CRD III rapporteur Arlene McCarthy (S&D/UK) said that the key objective is to avoid future crises in the financial sector and to ensure that banks are better capitalized so that tax payers will not need to bail them out.
At the ECON Committee meeting Arlene McCarthy (S&D/UK) presented the current situation with the proposal on capital requirement for the trading book and for re-securitisations, and the supervisory review of remuneration policies.
Arlene McCarthy (S&D/UK) said that the key objective is to avoid future crises in the financial sector and to ensure that banks are better capitalized so that tax payers will not be expected to bail them out. Like the Basel Committee approach,. the Commission approach is to raise the capital requirement. McCarthy also pointed out that if banks can pay bonuses they can also raise capital requirement.
Otmar Karas (EPP/AT) expressed concern about the current overlapping of CRD, since the EU is implementing the CRDII, and the EP is discussing CRDIII. Discussions are also being held on CRD IV, which makes it difficult to have a clear overview of the timeline. It is even more complicated as there is a need to look simultaneously at what is happening in Basel. He asked for more transparency to help the industry understand what is going on.
Wolf Klinz (DE/ALDE) said that banks need more and better capital, so how fast can we expect banks to meet this higher capital requirement. They all started from different starting points and this requirement for higher capital will be demanding. The EU should not forget in this process that the level playing field should be maintained and that banks while meeting the CRD have to keep serving the economy.
The Commission said that the EU is not just following Basel., The Commission also needs to make sure that the outcome of Basel’s discussions are also useful for the European market. There is a strong set of rules from Basel and the EC believes that Basel should be implemented in Europe. The trading book rules should be implemented by the end of 2010. In prudential rules there is a need to progress quickly on a sound regulatory approach.
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