higher capital requirements for re-securitisations; increase disclosure requirements; and have sound remuneration practices.
The Commission has put forward a further revision of EU rules on capital requirements for banks that is designed to tighten up the way in which banks assess the risks connected with their trading book; impose higher capital requirements for re-securitisations; increase market confidence through stronger disclosure requirements for securitisation exposures; and require banks to have sound remuneration practices that do not encourage or reward excessive risk-taking.
The proposal, which amends the existing Capital Requirements Directives, represents part of the EU's response to the financial crisis, and reflects consultation with Member States, banking supervisors and industry. It now passes to the European Parliament and the Council of Ministers for consideration.
"These new rules target some of the investments and practices that lie at the root of the financial crisis. New rules on re-securitisations will require banks to hold significantly more capital to cover their risks when investing in these products, while the additional disclosure rules will help to create a climate of market confidence.", McCreevy stated.
© European Commission
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