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EUROPEAN PARLIAMENT

2004

2009

Committee on Economic and Monetary Affairs

24.5.2005 PE 357.763v01-00

AMENDMENTS 289-887

Draft report (PE 355.794v01-00)Alexander Radwan1. Proposal for a Directive of the European Parliament and of the Council recasting Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions

(COM(2004)0486 – C6-0141/2004 – 2004/0155(COD))

and

2. Proposal for a Directive of the European Parliament and of the Council recasting Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment firms and credit institutions

(COM(2004)0486 – C6-0144/2004 – 2004/0159(COD))

Recast of Directive 2000/12/EC

Text proposed by the Commission Amendments by Parliament

Amendment by John Purvis

Amendment 289Recital 11 a (new)

(11a) Due to the legal impediments both on a national and cross-border basis at the time of drafting this Directive, it is not possible to apply the Directive at the level of the consolidated undertaking in Europe. As

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evolution in the directive of consolidated supervision is necessary to deliver a coherent framework for credit institutions active on a cross-border basis in line with the achievement of the internal market. The ultimate objective must be to deliver full application of the rules on a consolidated basis once the obstructive differences between Member States as regards the rules to which these institutions are subject have been removed. It is the intention of the Commission to remove those impediments as part of its Forward Looking Agenda before the end of 2009.

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Justification

The proposal for a Directive currently applies the rules at solo entity level. This reflects the fragmented nature of supervision in the EU. As the ultimate objective of the Directive should be consolidated supervision in line with the Single Market, the Commission should seek to eliminate the obstacles to consolidated supervision as part of its forward agenda. The level of application of the rules in the Capital Requirements Directive must be reviewed before the end of 2008 by the Commission and the Member States.

Amendement déposé par Piia-Noora Kauppi

Amendement 290 Recital 11a (new)

(11a) Due to the legal impediments both at a national and cross-border basis at the time of drafting this Directive, it is not possible to apply the Directive at the level of the consolidated undertaking in Europe. As evolution in the directive of consolidated supervision is necessary to deliver a coherent framework for credit institutions active on a cross-border basis in line with the achievement of the internal market. The ultimate objective must be to deliver full application of the rules on a consolidated basis once the obstructive differences between Member States as regards the rules to which these institutions

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are subject have been removed. It is the intention of the Commission to remove those impediments as part of its Forward Looking Agenda before the end of 2009.

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Amendement déposé par Astrid Lulling

Amendement 291Considérant 12 bis (nouveau)

(12 bis) Pour les établissements agréés par leurs autorités compétentes, les États membres peuvent également fixer des règles plus strictes que celles prévues à l'article 9, paragraphe 1, premier alinéa, à l'article 9, paragraphe 2, et aux articles 12, 19 à 21, 44 à 52, 75 et 120 à 122. Les États membres peuvent également demander que l'article 123 soit respecté sur une base individuelle ou autre, et que la sous-consolidation décrite à l'article 73, paragraphe 2, soit appliquée à d'autres niveaux au sein d'un groupe.

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Justification

Afin d'éviter tout malentendu, ce considérant (qui reprend la position du Conseil) précise que la portée de la présente directive est d'harmonisation minimale, comme l'était la directive 2000/12/CE. Par conséquent, les Etats membres restent libres d'édicter des règles plus strictes que celles qui sont prévues par la directive.

Amendement déposé par Karsten Friedrich Hoppenstedt

Amendement 292 Erwägungsgrund 33 a (neu)

(33a) Hierzu hat der Baseler Ausschuss für Bankenaufsicht am 26. Juni 2004 eine Rahmenvereinbarung über die Internationale Konvergenz der

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Kapitalmessung und Eigenkapitalanforderungen verabschiedet. Die Bestimmungen in dieser Richtlinie über die Mindesteigenkapitalanforderungen der Kreditinstitute sowie die Mindesteigenkapitalbestimmungen in der Richtlinie 93/6/EWG für Kreditinstitute und Wertpapierfirmen bilden ein Äquivalent zu den Bestimmungen der Baseler Rahmenvereinbarung.

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Justification

Durch diesen Erwägungsgrund würde klarstellt, dass die EU-Richtlinie die konkrete Umsetzung der Baseler Rahmenvereinbarung darstellt und inhaltlich ein Äquivalent zur Baseler Regelung bildet. Ein solcher Passus wäre von Bedeutung zur Vermeidung der "Doppelrechnung" bzw. Erstellung eines "Überleitungsbogens" für Baseler Zwecke für die international tätigen Institute (Basel-Banken).


Amendement 293 Erwägungsgrund 34

(34) Der Vielfalt der Kreditinstitute in der Gemeinschaft sollte unbedingt Rechnung getragen werden; zu diesem Zweck sollten die Kreditinstitute für die Ermittlung ihrer Mindesteigenkapitalanforderungen für das Kreditrisiko zwischen verschiedenen Ansätzen mit unterschiedlich hohem Grad an Risikoempfindlichkeit und Differenziertheit wählen können. Durch den Einsatz externer Ratings und institutseigener Schätzungen individueller Kreditrisikoparameter gewinnen die Bestimmungen zum Kreditrisiko erheblich an Risikoempfindlichkeit und aufsichtsrechtlicher Solidität. Den Kreditinstituten sollten angemessene Anreize zu einer Umstellung auf Ansätze mit höherer Risikoempfindlichkeit gegeben werden.

(34) Der Vielfalt der Kreditinstitute in der Gemeinschaft sollte unbedingt Rechnung getragen werden; zu diesem Zweck sollten die Kreditinstitute für die Ermittlung ihrer Mindesteigenkapitalanforderungen für das Kreditrisiko zwischen verschiedenen Ansätzen mit unterschiedlich hohem Grad an Risikoempfindlichkeit und Differenziertheit wählen können. Durch den Einsatz externer Ratings und institutseigener Schätzungen individueller Kreditrisikoparameter gewinnen die Bestimmungen zum Kreditrisiko erheblich an Risikoempfindlichkeit und aufsichtsrechtlicher Solidität. Den Kreditinstituten sollten angemessene Anreize zu einer Umstellung auf Ansätze mit höherer Risikoempfindlichkeit gegeben werden. Wenn die Kreditinstitute in Anwendung der Ansätze dieser Richtlinie


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zur Ermittlung des Kreditrisikos ihre Schätzungen vorlegen, müssen sie ihre Datenverarbeitungserfordernisse auf das legitime Datenschutzinteresse ihrer Kunden gemäß den geltenden gemeinschaftlichen Datenschutzvorschriften abstimmen; die Verfahren der Kreditinstitute zur Kreditrisikomessung und zum Kreditrisikomanagement sollten dabei verbessert werden, um Methoden zur Festlegung der aufsichtsrechtlichen Eigenkapitalerfordernisse an Kreditinstitute zu entwickeln, die den differenzierten Verfahren der einzelnen Kreditinstitute Rechnung tragen. Die Verarbeitung der Daten erfolgt gemäß den Vorschriften für die Übermittlung personenbezogener Daten, die in der Richtlinie 95/46/EG des Europäischen Parlaments und des Rates vom 24. Oktober 1995 zum Schutz natürlicher Personen bei der Verarbeitung personenbezogener Daten und zum freien Datenverkehr1 festgelegt sind. In diesem Zusammenhang umfasst die Datenverarbeitung im Bereich der Kreditvergabe und dem Kreditmanagement gegenüber Kunden auch Entwicklung und Validierung von Systemen zum Kreditrisikomanagement und zur Kreditrisikomessung. Das dient sowohl zur Verwirklichung des berechtigten Interesses der Kreditinstitute als auch der Zielsetzung der Richtlinie, verbesserte Methoden zur Risikomessung und -steuerung anzuwenden und diese auch für regulatorische Eigenkapitalzwecke zu nutzen. Die Kommission ist aufgefordert, eine Mitteilung zu erstellen, inwieweit datenschutzrechtliche Anforderungen die Umsetzung der Richtlinie beeinträchtigen.

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ABl. L 281 vom 23.11.1995, S. 31.

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Justification

Präzisierung des Erwägungsgrundes dahingehend, dass die Sammlung und Speicherung personenbezogener Daten für Zwecke der Entwicklung und Validierung interner Risikosteuerungsinstrumente wie auch zur Risikosteuerung selbst zulässig und vereinbar mit EU-datenschutzrechtlichen Bestimmungen ist.

Amendement déposé par Othmar Karas

Amendement 294 Erwägungsgrund 35 a (neu)

(35a) Die Bestimmungen dieser Richtlinie entsprechen dem Grundsatz der Verhältnismäßigkeit, da sie insbesondere den Unterschieden zwischen den Kreditinstituten in Bezug auf deren Größe, deren Umfang, den Umfang der getätigten Geschäfte und deren Tätigkeitsbereich Rechnung tragen.Der Grundsatz bedeutet auch, dass für retail exposures möglichst einfache Rating Verfahren, auch im IRB-Ansatz, anerkannt werden.

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Justification

Der Ausschuss begrüßt und folgt den Ratsänderungsvorschlag. Bei der Anwendung der Richtlinie muss verhindert werden, dass kleinere Institute auf Grund aufsichtlicher Vorgaben in ihrer Geschäftstätigkeit unverhältnismäßig belastet werden.Gleichzeitig muss verhindert werden, dass die Vorteile aus der Eigenmittelreduktion für retail Forderungen gegenüber Verbraucher und KMU durch zu hohe Komplexität der Ratingprozesse und damit durch die Kosten des Ratings kompensiert werden. Der Vorschlag ist in Einklang mit der allgemeinen politischen Zielsetzung der Union, KMU den Zugang zu Finanzmitteln zu erleichtern (zB Frühlingsgipfel 2005 des Europäischen Rates)


Amendement 295 Erwägungsgrund 36

(36) Kreditrisikominderungstechniken sollten verstärkt anerkannt werden, wobei der rechtliche Rahmen insgesamt gewährleisten muss, dass die Solvenz nicht

(36) Kreditrisikominderungstechniken sollten verstärkt anerkannt werden, wobei der rechtliche Rahmen insgesamt gewährleisten muss, dass die Solvenz nicht


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durch eine unzulässige Anerkennung beeinträchtigt wird.

durch eine unzulässige Anerkennung beeinträchtigt wird. Im Rahmen des Möglichen sind die bisher schon in den jeweiligen Mitgliedstaaten banküblichen Sicherheiten zur Minderung von Kreditrisiken im Standardansatz, aber auch in den anderen Ansätzen anzuerkennen.

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Justification

Es ist wichtig festzuhalten, dass auch künftig die bereits bestehenden Sicherungstechniken anerkannt werden, wie z.B. die Forderungszession.

Amendement déposé par Wolf Klinz

Amendement 296Recital 57

(57) Die zur Durchführung dieser Richtlinie erforderlichen Maßnahmen sollten gemäß dem Beschluss 1999/468/EG des Rates vom 28. Juni 1999 zur Festlegung der Modalitäten für die Ausübung der der Kommission übertragenen Durchführungsbefugnisse erlassen werden.

(57) Die zur Durchführung dieser Richtlinie erforderlichen Maßnahmen sollten gemäß dem Beschluss 1999/468/EG des Rates vom 28. Juni 1999 zur Festlegung der Modalitäten für die Ausübung der der Kommission übertragenen Durchführungsbefugnisse erlassen werden. Die Kommission kann notwendige Veränderungen der technischen Anhänge durchführen. Davon abgesehen darf sie zur Sicherung der Rechte des Europäischen Parlaments beim Erlass von Durchführungsmaßnahmen die Bestimmungen dieser Richtlinie nicht verändern und muss gemäß den in dieser Richtlinie festgeschriebenen Grundsätzen handeln.

Or. deJustification

Die Rechte des Europäischen Parlaments gegenüber Rat und Kommission müssen gewahrt bleiben. Allerdings sollte gleichzeitig bezüglich der technischen Anhänge mehr Flexibilität bestehen und die Kommission somit die Möglichkeit erhalten, schnelle Veränderungen in diesem Bereich durchzuführen.


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Amendment by Ieke van den Burg

Amendment 297Recital 57

(57) The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission.

(57) The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission, taking into account the application of the comitology procedures recommended in the Lamfalussy-framework.

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Justification

Recognizing the fact that this proposal for a Directive was drafted before the Lamfalussy framework was applicable to the banking sector, it should be considered whether the current amount of technical detail in this Directive is really something that should be dealt with by the Commission only, given the new possibilities in aacordance with the newly adopted Directive COM(2003)0659.

Amendment by Alexander Radwan

Amendment 298Article 1, paragraph 3

3. The institutions permanently excluded pursuant to Article 5, with the exception, however, of the central banks of the Member States, shall be treated as financial institutions for the purposes of Article 39 and Title V, Chapter 4, Section 1.

3. The institutions permanently excluded pursuant to Article 2, with the exception, however, of the central banks of the Member States, shall be treated as financial institutions for the purposes of Article 39 and Title V, Chapter 4, Section 1.

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Justification

Cross reference / Typographical error.


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Amendement déposé par Manfred Weber

Amendement 299 Artikel 2 a (neu)

Artikel 2a

Banken mit einer Bilanzsumme bis fünf Mrd. EUR, die ihre überwiegende Geschäftstätigkeit auf einen regional abgegrenzten Markt innerhalb eines Mitgliedsstaates beschränken, sind nicht zur Erfüllung der Bestimmungen dieser Richtlinie verpflichtet. Diese Banken haben jedenfalls die Bestimmungen der Richtlinie 2000/12/EG („Basel I“) weiterhin anzuwenden.

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Justification

Nach dem Vorbild der Umsetzung der Basel II-Regelungen bei den US-Banken soll es kleineren regional tätigen Banken offen stehen, ob sie das Basel II-Regime einführen oder weiterhin Basel I anwenden.

Dabei ist zu berücksichtigen, dass die Empfehlungen des Basler Ausschusses nur an international tätige Banken gerichtet sind und daher eine Anwendung auf Banken mit regional orientierter Geschäftstätigkeit nicht notwendig erscheint.

Die übersichtlicheren Strukturen in kleineren Banken rechtfertigen eine differenzierte Anwendung, zumal die aus Basel II entstehenden Aufwendungen kleinere Institute unproportional höher als Großbanken belasten.

Da gerade die regionalen Sparkassen und Genossenschaftsbanken der Hauptfinancier für die KMU-Kunden im ländlichen und kleinstädtischen Bereich sind, muss eine unverhältnismäßige Belastung dieser Banken vermieden werden. Nur die Sicherung der Wettbewerbsfähigkeit der regionalen Banken garantiert, dass die Kunden in diesen Märkten nicht auf einige wenige Großbanken angewiesen sind.


Amendment 300Article 3, paragraph 1, subparagraph 3

In the case of credit institutions other than In the case of credit institutions other than


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those which are set up in areas newly reclaimed from the sea or have resulted from scission or mergers of existing institutions dependent or answerable to the central body, the Commission, pursuant to the procedure set out in Article 150 may lay down additional rules for the application of the second subparagraph including the repeal of exemptions provided for in the first subparagraph, where it is of the opinion that the affiliation of new institutions benefiting from the arrangements laid down in the second subparagraph might have an adverse effect on competition.

those which are set up in areas newly reclaimed from the sea or have resulted from scission or mergers of existing institutions dependent or answerable to the central body, the Commission, pursuant to the procedure set out in Article 151 may lay down additional rules for the application of the second subparagraph including the repeal of exemptions provided for in the first subparagraph, where it is of the opinion that the affiliation of new institutions benefiting from the arrangements laid down in the second subparagraph might have an adverse effect on competition.

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Justification




(6) «institutions», for the purposes of Sections 2 and 3 of Title V, Chapter 2, means institutions as defined in [Article 2(3) of Council Directive 96/3/EEC];

6. «institutions», for the purposes of Sections 2 and 3 of Title V, Chapter 2, means institutions as defined in [Article 3(1)(c) of Council Directive 96/3/EEC];

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(10) «participation» for the purposes of 10. «participation» for the purposes of


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points (o) and (p) of Articles 57 (2), 71 to 73 and Title V, Chapter 4 means participation within the meaning of the first sentence of Article 17 of Council Directive 78/660/EEC1, or the ownership, direct or indirect, of 20 % or more of the voting rights or capital of an undertaking;

points (o) and (p) of Articles 57, 71 to 73 and Title V, Chapter 4 means participation within the meaning of the first sentence of Article 17 of Council Directive 78/660/EEC1, or the ownership, direct or indirect, of 20 % or more of the voting rights or capital of an undertaking;

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Amendement déposé par Alexander Radwan

Amendement 303 Article 4, paragraph 17

(17)“EU parent financial holding company” mean a parent financial holding company in a Member State which is not a subsidiary of a credit institution authorised in any Member State;

(17)“EU parent financial holding company” mean a parent financial holding company in a Member State which is not a subsidiary of a credit institution authorised in any Member State or of another financial holding company set up in any Member State;

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Justification

Alignment with Council proposal. Replaces amemdment 14 of the Radwan draft report.


Amendment 304 Article 4, paragraph 18

(18) “public sector entities” means non-commercial administrative bodies responsible to central governments, regional governments or local authorities, or authorities that in the view of the competent authorities exercise the same responsibilities as regional and local authorities;

(18) “public sector entities” means non-commercial administrative bodies responsible to central governments, regional governments or local authorities, or authorities that in the view of the competent authorities exercise the same responsibilities as regional and local authorities, or non-commercial undertakings owned by central governments that have specific


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arrangements (guarantees);

Or. enJustification

Follows from amendment 111 of the Radwan draft report.



(18) ”public sector entities” means non-commercial administrative bodies responsible to central governments, regional governments or local authorities, or authorities that in view of the competent authorities exercise the same responsibilities as regional and local authorities.

(18) ”public sector entities” means non-commercial administrative bodies responsible to central governments, regional governments or local authorities, or authorities that in view of the competent authorities exercise the same responsibilities as regional and local authorities, and may include self administrative bodies governed by law that are under public supervision, like Chambers and social insurance institutions.

Or. enJustification

Clarification that the term public sector entity may include chambers or public social insurance institutions, if they are comparable to public administrative bodies (e.g. public supervision, revenue raising power granted by law, etc).



(28) "conversion factor" means the ratio, to the currently undrawn amount of the commitment, of the currently undrawn amount of a commitment subject to an advised or unadvised limit that will be drawn and outstanding at default;

(28) "conversion factor" means the ratio of the currently undrawn amount of a commitment that will be drawn and outstanding at default to the currently undrawn amount of the commitment, the extent of the commitment shall be determined by the advised limit, unless the unadvised limit is higher;

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Justification

Alignment with Council proposal. Substitution of amendment 16 of Radwan report.



(33) “repurchase transaction” means any transaction governed by an agreement falling within the definition of ‘repurchase agreement’ or ‘reverse repurchase agreement’ as defined in [Article 3 point (m) of Directive 93/6/EEC];

(33) “repurchase transaction” means any transaction governed by an agreement falling within the definition of ‘repurchase agreement’ or ‘reverse repurchase agreement’ as defined in [Article 3(1) point (m) of Directive 93/6/EEC];

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(34) “securities or commodities lending or borrowing transaction” means any transaction falling within the definition of ‘securities or commodities lending’ or ‘securities or commodities borrowing’ as defined in [Article 3 point (n) of Directive 93/6/EEC];

(34) “securities or commodities lending or borrowing transaction” means any transaction falling within the definition of ‘securities or commodities lending’ or ‘securities or commodities borrowing’ as defined in [Article 3(1) point (n) of Directive 93/6/EEC];

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Amendment 309Article 4, paragraph 45, point (b)

(b) two or more natural or legal persons between whom there is no relationship of control as set out in the first indent but who are to be regarded as constituting a single risk because they are so interconnected that, if one of them were to experience financial problems, the other or all of the others would be likely to encounter repayment difficulties;

(b) two or more natural or legal persons between whom there is no relationship of control as set out in point (a) but who are to be regarded as constituting a single risk because they are so interconnected that, if one of them were to experience financial problems, the other or all of the others would be likely to encounter repayment difficulties;

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Amendement déposé par John Purvis

Amendement 310 Article 4, paragraph 47 a (new)

(47a) "Purchased receivables" means receivables purchased by a credit institution, which may be treated under a distinct approach based on the default risk of the obligors under the receivables and on dilution risk, instead of as exposures to the receivables' sellers to whom it has recourse.

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Justification

The Basel Committee did not intend to capture Factoring and Invoice Discounting business within the Purchased Receivables approach. These changes are required to enable firms to adopt the more appropriate corporate secured lending approaches for such product groups. If the Directive remains unchanged and is applied literally by member states, it would pose a significant risk to SME liquidity.


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Amendment 311Article 6

Member States shall require credit institutions to obtain authorisation before commencing their activities. Without prejudice to Articles 7 to 9, 11 and 12 they shall lay down the requirements for such authorisation and notify them to the Commission.

Member States shall require credit institutions to obtain authorisation before commencing their activities. Without prejudice to Articles 7 to 12 they shall lay down the requirements for such authorisation and notify them to the Commission.

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Amendment 312Article 24, paragraph 1, point (e)

(e) the financial institution must be effectively included, for the activities in question in particular, in the consolidated supervision of the parent undertaking, or of each of the parent undertakings, in accordance with Title V, Chapter 4, Section 1, in particular for the calculation of the solvency ratio, for the control of large exposures and for purposes of the limitation of holdings provided for in Article 120.

(e) the financial institution must be effectively included, for the activities in question in particular, in the consolidated supervision of the parent undertaking, or of each of the parent undertakings, in accordance with Title V, Chapter 4, Section 1, in particular for the purposes of the minimum own funds requirements set out in Article 75 for the control of large exposures and for purposes of the limitation of holdings provided for in Article 120 to 122.

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4. Branches which have commenced their activities, in accordance with the provisions in force in their host Member States, before 1 January 1993, shall be presumed to have been subject to the procedure laid down in Article 25 and in paragraphs 1 and 2 of this Article. They shall be governed, from that date, by paragraph 3 of this Article, and by Article 23, Sections 2 and 5 and Article 43.

4. Branches which have commenced their activities, in accordance with the provisions in force in their host Member States, before 1 January 1993, shall be presumed to have been subject to the procedure laid down in Article 25 and in paragraphs 1 and 2 of this Article. They shall be governed, from that date, by paragraph 3 of this Article, and by Article 23 and Article 43 Sections 2 and 5.

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The Member States shall inform the Commission of the number and type of cases in which there has been a refusal pursuant to Article 25 and 26 or in which measures have been taken in accordance with Article 30(3).

The Member States shall inform the Commission of the number and type of cases in which there has been a refusal pursuant to Article 25 and 26 (1) to (3) or in which measures have been taken in accordance with Article 30(3).

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Amendment 315Article 46, subparagraph 1

Member States may conclude cooperation agreements, providing for exchanges of

Member States may conclude cooperation agreements, providing for exchanges of


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information, with the competent authorities of third countries or with authorities or bodies of third countries as defined in Articles 47 and 48(1) only if the information disclosed is subject to guarantees of professional secrecy at least equivalent to those referred to in this Article. Such exchange of information must be for the purpose of performing the supervisory task of the authorities or bodies mentioned.

information, with the competent authorities of third countries or with authorities or bodies of third countries as defined in Articles 47 and 48(1) only if the information disclosed is subject to guarantees of professional secrecy at least equivalent to those referred to in Article 44(1). Such exchange of information must be for the purpose of performing the supervisory task of the authorities or bodies mentioned.

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Amendment 316Article 57, point (o) (i)

(i) insurance undertakings within the meaning of Article 6 of First Council Directive 73/239/EEC , Article 6 of First Council Directive 79/267/EEC2 or Article 1(b) of Directive 98/78/EC of the European Parliament and of the Council;

(i) insurance undertakings within the meaning of Article 6 of First Council Directive 73/239/EEC , Article 4 of Directive 2002/83/EC2 or Article 1(b) of Directive 98/78/EC of the European Parliament and of the Council3;

2 OJ L 63, 13.3. 1979, p. 1 2 OJ L 345, 19.12.2002, p. 1

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Amendment 317Article 57, point (p) (ii)


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(ii) instruments referred to in Article 18(3) of Directive 79/267/EEC.

(ii) instruments referred to in Article 27(3) of Directive 2002/83/EC.

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Where shares in another credit institution, financial institution, insurance or reinsurance undertaking or insurance holding company are held temporarily for the purposes of a financial assistance operation designed to reorganise and save that entity, the competent authority may waive the provisions on deduction referred to in points (l) to (p).

Where shares in another credit institution, financial institution, insurance or reinsurance undertaking or insurance holding company are held temporarily for the purposes of a financial assistance operation designed to reorganise and save that entity, the competent authority may waive the provisions on deduction referred to in points (l) to (p) of Article 57.

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Justification




As an alternative to the deduction of the items referred to in points (o) to (p), Member States may allow their credit institutions to apply mutatis mutandis methods 1, 2, or 3 of Annex I to Directive 2002/87/EC. Method 1 (Accounting consolidation) may be applied only if the competent authority is confident about the level of integrated management and internal control regarding the entities which would

As an alternative to the deduction of the items referred to in points (o) to (p) of Article 57, Member States may allow their credit institutions to apply mutatis mutandis methods 1, 2, or 3 of Annex I to Directive 2002/87/EC. Method 1 (Accounting consolidation) may be applied only if the competent authority is confident about the level of integrated management and internal control regarding the entities which would


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be included in the scope of consolidation. The method chosen shall be applied in a consistent manner over time.

be included in the scope of consolidation. The method chosen shall be applied in a consistent manner over time.

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Amendement 320 Article 60, subparagraph 1

Member States may provide that for the calculation of own funds on a stand-alone basis, credit institutions subject to supervision on a consolidated basis in accordance with Chapter 4, Section 1 or to supplementary supervision in accordance with Directive 2002/87/EC, need not deduct the items referred to in points (l) to (p) which are held in credit institutions, financial institutions, insurance or reinsurance undertakings or insurance holding companies, which are included in the scope of consolidated or supplementary supervision.

Member States shall provide that for the calculation of own funds on a stand-alone basis, credit institutions subject to supervision on a consolidated basis in accordance with Chapter 4, Section 1 or to supplementary supervision in accordance with Directive 2002/87/EC, shall not deduct the items referred to in points (l) to (p) which are held in credit institutions, financial institutions, insurance or reinsurance undertakings or insurance holding companies, which are included in the scope of consolidated or supplementary supervision.

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Justification

The existing Article introduces a national discretion which will result in different approaches across the EU, leading to significant competitive distortions in respect of capital requirements for identical underlying business. The proposed change provides an important levelling of the playing field.


Amendment 321 Article 60, subparagraph 1


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Member States may provide that for the calculation of own funds on a stand-alone basis, credit institutions subject to supervision on a consolidated basis in accordance with Chapter 4, Section 1, or to supplementary supervision in accordance with Directive 2002/87/EG, need not deduct the items referred to in points (l) to (p) which are held in credit institutions, financial institutions, insurance or reinsurance undertakings or insurance holding companies, which are included in the scope of consolidated or supplementary supervision.

Member States may provide that for the calculation of own funds on a stand-alone basis, credit institutions subject to supervision on a consolidated basis in accordance with Chapter 4, Section 1, or which are associated to a central institution and as a group fulfil the requirements of the minimum level of own funds on a consolidated basis, or to supplementary supervision in accordance with Directive 2002/87/EG, need not deduct the items referred to in points (l) to (p) which are held in credit institutions, financial institutions, insurance or reinsurance undertakings or insurance holding companies, which are included in the scope of consolidated or supplementary supervision.

Or. en

Justification

The idea of deducting holdings of the unconsolidated own funds is to avoid the double-use of own funds. Within a banking group where several local credit institutions are associated to one common central institution, the focus of a holding in the central institutions is not a high rate of return. In contrast to other holdings, in such a case it is all about outsourcing of stuff functions to a common subsidiary. Such a holding is systematically important for the functioning of the whole group. The holding in the central institution is inherent to the system of such a group. The continuity of the central institution lies in the interest of all the credit institutions (economies of scales). Besides, the additional existing group-internal guarantee systems guarantee the continuance of such undertakings. Such a group is acting as an economic unit, operating under the same trademark, using the same IT-infrastructure, having common undertakings which fulfil special tasks within the group (like the central institution) and having additional guarantee schemes, usually on a voluntary basis. All the credit institutions within the group are dependent from each other and from the common undertakings so that a holding in the central institution is crucial to the whole group. A deduction of own funds is therefore not necessary and would be unjustified in the case of holdings of credit institutions, which are associated to one common central institution, if the group can demonstrates to the competent authority that the whole group has to fulfil the requirements of the minimum level of own funds on a consolidated basis. Such a requirement would guarantee that own funds can not be used more than one time. Besides, all in all there are no more own funds for the group on a consolidated basis than there would be, if the unconsolidated own funds were to be deducted.


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Member States may provide that for the calculation of own funds on a stand-alone basis, credit institutions subject to supervision on a consolidated basis in accordance with Chapter 4, Section 1 or to supplementary supervision in accordance with Directive 2002/87/EC, need not deduct the items referred to in points (l) to (p) which are held in credit institutions, financial institutions, insurance or reinsurance undertakings or insurance holding companies, which are included in the scope of consolidated or supplementary supervision.

Member States may provide that for the calculation of own funds on a stand-alone basis, credit institutions subject to supervision on a consolidated basis in accordance with Chapter 4, Section 1 or to supplementary supervision in accordance with Directive 2002/87/EC, need not deduct the items referred to in points (l) to (p) of Article 57 which are held in credit institutions, financial institutions, insurance or reinsurance undertakings or insurance holding companies, which are included in the scope of consolidated or supplementary supervision.

Or. en

Justification




To these may be added cumulative preferential shares other than those referred to in point (h) of Article 57 (2).

To these may be added cumulative preferential shares other than those referred to in point (h) of Article 57.

Or. en

Justification



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3. For credit institutions calculating risk-weighted exposure amounts under Section 3, Subsection 2, positive amounts resulting from the calculation in Annex VII, part 1, paragraph 34, may, up to 0.6% of risk weighted exposure amounts calculated under Subsection 2, be accepted as other items. For these credit institutions value adjustments and provisions included in the calculation referred to in Annex VII, Section 3, part 1, paragraph 34 and value adjustments and provisions for exposures referred to in point (e) of Article 57 shall not be included in own funds other than in accordance with this provision. For these purposes, risk-weighted exposure amounts shall not include those calculated in respect of securitisation positions which have a risk weight of 1250%.

3. For credit institutions calculating risk-weighted exposure amounts under Section 3, Subsection 2, positive amounts resulting from the calculation in Annex VII, part 1, paragraph 34, may, up to 0.6% of risk weighted exposure amounts calculated under Subsection 2, be accepted as other items. For these credit institutions value adjustments and provisions included in the calculation referred to in Annex VII, part 1, paragraph 34 and value adjustments and provisions for exposures referred to in point (e) of Article 57 shall not be included in own funds other than in accordance with this provision. For these purposes, risk-weighted exposure amounts shall not include those calculated in respect of securitisation positions which have a risk weight of 1250%.

Or. en

Justification



Amendment 325Article 65, paragraph 1, introductory part

1. Where the calculation is to be made on a consolidated basis, the consolidated amounts relating to the items listed under Article 57 (2) shall be used in accordance with the rules laid down in Chapter 4, Section 1. Moreover, the following may, when they are credit («negative») items, be regarded as consolidated reserves for the calculation of own funds:

1. Where the calculation is to be made on a consolidated basis, the consolidated amounts relating to the items listed under Article 57 shall be used in accordance with the rules laid down in Chapter 4, Section 1. Moreover, the following may, when they are credit («negative») items, be regarded as consolidated reserves for the calculation of own funds:


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Or. enJustification


Amendement déposé par Jean-Paul Gauzès

Amendment 326 Article 66, paragraphe 3

3. Les autorités compétentes peuvent autoriser les établissements de crédit à dépasser les limites prévues au paragraphe 1 dans des circonstances exceptionnelles et provisoires.

3. Les autorités compétentes peuvent autoriser les établissements de crédit à dépasser les limites prévues au paragraphe 1 dans des circonstances exceptionnelles et provisoires et à maintenir le traitement appliqué aux participations visées à l'article 57, point o), acquises antérieurement à l'entrée en vigueur de la présente directive.

Or. frJustification

Les dispositions nouvelles modifient fondamentalement le traitement des participations détenues par des établissements de crédit dans les sociétés importantes d'assurance ou de réassurance tel qu'il résultait de la Directive en cours de refonte mais également de la Directive 2002/87/CE du 16 décembre 2002 maintenue en vigueur. Il convient d'éviter qu'une modification brutale du traitement prudentiel ne détériore l'équilibre économique existant.



1. Credit institutions shall comply with the obligations laid down in Articles 22 and 75 and Section 5 on an individual basis.

1. Credit institutions shall comply with the obligations laid down in Articles 22, 75, 120, 123, Section 5 and Chapter 5 on a consolidated basis.

Or. en

Justification

The individual level of application of the ratio (article 68 of the CRD) is inconsistent with the new Basel Accord. Article 69 allows derogation (waiver), but it is too restrictive. Moreover, it introduces a sub-consolidated level in opposition to the European framework and creates a further additional level of capital requirements as well as a further obligation to report.


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The new European Directive must provide, as is the case in CAD 2, that the consolidated level is the standard basis for prudential control and that the waiver is left to national regulators to choose an individual supervision if they consider it necessary.

The amendment to article 68 cannot be separated from the amendment to article 69.



2. Every credit institution which is neither a subsidiary in the Member State where it is authorised and supervised, nor a parent undertaking, and every credit institution not included in the consolidation pursuant to Article 73, shall comply with the obligations laid down in Articles 120 and 123 on an individual basis.

2. Subsidiaries and parent undertaking included in a consolidated supervision are excluded from individual application of the Directive requirements except for application of Article 69.

Or. en

Justification



The amendment to article 68 cannot be separated from the amendment to article 69



3. Every credit institution which is neither a parent undertaking, nor a subsidiary, and every the credit institution not included in the consolidation pursuant to Article73, shall comply with the obligations laid down in Chapter 5 on an individual basis.

deleted


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Or. en

Justification



The amendment to article 68 cannot be separated from the amendment to article 69


Amendment 330 Article 69, paragraph 1 Introductory part

1. Die Mitgliedstaaten können beschließen, Tochterunternehmen eines Kreditinstituts von der Anwendung des Artikels 68 Absatz 1 auszunehmen, wenn sowohl das Tochterunternehmen als auch das Kreditinstitut von dem betreffenden Mitgliedstaat zugelassen und beaufsichtigt werden, das Tochterunternehmen in die konsolidierte Beaufsichtigung des Mutterkreditinstituts einbezogen ist und alle nachstehenden Bedingungen erfüllt sind, so dass eine angemessene Verteilung der Eigenmittel auf Mutter und Töchter gewährleistet ist:

1. Mutterkreditinstitute und deren Tochterunternehmen sind von den Anforderungen des Artikels 68 Absatz 1 ausgenommen, wenn sowohl das Tochterunternehmen als auch das Kreditinstitut von dem betreffenden Mitgliedstaat beaufsichtigt werden, das Tochterunternehmen in die konsolidierte Beaufsichtigung des Mutterkreditinstituts einbezogen ist und alle nachstehenden Bedingungen erfüllt sind, so dass eine angemessene Verteilung der Eigenmittel auf Mutter und Töchter gewährleistet ist:

Or. de

Justification

Eine Überwachung auf konsolidierter Ebene der Konzernmutter sollte innerhalb eines Mitgliedsstaats der Regelfall sein, daher muss Wahlrecht gestrichen werden. Zudem wird durch die Neuformulierung vermieden, dass die Mutter zusätzlich einen Einzelabschluss vorlegen muss. Mittelfristig gesehen sollte EU-weit innerhalb eines Konzerns keine Einzelmeldung der Tochter- und Mutterinstitute mehr erforderlich sein. Die Kommission sollte in drei Jahren einen Bericht gegebenenfalls mit Änderungsvorschlägen vorlegen, ob die notwendigen rechtlichen und institutionellen Voraussetzungen für diese Ausdehnung


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vorhanden sind.


Amendment 331 Article 69, paragraph 1 Introductory part

1. Die Mitgliedstaaten können beschließen, Tochterunternehmen eines Kreditinstituts von der Anwendung des Artikels 68 Absatz 1 auszunehmen, wenn sowohl das Tochterunternehmen als auch das Kreditinstitut von dem betreffenden Mitgliedstaat zugelassen und beaufsichtigt werden, das Tochterunternehmen in die konsolidierte Beaufsichtigung des Mutterkreditinstituts einbezogen ist und alle nachstehenden Bedingungen erfüllt sind, so dass eine angemessene Verteilung der Eigenmittel auf Mutter und Töchter gewährleistet ist:

1. Die Mitgliedstaaten können beschließen, Kreditinstitute oder Tochterunternehmen eines Kreditinstituts von der Anwendung des Artikels 68 Absatz 1 auszunehmen, wenn sowohl das Tochterunternehmen als auch das Kreditinstitut von dem betreffenden Mitgliedstaat zugelassen und beaufsichtigt werden, das Tochterunternehmen in die konsolidierte Beaufsichtigung des Mutterkreditinstituts einbezogen ist und alle nachstehenden Bedingungen erfüllt sind, so dass eine angemessene Verteilung der Eigenmittel auf Mutter und Töchter gewährleistet ist:

Or. de

Justification

Die vom Berichterstatter vorgeschlagene Umwandlung des nationalen Wahlrechtes wird begrüßt. Die Einbeziehung auch des Mutter-Kreditinstitutes als Einzelinstitut entspricht der derzeitigen Regelung in Artikel 52(7). Aussagekräftig für die Eigenmittelsituation einer Gruppe ist der konsolidierte Abschluss, nicht der Einzelabschluss der Mutter. Damit würde auch der Aufwand reduziert.



1. The Member States may choose not to apply Article 68(1) to any subsidiary of a credit institution, where both the subsidiary and the credit institution are subject to authorisation and supervision by the Member State concerned, and the subsidiary is included in the supervision on a

1. The Member States shall not apply Article 68(1) to a credit institution or to any subsidiary, where the subsidiary and the credit institution are subject to authorisation and supervision by a Member State, and the credit institution and its subsidiary are included in the supervision on a consolidated


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consolidated basis of the credit institution which is the parent undertaking, and all of the following conditions are satisfied, in order to ensure that own funds are distributed adequately among the parent undertaking and the subsidiaries:

basis of the credit institution which is the parent undertaking, and all of the following conditions are satisfied in order to ensure that own funds are distributed adequately among the parent undertaking and the subsidiaries:

Or. enJustification

In the present Commission’s proposal the conditions to apply the waiver are more restrictive than those currently in force on the basis of Directive 2000/12/EC. In the proposal, the waiver would only be applicable to subsidiaries whereas in the current situation, the waiver is available for both “parent undertaking” and “subsidiaries”. It should be possible for a host supervisor, in particular for EU non material subsidiaries where there are no national depositors, to relay his supervision rights to the consolidating supervisor. In this case, the consent of both the consolidating supervisor and the host subsidiary supervisor are required to allow the waiver. When this condition is met, there is no reason anymore to have a national discretion: Member States can be obliged to permit this waiver since the discretion is available at the level of the supervisors. This makes the provision more flexible and provides an incentive to improved cooperation between supervisors.

Amendement déposé par Harald Ettl

Amendment 333 Article 69, paragraph 1, introductory part

1. The Member States may choose not to apply Article 68(1) to any subsidiary of a credit institution, where both the subsidiary and the credit institution are subject to authorisation and supervision by the Member State concerned, and the subsidiary is included in the supervision on a consolidated basis of the credit institution which is the parent undertaking, and all of the following conditions are satisfied, in order to ensure that own funds are distributed adequately among the parent undertaking and the subsidiaries:

1. The Member States may choose not to apply Article 68(1) to a credit institution or to any subsidiary of a credit institution, where the subsidiary and the credit institution are subject to authorisation and supervision by a Member State, and the credit institution and its subsidiary are included in the supervision on a consolidated basis of the credit institution which is the parent undertaking, and all of the following conditions are satisfied, in order to ensure that own funds are distributed adequately among the parent undertaking and the subsidiaries:

Or. en


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Justification

The waiver should be extended to the parent company as is currently the case in Directive 2000/12/EC, Article 52(7). The current proposal would result in both entity and consolidated level requirements which would not be prudentially justified and which would result in redundant capital being held.


Amendment 334 Article 69, paragraph 1, introductory part


1. The Member States may choose not to apply Article 68(1) to a credit institution or to any subsidiary, where the subsidiary and the credit institution are subject to authorisation and supervision by a Member State, and the credit institution and its subsidiary are included in the supervision on a consolidated basis of the credit institution which is the parent undertaking, and all of the following conditions are satisfied in order to ensure that own funds are distributed adequately among the parent undertaking and the subsidiaries:

Or. en

Justification

Member States have the national discretion to waive the level of application at solo entity. However the conditions to apply this waiver are more restrictive than those currently in force in the present Directive 2000/12/EC. In the proposal, the waiver would only be applicable to subsidiaries whereas in the current situation, the waiver is available for both “parent undertaking” and “subsidiaries”. The waiver should also not be limited to a Member State, but should be extended to the whole community. As it is still a national discretion ("Member States may choose not to apply"), the consent of both the consolidating supervisor and the host subsidiary supervisor are required to allow the waiver. In a further stage, this national discretion, that distort the Single Market, should be deleted and the level of application should be at the consolidated level.


Amendement 335 Article 69, paragraph 1, introductory part


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1. The Member States may choose not to apply Article 68(1) to a credit institution or to any subsidiary of a credit institution, where the subsidiary and the credit institution are subject to authorisation and supervision by the Member State concerned, and the credit institution and its subsidiary are included in the supervision on a consolidated basis of the credit institution which is the parent undertaking, and all of the following conditions are satisfied, in order to ensure that own funds are distributed adequately among the parent undertaking and the subsidiaries:

Or. en

Justification

The waiver should be extended to the parent company as is currently the case under article 52(7) of Directive 2000/12/EC. The Commission's text would result in both entity and consolidated level requirements, which would not be prudentially justified and which would result in redundant capital being held.

Amendement déposé par Pervenche Berès

Amendement 336 Article 69, paragraph 1, introductory part


1. The Member States shall not apply Article 68(1) to a credit institution, or any subsidiary of a credit institution where the subsidiary and the credit institution are subject to authorisation and supervision by a Member State concerned, and the credit institution and its subsidiary are included in the supervision on a consolidated basis of the credit institution which is the parent undertaking, and all of the following conditions are satisfied, in order to ensure that own funds are distributed adequately among the parent undertaking and the subsidiaries:

Or. en


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Justification

The current proposal which does not extent the waiver to parent company as it is the case in Directive 2000/12/Ec, would lead to heavy administrative burden not justified by prudential requirement.


Amendement 337 Article 69, paragraph 1, point (b)

(b) its parent undertaking is committed to an unconditional, explicit and irrevocable obligation to transfer own funds to the subsidiary and meet its liabilities, or the risks in the subsidiaries are of negligible interest;

(b) either the parent undertaking satisfies the competent authority regarding the prudent management of the subsidiary and has declared, with the consent of the competent authority, that it guarantees the commitments entered into by the subsidiary, or the risks in the subsidiaries are of negligible interest;

Or. en

Justification

Der Ratsänderungsvorschlag wird befürwortet. Das nationale Wahlrecht sollte beibehalten werden. Die Voraussetzungen für die Befreiungsmöglichkeit werden spezifiziert.


Amendement 338 Article 69, paragraph 1, point b


(b) either the parent undertaking satisfies the competent authority regarding the prudent management of the subsidiary and has declared, with the competent authority that it guarantees the commitments entered into by the subsidiary, or the risks in the subsidiaries are of negligible interest;

Or. en


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Justification

The Council amendment should be endorsed, since the conditions to apply this waiver are more restrictive than those currently in force in the present Directive 2000/12/EC and the condition (b) as currently written is near impossible to meet.

Amendment by Jean-Paul Gauzès



(b) either the parent undertaking satisfies the competent authority regarding the prudent management of the subsidiary and has declared, with the consent of the competent authority, that it guarantees the commitments entered into by the subsidiary, or the risks in the subsidiaries are of negligible interest;

Or. en

Justification

The systematic monitoring of the solvency ratio at three different levels whereas consolidated monitoring is generally all that is necessary is against the principles of a single internal market and financial integration. Moreover it could expose European banks to competitive distortion vis-à-vis banks in third countries, particularly in the United States, which would apply the Basel rules. Therefore it should be possible to extend to the parent credit institutions the waiver existing for subsidiaries (article 69 paragraph 1).




(b) either the parent undertaking satisfies the competent authority regarding the prudent management of the subsidiary and has declared, with the competent authority that it guarantees the commitments entered into by the subsidiary, or the risks in the subsidiaries are of negligible interest;

Or. en


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Justification

See justification to Amendment to Article 69, paragraph 1 by I. van den Burg.

Amendement déposé par Jonathan Evans

Amendement 341 Article 69, paragraph 1, point c

(c) the risk evaluation, measurement and control procedures of the parent undertaking cover the subsidiary;

(c) the risk evaluation, measurement and control policies of the parent undertaking cover the subsidiary;

Or. en

Justification

Groups do not necessarily have group-wide procedures (which could be business line specific) but they do have group-wide policies.


Amendement 342 Article 69, paragraph 1, point d

(d) the parent undertaking has the right to appoint or remove a majority the members of the management body of the subsidiary.

(d) the parent undertaking holds more than 50 % of the voting rights attaching to shares in the capital of the subsidiary and has the right to appoint or remove a majority of the members of the management body of the subsidiary.

Or. en

Justification

See Amendment to Article 69, paragraph 1, point b of Mr. Hoppenstedt.



(d) Das Mutterunternehmen ist zur Bestellung oder Abberufung der Mehrheit

(d) Das Mutterunternehmen ist zur Bestellung oder Abberufung der Mehrheit


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der Mitglieder des Leitungsorgans des Tochterunternehmens berechtigt.

der Mitglieder des Leitungsorgans,soweit gesellschaftsrechtlich zulässig, oder des Aufsichtsorgans des Tochterunternehmens berechtigt.

Or. de

Justification

Diese Regelung widerspricht dem Aktienrecht jener Mitgliedstaaten, in denen die Bestellung und Abberufung des Leitungsorgans formalrechtlich durch den Aufsichtsrat erfolgt.



(d) l’entreprise mère a le droit de nommer ou de révoquer la majorité des membres de l’organe de direction de la filiale.

(d) l'entreprise mère détient plus de 50 % des droits de vote attachés à la détention de parts ou d'actions de la filiale et a le droit de nommer ou de révoquer la majorité des membres de l'organe de direction de la filiale.

Or. fr

Justification

Il est hautement souhaitable de maintenir l’option pour chaque Etat membre de ne pas appliquer les dispositions concernant le respect des exigences en fonds propres et la réglementation des grands risques (cf. article 68 paragraphe 1 de la directive 2000/12/CE amendée) au niveau d’une banque individuelle si plusieurs conditions sont respectées, notamment lorsque l'entreprise mère détient plus de 50 % des droits de vote attachés à la détention de parts ou d'actions de la filiale et a le droit de nommer ou de révoquer la majorité des membres de l'organe de direction de la filiale. D’un point de vue prudentiel il ne convient pas d’affranchir unilatéralement des entités d’un groupe bancaire du respect des exigences en matière de fonds propres ou de la réglementation des grands risques.


Amendment 345Article 69, paragraph 1, point (d)

(d) the parent undertaking has the right to appoint or remove a majority the members

(d) the parent undertaking holds more than 50% of the voting rights attaching to shares


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of the management body of the subsidiary. in the capital of the subsidiary and has the right to appoint or remove a majority of the members of the management body of the subsidiary.

Or. en

Justification

The systematic monitoring of the solvency ratio at three different levels whereas consolidated monitoring is generally all that is necessary is against the principles of a single internal market and financial integration. Moreover it could expose European banks to competitive distortion vis-à-vis banks in third countries, particularly in the United States, which would apply the Basel rules. Therefore it should be possible to extend to the parent credit institutions the waiver existing for subsidiaries (article 69 paragraph 1).




(d) the parent undertaking has the right to appoint or remove a majority of the members of the management body of the subsidiary.

Or. enJustification



Amendment 347Article 69, paragraph 1, point (d a) (new)

(da) there is an agreement between the involved host and home supervisors about transferring these supervisory tasks to one of them as the consolidating supervisor

Or. en


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Justification





1. Member States may define exceptions to the consolidated supervision, only for significant listed subsidiaries or in case of lack of support from the parent undertaking or non adequate allocation of own funds to the subsidiary and request an entity or sub-consolidated level of application.

(a) there is no current or foreseen material or legal impediment to the prompt transfer of own funds or repayment of liabilities by its parent undertaking;


(c) the risk evaluation, measurement and control procedures of the parent undertaking cover the subsidiary;


2. The Member States may exercise the option provided for in paragraph 1 where the parent undertaking is a financial holding company set up in the same Member State as the credit institution, provided that it is subject to the same


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supervision as that exercised over credit institutions, and in particular to the standards laid down in Article 71(1).

Or. en

Justification


The new European Directive must provide, as is the case in CAD 2, that the consolidated level is the standard basis for prudential control and that the waiver is left to national regulators to choose an individual supervision if they consider it necessary.The amendment to article 68 cannot be separated from the amendment to article 69.



2. Les États membres peuvent exercer la faculté prévue au paragraphe 1 lorsque l'entreprise mère est une compagnie financière ayant son siège dans le même État membre que l'établissement de crédit, à condition qu'elle soit soumise à la même surveillance que celle exercée sur les établissements de crédit, et en particulier aux règles énoncées à l’article 71, paragraphe 1.

deleted

Or. fr

Justification

See Amendment to Article 69, paragraph 1, point d of Ms. Lulling.


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Amendement déposé par Pervenche Berès


2a. Without prejudice to points (a) to (c) of this paragraph, Member states do not apply dispositions of article 68 to credit institutions which are a parent undertaking under their agreement and their supervision:

a) there is no current or foreseen material or legal impediment to the prompt transfer of own funds or repayment of liabilities;

b) competent authorities benefiting from dispositions of this paragraph shall inform competent authorities of all member states;

c) procedures for assessment, measure and control of risks cover the parent undertaking.

Or. en

Justification

The current proposal which does not extent the waiver to parent company as it is the case in Directive 2000/12/Ec, would lead to heavy administrative burden not justified by prudential requirement.



2a. Subject to the items referred to in points (a) to (c) of this paragraph, the Member States may choose not to apply Article 68 (1) to any parent credit institution subject to authorisation and supervision by the Member State concerned :

a) there are no current or foreseen material practical or legal impediments to the prompt transfer of own funds or repayment of liabilities ;


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b) the competent authority which makes use of this paragraph shall inform the competent authorities of all other Member States ;

c) the risk evaluation, measurement and control procedures cover the parent undertaking.

Or. en

Justification

See Amendment to Article 69, paragraph 1 of Mr Gauzès.



The competent authorities may allow on a case by case basis parent credit institutions in a Member State to incorporate in the calculation of their requirement under Article 68(1) subsidiaries in the Community which meet the conditions laid down in the points (a), (c) and (d) of Article 69(1), and whose material exposures or material liabilities are to that parent credit institution in a Member State.

1. Subject to paragraphs 1a to 1c, the competent authorities may allow on a case by case basis parent credit institutions to incorporate in the calculation of their requirement under Article 68(1) subsidiaries which meet the conditions laid down in the points (c) and (d) of Article 69(1), and whose material exposures or material liabilities are to that parent credit institution.

Or. en

Justification

Alignment with Council proposal + editorial error. Substitution of am 25 of Radwan draft report.



1. The competent authorities may allow on a case by case basis parent credit institutions in a Member State to incorporate in the

1. Subject to paragraphs 1a to 1c, the competent authorities may allow on a case by case basis parent credit institutions to


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calculation of their requirement under Article 68(1) subsidiaries in the Community which meet the conditions laid down in the points (a), (c) and (d) of Article 69(1), and whose material exposures or material liabilities are to that parent credit institution in a Member State.

incorporate in the calculation of their requirement under Article 68(1) subsidiaries which meet the conditions laid down in the points (c) and (d) of Article 69(1), and whose material exposures or material liabilities are to that parent credit institution.

Or. en

Justification

Der Ratsänderungsvorschlag wird befürwortet. Die Voraussetzungen für die Befreiungsmöglichkeit werden spezifiziert. Eine Ausweitung der Ausnahme von der Einzelinstitutsaufsicht auf europäische Tochterunternehmen ist aufgrund fehlender rechtlicher und institutioneller Voraussetzungen nicht vertretbar (damit auch Ablehnung einer Überprüfung der Ausweitung auf EU-Töchter etwa nach fünf Jahren).



The competent authorities may allow on a case by case basis parent credit institutions in a member state to incorporate in the calculation of their requirement under Article 68 (1) subsidiaries in the Community which meet the conditions laid down in the points (a), (c) and (d) of Article 69 (1), and whose material exposures or material liabilities are to that parent credit institution in a Member State.

1. Subject to paragraphs 1a to 1c, the competent authorities may allow on a case by case basis parent credit institutions to incorporate in the calculation of their requirement under Article 68(1) subsidiaries which meet the conditions laid down in the points (c) and (d) of Article 69(1), and whose material exposures or material liabilities are to that parent credit institution.

Or. en

Justification

The Commission proposal would result in a very material increase in capital requirements without a proportionate prudential benefit. These additional costs are likely to be passed on to the consumer. The proposed change allows for a much wider application of Article 70. These changes are important for all Member States that do not propose to use the option provided by Article 60 not to deduct from the parent institution’s own funds the amount of capital invested in such subsidiaries.


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1a. The treatment in paragraph 1 shall be allowed only where the parent credit institution demonstrates fully to the competent authorities the circumstances and arrangements, including legal arrangements, by virtue of which there are no current or foreseen material practical or legal impediments to the prompt transfer of own funds or repayment of liabilities on demand by the subsidiary to its parent undertaking or at any other time.

Or. en

Justification

See Amendment to Article 70, paragraph 1 of Mr Hoppenstedt



1a. The treatment in paragraph 1 shall be allowed only where the parent credit institution demonstrates fully to the competent authorities the circumstances and arrangements, including legal arrangements, by virtue of which there are no material practical or legal impediments, and none are foreseen, to the prompt transfer of own funds, or repayment of liabilities when due by the subsidiary to its parent undertaking.

Or. en

Justification

Credit institutions, including those that typically service small retail consumers and SMEs, often hold mortgages or leased assets within subsidiaries. The amendment to Article 70 seeks


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to ensure that competent authorities can take full and appropriate account of the prudential risk posed by subsidiaries to credit institutions at an individual level. To avoid incurring prohibitive costs, the requirement of subsidiaries should be the ability to repay liabilities when due.



1a. The treatment in paragraph 1 shall be allowed only where the parent credit institution demonstrates fully to the competent authorities that there are no current or foreseen material practical or legal impediments to the prompt transfer of own funds by the subsidiary to its parent undertaking.

Or. en

Justification

See the Amendment to Article 70, paragraph 1 of Ms Kauppi.


Amendement 358 Article 70, paragraph 1 b (new)

1b. Where a competent authority exercises its discretion in accordance with paragraph 1, it shall on a regular basis and not less than once a year inform the competent authorities of all the other Member States of the use made of paragraph 1 and of the circumstances and arrangements referred to in paragraph 1a. Where the subsidiary is in a third country, the competent authorities shall also provide the same information to the competent authorities of that third country.

Or. en


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Justification



Amendement 359 Article 70, paragraph 1 b (new)

1b. Where a competent authority exercises its discretion in accordance with paragraph 1, it shall on a regular basis and not less than once a year inform the competent authorities of all the other Member States of the use made of paragraph 1 and of the circumstances and arrangements referred to in paragraph 1a. Where the subsidiary is in a third country, the competent authorities shall also provide the same information to the competent authorities of that third country.

Or. en

Justification



Amendement 360 Article 70, paragraph 1 c (new)

1c. Without prejudice to the generality of Article 144 competent authorities which make use of paragraph 1 shall publicly disclose, in the manner indicated in Article 144:

(a) the criteria it applies to determine that there is no current or foreseen material, practical or legal impediment to the prompt transfer of own funds or repayment of liabilities;

(b) the number of parent credit institutions which make use of paragraph 1 and the


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number of these which incorporate subsidiaries in a third country;

(c) on an aggregate basis for the Member State:

(i) the total amount of own funds of parent credit institutions which make use of paragraph 1 which are held in subsidiaries in a third country;

(ii) the percentage of total own funds of parent credit institutions which make use of paragraph 1 represented by own funds which are held in subsidiaries in a third country;

(iii) the percentage of total minimum own funds required under Article 75 of parent credit institutions which make use of paragraph 1 represented by own funds which are held in subsidiaries in a third country.

Or. en

Justification



Amendement 361 Article 70, paragraph 1 c (new)

1c. Without prejudice to the generality of Article 144 competent authorities which make use of paragraph 1 shall publicly disclose, in the manner indicated in Article 144:(a) the criteria it applies to determine that there is no current or foreseen material, practical or legal impediment to the prompt transfer of own funds;(b) the number of parent credit institutions which make use of paragraph 1 and the number of these which incorporate subsidiaries in a third country;


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(c) on an aggregate basis for the Member State:(i) the total amount of own funds of parent credit institutions which make use of paragraph 1 which are held in subsidiaries in a third country;(ii) the percentage of total own funds of parent credit institutions which make use of paragraph 1 represented by own funds which are held in subsidiaries in a third country;(iii) the percentage of total minimum own funds required under Article 75 of parent credit institutions which make use of paragraph 1 represented by own funds which are held in subsidiaries in a third country.

Or. en

Justification



Amendement 362 Article 72, paragraph 1, subparagraph 2

However, in respect of their significant subsidiaries, they shall disclose the information specified in Annex XII, part 1, paragraph 5, on an individual or sub-consolidated basis

However, in respect of their significant subsidiaries, they shall disclose the information specified in Annex XII, part 1, paragraph 5, on an individual or sub-consolidated basis. The competent authorities of the parent credit institution will classify significant subsidiaries.

Or. en

Justification

From the wording the process to define significant subsidiaries does not become clear. The amendment clarifies that the supervisor of the parent company has the responsibility to classify significant subsidiaries.

We want to stress that there is no public interest in disclosure of figures for a subsidiary


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100% owned by the parent company.



However, in respect of their significant subsidiaries, they shall disclose the information specified in Annex XII, part 1, paragraph 5, on an individual or sub-consolidated basis.

However, in respect of their significant subsidiaries, they shall disclose the information specified in Annex XII, part 1, paragraph 5, on an individual or sub-consolidated basis. The competent authorities of the parent credit institution will classify significant subsidiaries.

Or. en

Justification

See Amendment to Article 72, paragraph 1, subparagraph 1 of Mr Karas.

Amendement déposé par José Manuel García-Margallo y Marfil

Amendement 364 Article 79, paragraph 2, point (a)

a) the exposure must be either to an individual person or persons, or to a small or medium sized entity;

(a) the exposure must be either to an individual person or persons, or to a small or medium sized entity. Exposures to personal investment companies established solely for the purposes of managing the finances of a person or persons shall be treated in the same way as if the exposure were provided directly to the person or persons concerned;

Or. en

Justification

text




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(a) the exposure must be either to an individual person or persons, or to a small or medium sized entity. Exposures to personal investment companies established solely for the purposes of managing the finances of a person or persons shall be treated in the same way as if the exposure were provided directly to the person or persons concerned;

Or. en

Justification

In the high net worth market many individuals purchase their properties through Special Purpose Vehicles for a number of reasons. Failure to allow these SPVs to be treated as retail exposures penalises credit institutions (i.e. requires higher capital) especially small banks who tend to specialise in the high net worth market.




(a) the exposure must be either to an individual person or persons, or to a small or medium sized entity. Exposures to personal investment companies established solely for the purposes of managing the finances of a person or persons shall be treated in the same way as if the exposure were provided directly to the person or persons;

Or. en

Justification





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a) sie richten sich entweder an eine Einzelperson/an Einzelpersonen oder ein kleines oder mittleres Unternehmen

(a) sie richten sich entweder an eine Einzelperson/an Einzelpersonen oder ein kleines oder mittleres Unternehmen. Forderungen an Zweckgesellschaften, die einzig zum Zweck der Verwaltung des Vermögens einer oder mehrerer Personen gegründet wurden, sollten so behandelt werden als ob die Forderung direkt an die betroffene(n) Person(en) gerichtet sei;

Or. de

Justification

Den Zweckgesellschaften muss Rechnung getragen werden.



b) the exposure must be one of a significant number of exposures with similar characteristics such that the risk associated with such lending are substantially reduced;

(b) the exposure must be one of a number of exposures with similar characteristics such that the risk associated with such lending are substantially reduced;

Or. enJustification

In the high net worth market many individuals purchase their properties through Special Purpose Vehicles for a number of reasons. Failure to allow these SPVs to be treated as retail exposures penalises credit institutions (i.e. requires higher capital) especially small banks who tend to specialise in the high net worth market. In Article 79.2 (b) the use of the phrase “significant number of exposures” may preclude small banks from classifying portfolios as retail. Deletion of “significant” puts the emphasis on diversity of risk within a portfolio of assets with similar characteristics.



b) sie ist eine vielen Forderungen mit ähnlichen Merkmalen, so dass die Risiken dieser Ausleihungen erheblich reduziert werden;

(b) sie ist eine vielen Forderungen mit ähnlichen Merkmalen, so dass die Risiken dieser Ausleihungen erheblich reduziert werden; die Anforderungen hinsichtlich


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des Diversifizierungsgrades dürfen jedoch bei kleineren Instituten zu keiner Einschränkung des Kreditangebotes führen.

Or. de

Justification

Die in den früheren Entwürfen vorgesehene Beschränkung der Kredithöhe an das Eigenkapital einer Bank hätte zu einer unerwünschten Einschränkung der Kreditmöglichkeit von KMU-Kunden geführt.Zur Vermeidung von negativen Auswirkungen auf bestimmte KMU-Branchen sollte die Grenze für die Behandlung von KMU-Krediten von 1 Mio. EUR ausschließlich für betriebliche Kredite zur Verfügung stehen.



(b) the exposure must be one of a significant number of exposures with similar characteristics such that the risks associated with such lending are substantially reduced;

(b) the exposure must be one of a number of exposures with similar characteristics such that the risk associated with such lending are substantially reduced;

Or. enJustification

See Amendment to Article 79, paragraph 2, point a of Mr. García-Margallo y Marfil.


Amendement 371 Article 79, paragraph 2, point (c)

c) the total amount owed to the credit institution and any parent undertaking and its subsidiaries, including any past due exposure, by the obligor client or group of connected clients must not, to the knowledge of the credit institution, exceed EUR 1million. The credit institution must take reasonable steps to acquire this knowledge.

(c) the total amount owed to the credit institution and its parent undertaking and its subsidiaries, including any past due exposure, by the obligor client or group of connected clients, but excluding claims or contingent claims secured on real estate property, must not, to the knowledge of the credit institution, exceed EUR 1 million. The credit institution must take reasonable steps


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to acquire this knowledge.

Or. en

Justification

text



c) der dem Kreditinstitut und gegebenenfalls dem Mutterunternehmen und dessen Tochtergesellschaften von dem Kunden oder der Gruppe verbundener Kunden insgesamt geschuldete Betrag einschließlich etwaiger überfälliger Forderungen darf nach Wissen des Kreditinstituts nicht über eine Mio. EUR hinausgehen. Das Kreditinstitut unternimmt angemessene Schritte zur Erlangung dieses Wissens.

(c) der dem Kreditinstitut und gegebenenfalls dem Mutterunternehmen und dessen Tochtergesellschaften von dem Kunden oder der Gruppe verbundener Kunden insgesamt geschuldete Betrag darf nach Wissen des Kreditinstituts nicht über 2,5 Mio. EUR hinausgehen. Das Kreditinstitut unternimmt angemessene Schritte zur Erlangung dieses Wissens. Der Zeitwert der Retail-Mindestleasingzahlungen kann der Forderungsklasse der Retailforderungen zugeordnet werden.

Or. deJustification

Anpassung der Definitionen von Art. 72 Absatz 2 an Artikel 86 Absatz 4. Ferner ist die vorgeschlagene Begrenzung zu eng. Sie hätte einen negativen Einfluss auf kleine Banken und könnte die Verfügbarkeit von Krediten für KMU einschränken.Ferner soll der Zeitwert von Retail-Mindestleasingzahlungen als den Retail-Forderungen oder der Forderungsklasse der bedingten Retail-Forderungen zugeordnet betrachtet werden, um sicherzustellen, dass die Konsistenz bei allen Ansätzen gegeben ist.



(c) the total amount owed to the credit institution and any parent undertaking and its subsidiaries, including any past due exposure, by the obligor client or group of

(c) the total amount owed to the credit institution and parent undertakings and its subsidiaries, including any past due exposure, by the obligor client or group of


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connected clients, must not, to the knowledge of the credit institution, exceed EUR 1 million. The credit institution must take reasonable steps to acquire this knowledge.

connected clients, but excluding claims or contingent claims secured on residential real estate property, must not, to the knowledge of the credit institution, exceed EUR 1 million. The credit institution must take reasonable steps to acquire this knowledge.

Or. en

Justification

In order to be eligible for the retail treatment for both the standardised and IRB approaches, credit institutions are forced to demonstrate that their aggregate exposures to one counterparty are below € 1m. This poses a number of fundamental and practical issues and does not reflect the way in which institutions distinguish between retail and corporate exposures.Therefore, residential mortgage lending should be excluded from the aggregation calculation for the retail treatment.



(c) The total amount owed to the credit institution and any parent undertaking and its subsidiaries, including any past due exposure, by the obligor client or group of connected clients must not, to the knowledge of the credit institution, exceed EUR 1 million. The credit institution must take reasonable steps to acquire this knowledge.

(c) The amount owed to the credit institution, including any past due exposure, by the obligor client, but excluding claims or contingent claims secured on real estate property, must be consistently managed and treated as retail exposure by the credit institution.

Or. en

Justification

The Commission proposal does not reflect market practice and will result in significant additional costs without corresponding prudential benefits. It could restrict the availability of funding to SMEs. The proposed change reinforces the Basel Framework, which recognises that banks should not be forced to develop extensive new information systems simply for the purpose of ensuring perfect compliance [Basel Framework, paragraph 231].


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c) der dem Kreditinstitut und gegebenenfalls dem Mutterunternehmen und dessen Tochtergesellschaften von dem Kunden oder der Gruppe verbundener Kunden insgesamt geschuldete Betrag einschließlich etwaiger überfälliger Forderungen darf nach Wissen des Kreditinstituts nicht über ein Mio. EUR hinausgehen. Das Kreditinstitut unternimmt angemessene Schritte zur Erlangung dieses Wissens.

(c) der dem Kreditinstitut und gegebenenfalls dem Mutterunternehmen und dessen Tochtergesellschaften von dem Kunden geschuldete Betrag einschließlich etwaiger überfälliger Forderungen darf nach Wissen des Kreditinstituts nicht über ein Mio. EUR hinausgehen. Das Kreditinstitut unternimmt angemessene Schritte zur Erlangung dieses Wissens.

Or. de

Justification

Die in den früheren Entwürfen vorgesehene Beschränkung der Kredithöhe an das Eigenkapital einer Bank hätte zu einer unerwünschten Einschränkung der Kreditmöglichkeit von KMU-Kunden geführt.Zur Vermeidung von negativen Auswirkungen auf bestimmte KMU-Branchen sollte die Grenze für die Behandlung von KMU-Krediten von 1 Mio. EUR ausschließlich für betriebliche Kredite zur Verfügung stehen.



(c) the total amount owed to the credit institution and any parent undertaking and its subsidiaries, including any past due exposure, by the obligor client or group of connected clients must not, to the knowledge of the credit institution, exceed EUR 1 million. The credit institution must take reasonable steps to acquire this knowledge. Securities shall not be eligible for the retail exposure class.

(c) the total amount owed to the credit institution and its parent undertaking and its subsidiaries, including any past due exposure, by the obligor client or group of connected clients, but excluding claims or contingent claims secured on real estate property, must not, to the knowledge of the credit institution, exceed EUR 3 million. The credit institution must take reasonable steps to acquire this knowledge. Securities shall not be eligible for the retail exposure class.

Or. en


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3. The competent authorities responsible for exercising supervision on a consolidated basis pursuant to Articles 125 to 131 may decide not to apply in full or in part paragraphs 1 and 2 to the credit institutions which are included within comparable disclosures provided on a consolidated basis by a parent undertaking established in a third country.

3. The competent authorities responsible for exercising supervision on a consolidated basis pursuant to Articles 125 and 126 may decide not to apply in full or in part paragraphs 1 and 2 to the credit institutions which are included within comparable disclosures provided on a consolidated basis by a parent undertaking established in a third country.

Or. en

Justification




1. The Member States or the competent authorities responsible for exercising supervision on a consolidated basis pursuant to Article 125 to 131 may decide in the following cases that a credit institution, financial institution or ancillary services undertaking which is a subsidiary or in which a participation is held need not be included in the consolidation:

1. The Member States or the competent authorities responsible for exercising supervision on a consolidated basis pursuant to Articles 125 and 126 may decide in the following cases that a credit institution, financial institution or ancillary services undertaking which is a subsidiary or in which a participation is held need not be included in the consolidation:

Or. en

Justification



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Amendment 379Article 75, point (b)

(b) in respect of their trading-book business, for position risk, settlement and counter-party risk and, in so far as the limits laid down in Articles 111 to 117 are authorised to be exceeded, for large exposures exceeding such limits, the capital requirements determined in accordance with [Directive 93/6/EEC, Chapter V, Section 4];

(b) in respect of their trading-book business, for position risk, settlement and counter-party risk and, in so far as the limits laid down in Articles 111 to 117 are authorised to be exceeded, for large exposures exceeding such limits, the capital requirements determined in accordance with [Directive 93/6/EEC Article 18 and Chapter V, Section 4 of that directive];

Or. en

Justification



Amendement 380 Article 79, paragraph 2, subparagraph 2 a (new)

2a. The present value of retail minimum lease payments is eligible for the retail exposure class.

Or. enJustification

The present value of retail minimum lease payments should be considered as belonging to the retail claims or contingent retail claims class in order to guarantee consistency.



3. For the purposes of calculating risk-weighted exposure amounts for exposures to institutions, competent authorities shall decide whether to adopt the method based on the credit quality of the central

3. For the purposes of calculating risk-weighted exposure amounts for exposures to institutions, Member States shall decide whether to adopt the method based on the credit quality of the central government of


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government of the jurisdiction in which the credit institution is incorporated or the method based on the credit quality of the counterparty institution in accordance with Annex VI.

the jurisdiction in which the credit institution is incorporated or the method based on the credit quality of the counterparty institution in accordance with Annex VI.

Or. en

Justification

The adoption of the method shall be given to Member States, not to competent authorities. This amendment is identical with the amendment accepted by the Council.



3. For the purposes of calculating risk-weighted exposure amounts for exposures to institutions, competent authorities shall decide whether to adopt the method based on the credit quality of the central government of the jurisdiction in which the credit institution is incorporated or the method based on the credit quality of the counterparty institution in accordance with Annex VI.

3. For the purposes of calculating risk-weighted exposure amounts for exposures to institutions, competent authorities shall decide whether to adopt the method based on the credit quality of the central government of the jurisdiction in which the institution is incorporated or the method based on the credit quality of the counterparty institution in accordance with Annex VI.

Or. enJustification


Amendment by Harald Ettl


7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1), competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its institution to a

7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1), competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its institution to a


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counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking or an undertaking linked by a relationship within the meaning of Article 12(1) of Directive 83/349/EEC, provided that the following conditions are met:

Or. en

Justification

The wording of Article 80(7) is modelled on traditional group structures of the pyramid type, but does not reflect the structures of other types of consolidating groups (e.g. hour-glass structured co-operative groups). The amendment seeks to apply the principle "same risks - same treatment" to those groups, without changing the conditions for a 0%-weighting under 80 (7)(a)-(e).



7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1), competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1), competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, or an undertaking linked by a relationship with the sense of article 12(1) of Directive 83/349/EEC provided that the following conditions are met :

Or. en

Justification

The aim of this amendment is to take into account the positive effects of the integration in the European banking sector ; in this respect, the possibility to apply a 0 % risk weight to certain types of intra-group exposures within the European union would not be subject to a criterium based on the national localisation of the relevant entities. In the same spirit, such a treatment would apply to mutual and cooperative banks.


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Amendment by Pervenche Berès



7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1), competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking or an undertaking linked by a relationship within the meaning of Article 12, paragraph 1 of Directive 83/349/EEC, provided that the following conditions are met:

Or. en

Justification

This amendment proposes a global approach to prudential neutrality concerning intra-group exposure. It suggests to apply the principle "same risks - same treatment" to consolidated groups not included in the wording of the European Commission, without changing the conditions for a 0-weighting.




7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (a) to (h) of Article 57(1) , competent authorities shall exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

Or. en


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Justification

A 0% risk weight is a correct reflection of the risk associated with intra-group exposures. In order to remove competitive distortions within the Single Market, a 0% risk weight should be applied as a rule to all intra-group exposures to counterparties within the EU. The position of depositors and borrowers would be fully protected by the conditions, particularly condition (e).

Amendment by Piia-Noora Kauppi


7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1) , competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (a) to (h) of Article 57(1) , competent authorities shall exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

Or. en

Justification

Historically, there has never been any default on intra-group exposures. The Basel II framework does not risk weight intra-group exposures. Thus a 0% risk weight is a correct reflection of the risk associated. However, in the current proposal a 0% risk weight is only allowed for domestic intra-group exposures and as a national discretion. Thus in order to remove competitive distortions within the Single Market, a 0% risk weight should be applied as a rule to all (EU and domestic) intra-group exposures to counterparties within the EU. The position of depositors and borrowers would be fully protected by the conditions, particularly condition (e). If intra-group exposures would have to be risk wieghted then it should be the same RW for both national and EU intra-group exposures.

Capital should not be held against intra-group non-capital exposures where risk is managed on an integrated basis and appropriate controls are in place over activities of subsidiaries. The zero weighting of cross-border intra-group exposures to connected counterparties will remove the capital differential between credit institutions in a particular national market depending on whether they are a home credit institution or one from another member state.


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Amendment by Gunnar Hökmark


7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1) , competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (1) to (8) of Article 57(1) , competent authorities shall exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

Or. en

Justification

It is essential that the 0% risk weight is applied as a rule to all intra-group exposures to counterparties within the EU. This is in line with the Single Market objectives.

Amendment by Bernhard Rapkay, Udo Bullmann


(7) Mit Ausnahme von Forderungen, die Verbindlichkeiten in Form der in Artikel 57 Absatz 1 Nummern 1-8 genannten Positionen begründen, können die zuständigen Behörden Forderungen eines Kreditinstituts gegenüber seinem Mutterunternehmen, seinem Tochterunternehmen oder einer Tochter seines Mutterunternehmens unter folgenden Voraussetzungen von Absatz 1 ausnehmen:

(7) Mit Ausnahme von Forderungen, die Verbindlichkeiten in Form der in Artikel 57 Absatz 1 Nummern 1-8 genannten Positionen begründen, können die zuständigen Behörden Forderungen eines Kreditinstituts in folgenden Fällen von Absatz 1 ausnehmen:

Or. de


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7. With the exception of exposures giving rise to liabilities in the form of the items referred to in points (a) to (h) of Article 57, competent authorities may exempt from the requirements of paragraph 1 of this Article the exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking, provided that the following conditions are met:

Or. en

Justification



Amendment 391Article 80, paragraph 7, point (a)

a) der Kontrahent ist ein Kreditinstitut oder eine Finanzholdinggesellschaft, ein Finanzinstitut, eine Vermögensverwaltungsgesellschaft oder ein Anbieter von Nebendienstleistungen und unterliegt angemessenen Aufsichtsvorschriften;

(a) Bei Forderungen eines Kreditinstituts gegenüber seinen Mutterunternehmen, seinem Tochterunternehmen, einer Tochter seines Mutterunternehmens oder gegenüber einem verbundenem Unternehmen im Sinne von Artikel 12 Absatz 1 der Richtlinie 83/349/EWG unter folgenden Voraussetzungen:

(i) der Kontrahent ist ein Kreditinstitut oder eine Finanzholdingsgesellschaft, ein Finanzinstitut, eine Vermögensverwaltungsgesellschaft oder ein Anbieter von Nebendienstleistungen und unterliegt angemessenen Aufsichtsvorschriften;

(ii) der Kontrahent ist wie das Kreditinstitut in die Vollkonsolidierung einbezogen;

(iii) bei den Kontrahenten werden die


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gleichen Risikobewertungs-, -mess- und -kontrollverfahren durchgeführt wie bei einem Kreditinstitut;

(iv) der Kontrahent hat seinen Sitz in dem gleichen Mitgliedstaat wie das Kreditinstitut;

(v) ein substanzielles oder rechtliches Hindernis für die unverzügliche Übertragung von Eigenmitteln vom Kontrahenten auf das Kreditinstitut oder die Rückzahlung von Verbindlichkeiten an das Kreditinstitut durch den Kontrahenten ist weder vorhanden noch abzusehen.

Or. de



b) der Kontrahent ist wie das Kreditinstitut in die Vollkonsolidierung einbezogen;

(b) Bei Forderungen eines Kreditinstituts gegenüber einem Kontrahenten, der Mitglied des selben Haftungsverbandes, namentlich nach Artikel 3 (1) der Richtlinie 94/19/EG oder entsprechend den Regelungen in Artikel 3 Absatz 1 Buchstabe (a) der Richtlinie 2000/12/EG, ist, unter den folgenden Voraussetzungen:

(i) der Kontrahent ist ein Kreditinstitut oder eine Finanzholdingsgesellschaft oder ein Finanzinstitut und unterliegt angemessenen Aufsichtvorschriften;

(ii) die Eigenmittel der dem Haftungsverbund angehörigen Institute werden nicht mehrfach mit Risiken belegt;

(iii) der Haftungsverbund verfügt über geeignete, einheitlich festgelegte Systeme der Risikobeobachtung und Risikoklassifizierung mit korrespondierenden Einwirkungsmöglichkeiten;

(iv) der Kontrahent hat seinen Sitz in dem gleichen Mitgliedstaat wie das


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Kreditinstitut;

(v) ein substanzielles oder rechtliches Hindernis für die unverzügliche Übertragung von Eigenmitteln auf den Kontrahenten oder die Rückzahlung von Verbindlichkeiten an das Kreditinstitut durch den Haftungsverbund ist weder vorhanden noch abzusehen; insbesondere wird die Liquidität und Solvenz der dem Haftungsverbund angeschlossenen Institute gewährleistet; der Haftungsverbund verfügt über die dazu erforderlichen Mittel.

Or. de


Amendment 393Article 80, paragraph 7, point (c)

(c) bei dem Kontrahenten werden die gleichen Risikobewertungs-, -mess- und -kontrollverfahren durchgeführt wie bei dem Kreditinstitut;

entfällt

Or. de



(d) der Kontrahent hat seinen Sitz in dem gleichen Mitgliedstaat wie das Kreditinstitut;

deleted

Or. de

Amendment by Gunnar Hökmark


(d) the counterparty is established in the (d) the counterparty is established within the


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same Member State as the credit institution;

EU;

Or. en

Justification

It is essential that the 0% risk weight is applied as a rule to all intra-group exposures to counterparties within the EU. This is in line with the Single Market objectives.

Amendment by Astrid Lulling


(d) elle est établie dans le même Etat membre que l'établissement de crédit;

(d) elle est établie dans un État membre;

Or. fr

Justification

Le paragraphe en question permet aux autorités compétentes d’exempter du calcul des montants pondérés des risques, les risques d’un établissement de crédit sur une contrepartie qui est son entreprise mère, sa filiale ou une filiale de son entreprise mère. Toutefois cette exemption est soumise à des conditions dont l’une au moins celle concernant le point d) est contraire au Traité alors qu’elle établit une discrimination des établissements de crédit filiales d’un groupe bancaire à l’intérieur de l’Union européenne en fonction de leur nationalité. Dans le cadre du marché intérieur il ne fait pas de sens de distinguer entre les risques d’un établissement de crédit sur une contrepartie qui est son entreprise mère, sa filiale ou une filiale de son entreprise mère, lorsque l’établissement de crédit en question est situé dans le même Etat membre que les autres entités du groupe précités ou lorsqu’il est situé dans un autre Etat membre.



(d) the counterparty is established in the same Member State as the credit institution;

(d) the counterparty is also established in the EU or a country member of the OECD;

Or. en


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Justification

A 0% risk weight is a correct reflection of the risk associated with intra-group exposures. In order to remove competitive distortions within the Single Market, a 0% risk weight should be applied as a rule to all intra-group exposures to counterparties within the EU.




deleted

Or. en

Justification

The aim of this amendment is to take into account the positive effects of the integration in the European banking sector ; in this respect, the possibility to apply a 0 % risk weight to certain types of intra-group exposures within the European union would not be subject to a criterium based on the national localisation of the relevant entities. In the same spirit, such a treatment would apply to mutual and cooperative banks.

Amendment by Pervenche Berès



deleted

Or. en

Justification

This amendment proposes a global approach to prudential neutrality concerning intra-group exposure. It suggests to apply the principle "same risks - same treatment" to consolidated groups not included in the wording of the European Commission, without changing the conditions for a 0-weighting.


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deleted

Or. en

Justification

See justification to Amendment to Article 80, paragraph 7 by P. Kauppi.




deleted

Or. en

Justification

Intragroup exposure and 0% risk weight should not be restricted to only parties within the same Member State



e) ein substanzielles oder rechtliches Hindernis für die unverzügliche Übertragung von Eigenmitteln vom Kontrahenten auf das Kreditinstitut oder die Rückzahlung von Verbindlichkeiten an

deleted


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das Kreditinstitut durch den Kontrahenten ist weder vorhanden noch abzusehen.

Or. de



(e) there is no current or foreseen material or legal impediment to the prompt transfer of own funds or repayment of liabilities from the counterparty to the credit institution.

(e) there is no current or foreseen material or legal impediment to the prompt transfer of own funds from the counterparty to the credit institution.

Or. en

Justification

See justification to Amendment to Article 80, paragraph 7 by P. Kauppi.



In einem solchen Fall wird ein Risikogewicht von 0 % zugeteilt.

In den vorgenannten Fällen wird ein Risikogewicht von 0% zugeteilt.

Or. de


Amendment 405Article 80, paragraph 7 a (new)

7a. Competent authorities may also apply a risk weight of 0 % to exposures of credit institutions which meet the following conditions:

(a) the requirements set out in points (a), (d) and (e) of paragraph 7;

(b) the credit institution and the obligors are participants in the same scheme which


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meets the requirements of Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit gurantee schemes1;;

(c) participants in the scheme referred to in point (b) are obliged to give advance notice of at least 24 months if they wish to leave the scheme;

(d) the multiple use of elements eligible for the calculation of own funds (multiple gearing) as well as any inappropriate creation of own funds between the members of the scheme referred to in point (b) shall be eliminated.

_________________1 OJ L 135, 31.5.1994, p. 5.

Or. en

Justification

In manchen Mitgliedstaaten haben Kreditinstitutsgruppen lange Tradition, die gesellschaftsrechtlich nicht als konsolidierungspflichtige Konzerne konstruiert sind. Die Mitgliedstaaten müssen abwägen, ob in diesen Gruppen ein solcher institutssichernder Haftungsverbund und ein konzernähnlicher Durchgriff auf die Gruppenmitglieder rechtlich und faktisch gegeben ist, der eine Gleichstellung was die Institutssicherung und die Eigenkapitalkonsolidierung mit Kreditinstituten anlangt, auf welche die Bestimmungen des Art. 80, paragraph 7, litera (b) and (c) zutreffen.



7a. National supervisors may also apply Article 80(7) to those banks, belonging to a joint liability scheme equal or similar to that under Article 3 point (a) of this directive or which complies with the provisions of Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit guarantee schemes1, which do not satisfy the


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requirements of points (b) and (c) of Article 80 paragraph 7, but which, owing to their structure, have a guarantee and liability system with a comparable risk profile with regard to their internal group lending. Any such comparability requires that

(a) a multiple use of supervisory capital is excluded;

(b) the scheme disposes of a suitable system for the monitoring of risks and possibilities to take influence.

______________1 OJ L 135, 31.5.1994, p. 5.

Or. en

Justification

The application of Article 80(7) should follow the principle of treating the same risks in the same way. Accordingly, banks adhering to certain liability and cross-guarantee schemes should be allowed to apply a 0%-weighting, if some essential safeguards are in place. Such option encourage smaller banks to organize in more sound and safer structures

Amendment by Wolf Klinz


7a. Die nationale Aufsicht kann auf in einem institutssichernden Haftungsverbund, der die Bestimmungen der Richtlinie 94/19/EG des Europäischen Parlaments und des Rates vom 30. Mai 1994 über Einlagensicherungssysteme1 erfüllt, zusammengeschlossene Banken Artikel 80 Absatz 7 ebenfalls anwenden. Voraussetzung hierfür ist, dass die Anforderungen unter paragraph 7 a-e erfüllt werden oder alternativ zu b mindestens einmal im Quartal eine einheitliche Verbundrechenschaftslegung (Bilanz, Gewinn- und Verlustrechnung, Lagebericht und Risikobericht) veröffentlicht wird sowie im Rahmen der Erfüllung der Anforderungen von Art. 80


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Abs. 7c die verbundinternen Ausfälle entsprechend Anhang VII Teil 4 Nummer 44a auf Verbundebene überwacht werden.

Or. de

Justification

Bankengruppen können auf eine Eigenkapitalunterlegung innerhalb der Gruppe verzichten, wenn bestimmte bankaufsichtliche Mindeststandards erfüllt sind, die in der Gesamtschau das Risiko erheblich herabsetzen. Die Freistellung von der Eigenkapitalunterlegung sollte auch auf Haftungsverbünde ausgedehnt werden, sofern diese eben diese bestimmten bankaufsichtlichen Mindeststandards erfüllen, wobei sie statt einer Vollkonsolidierung eine einheitliche Verbundrechenschaftslegung (Bilanz, Gewinn- und Verlustrechnung, Lage- und Risikobericht) vorlegen können.

Amendment by Othmar Karas


3. Ein Kreditinstitut, das eine Genehmigung zur Verwendung des IRB-Ansatzes beantragt, weist nach, dass es für die betreffenden IRB-Forderungsklassen seit mindestens drei Jahren Ratingsysteme verwendet, die den in diesem Anhang für die interne Risikomessung und das interne Risikomanagement genannten Mindestanforderungen im Grossen und Ganzen entsprechen. Dies gilt ab dem 31. Dezember 2010.

3. Ein Kreditinstitut, das eine Genehmigung zur Verwendung des IRB-Ansatzes beantragt, weist nach, dass es für die betreffenden IRB-Forderungsklassen seit mindestens zwei Jahren Ratingsysteme verwendet, die den in diesem Anhang für die interne Risikomessung und das interne Risikomanagement genannten Mindestanforderungen im Grossen und Ganzen entsprechen.

Or. de

Justification

Zur Erleichterung des Aufwandes wird die vorgeschlagene Änderung der Übergangsvorschriften begrüßt. Die vorgeschlagene Anpassung der Zeitreihenanforderungen sind aber nur dann sinnvoll, wenn gleichzeitig auch die Anforderungen hinsichtlich „broadly in line“ angepasst werden.


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3. Ein Kreditinstitut, das eine Genehmigung zur Verwendung des IRB-Ansatzes beantragt, weist nach, dass es für die betreffenden IRB-Forderungsklassen seit mindestens drei Jahren Ratingsysteme verwendet, die den in diesem Anhang für die interne Risikomessung und das interne Risikomanagement genannten Mindestanforderungen im Genossen und Ganzen entsprechen. Dies gilt ab dem 31. Dezember 2010.

3. Ein Kreditinstitut, das eine Genehmigung zur Verwendung des IRB-Ansatzes beantragt, weist nach, dass es für die betreffenden IRB-Forderungsklassen seit mindestens zwei Jahren Ratingsysteme verwendet, die den in diesem Anhang für die interne Risikomessung und das interne Risikomanagement genannten Mindestanforderungen im Genossen und Ganzen entsprechen.

Or. de

Justification

Die derzeitigen Historienanforderungen werden als zu streng angesehen. Die den Schätzungen zugrunde gelegten Beobachtungszeiträume sollen auf 2 Jahre verkürzt werden. Bei diesem Änderungsantrag handelt es sich um eine notwendige Ergänzung der vom Berichterstatter an anderen Stellen vorgeschlagenen Änderungsanträgen. ##



(4) Ein Kreditinstitut, das eine Genehmigung zur Verwendung eigener LGD-Schätzungen und/oder eigener Umrechnungsfaktoren beantragt, weist nach, dass es seine LGD-Schätzungen und Umrechnungsfaktoren seit mindestens drei Jahren in einer Weise verwendet, die den in diesem Anhang für die Nutzung eigener Schätzungen genannten Mindestanforderungen im Grossen und Ganzen entspricht. Dies gilt ab dem 31. Dezember 2010.

(4) Ein Kreditinstitut, das eine Genehmigung zur Verwendung eigener LGD-Schätzungen und/oder eigener Umrechnungsfaktoren beantragt, weist nach, dass es seine LGD-Schätzungen und Umrechnungsfaktoren seit mindestens zwei Jahren in einer Weise verwendet, die den im Anhang VII, Teil 4, für die Nutzung eigener Schätzungen genannten Mindestanforderungen im Grossen und Ganzen entspricht.

Or. ##


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##

Justification

##



(a) exposures to regional governments and local authorities which are treated as exposures to central governments under Subsection 1;

(a) exposures to regional governments, local authorities or public sector entities which are treated as exposures to central governments under Subsection 1;

Or. en

Justification




(a) they shall be either to an individual person or persons, or to a small or medium sized entity, provided in the latter case that the total amount owed to the credit institution and to any parent undertaking and its subsidiaries by the obligor client or group of connected clients does not, to the knowledge of the credit institution, which must have taken reasonable steps to confirm the situation, exceed EUR 1 million;

(a) they shall be either to an individual person or persons, or to a small or medium sized entity, provided in the latter case that the total amount owed to the credit institution and to any parent undertaking and its subsidiaries by the obligor client or group of connected clients, but excluding claims or contingent claims secured on real estate property, does not, to the knowledge of the credit institution, which must have taken reasonable steps to confirm the situation, exceed EUR 1 million;

Or. en


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Justification

In order to be eligible for the retail treatment for both the standardised and IRB approaches, credit institutions are forced to demonstrate that their aggregate exposures to one counterparty are below €1m. However, it is not clear whether mortgage loans should be included in the aggregation calculation or whether they are treated separately. Aggregating all counterparties’ exposures to include credit cards, small business loans, overdrafts and mortgages could in many cases prove impossible, given that these exposures can span a number of subsidiaries, a number of systems and a number of countries. Moreover, it does not reflect the way in which credit institutions distinguish between retail and corporate exposures. This requirement could potentially restrict the availability of funding to SMEs compared to current underwriting practices. Therefore, mortgage lending ought to be excluded from the aggregation calculation for the retail treatment.

Amendment by José Manuel García-Margallo y Marfil



(a) they shall be either to an individual person or persons, or to a small or medium sized entity, provided in the latter case that the total amount owed to the credit institution and to any parent undertaking and its subsidiaries by the obligor client or group of connected clients, but excluding claims or contingent claims secured on real estate property, does not, to the knowledge of the credit institution, which must have taken reasonable steps to confirm the situation, exceed EUR 3 million. Exposures to personal investment companies established solely for the purposes of managing the finances of a person or persons shall be treated in the same way as if the exposure were provided directly to the person or persons concerned.

Or. en



a) they shall be either to an individual person or persons, or to a small or medium sized

(a) they shall be either to an individual person or persons, or to a small or medium


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entity, provided in the latter case that the total amount owed to the credit institution and to any parent undertaking and its subsidiaries by the obligor client or group of connected clients, does not, to the knowledge of the credit institution, which must have taken reasonable steps to confirm the situation, exceed EUR 1 million;

sized entity, provided in the latter case that the total amount owed to the credit institution and to any parent undertaking and its subsidiaries by the obligor client or group of connected clients, but excluding claims or contingent claims secured on residential real estate property does not, to the knowledge of the credit institution, which must have taken reasonable steps to confirm the situation, exceed EUR 1 million;

Or. en

Justification

In order to be eligible for the retail treatment for both the standardised and IRB approaches, credit institutions are forced to demonstrate that their aggregate exposures to one counterparty are below € 1m. This poses a number of fundamental and practical issues and does not reflect the way in which institutions distinguish between retail and corporate exposures. Therefore, mortgage lending to be excluded from the aggregation calculation for the retail treatment.



a) sie richten sich entweder an eine Einzelperson/an Einzelpersonen oder ein kleines oder mittleres Unternehmen, wobei in letztgenanntem Fall der dem Kreditinstitut und gegebenenfalls dem Mutterunternehmen und dessen Tochtergesellschaften von dem Kunden oder der Gruppe verbundener Kunden insgesamt geschuldete Betrag nach Wissen des Kreditinstituts nicht über eine Mio. EUR hinausgehen darf; das Kreditinstitut hat angemessene Schritte unternommen, um sich von der Richtigkeit seines Kenntnisstands zu überzeugen;

(a) sie richten sich entweder an eine Einzelperson/an Einzelpersonen oder ein kleines oder mittleres Unternehmen, wobei in letztgenanntem Fall der dem Kreditinstitut und gegebenenfalls dem Mutterunternehmen und dessen Tochtergesellschaften von dem Kunden oder der Gruppe verbundener Kunden insgesamt geschuldete Betrag nach Wissen des Kreditinstituts nicht über 2,5 Mio. EUR hinausgehen darf; das Kreditinstitut hat angemessene Schritte unternommen, um sich von der Richtigkeit seines Kenntnisstands zu überzeugen. Der Zeitwert von Retail-Mindestleasingzahlungen kann der Forderungsklasse der Retail-Forderungen zugeordnet werden.

Or. de


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Justification

Die vorgeschlagene Begrenzung ist zu eng. Sie hätte einen negativen Einfluss auf kleine Banken und könnte die Verfügbarkeit von Krediten für KMU einschränken. Ferner soll der Zeitwert von Retail-Mindestleasingzahlungen als den Retail-Forderungen oder der Forderungsklasse der bedingten Retail-Forderungen zugeordnet betrachtet werden, um sicherzustellen, dass die Konsistenz bei allen Ansätzen gegeben ist.

Amendment by Jonathan Evans



(a) they shall be either to an individual person or persons, or to a small or medium sized entity, provided in the latter case that the total amount owed to the credit institution and to any parent undertaking and its subsidiaries by the obligor client or group of connected clients does not, to the knowledge of the credit institution, which must have taken reasonable steps to confirm the situation, exceed EUR 1 million. Exposures to personal investment companies established solely for the purposes of managing the finances of a person or persons shall be treated in the same way as if the exposure were provided directly to the person or persons concerned;

Or. en

Justification




(a) they shall be either to an individual person or persons, or to a small or medium

(a) they shall be consistently managed and treated as a retail exposure by the credit


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sized entity, provided in the latter case that the total amount owed to the credit institution and to any parent undertaking and its subsidiaries by the obligor client or group of connected clients does not, to the knowledge of the credit institution, which must have taken reasonable steps to confirm the situation, exceed EUR 1 million;

institution;

Or. en

Justification

The Commission proposal does not reflect market practice and will result in significant additional costs without corresponding prudential benefits. It will particularly impact smaller banks and could restrict the availability of funding to SMEs. The proposed change reinforces the Basel Framework, which recognises that banks should not be forced to develop extensive new information systems simply for the purpose of ensuring perfect compliance [Basel Framework, paragraph 231].



(b) they are treated by the credit institution in its risk management consistently over time and in a similar manner;

deleted

Or. en

Justification

The Commission proposal does not reflect market practice and will result in significant additional costs without corresponding prudential benefits. It will particularly impact smaller banks and could restrict the availability of funding to SMEs. The proposed change reinforces the Basel Framework, which recognises that banks should not be forced to develop extensive new information systems simply for the purpose of ensuring perfect compliance [Basel Framework, paragraph 231].




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(d) they each represent one of a significant number of similarly managed exposures.

(d) they each represent one of a number of similarly managed exposures.

Or. en

Justification

The use of the phrase “significant number of …exposures” may preclude small banks from classifying portfolios as retail. Deletion of “significant” puts the emphasis on diversity of risk within a portfolio of assets with similar characteristics.



(d) they each represent one of a significant number of similarly managed exposures.

(d) they each represent one of a number of similarly managed exposures.

Or. en


Amendment 421Article 86, paragraph 4, subparagraph 1 a (new)

The present value of retail minimum lease payments is eligible for the retail exposure class.

Or. en

Justification

The present value of retail minimum lease payments should be considered as belonging to the retail claims or contingent retail claims class in order to guarantee consistency.



6. Within the corporate exposure class, 6. Within the corporate exposure class,


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credit institutions shall separately identify as specialised lending exposures, exposures which possess the following characteristics:

credit institutions shall separately identify specialised lending. The five sub-classes of specialised lending are project finance, object finance, commodities finance, income-producing real estate and high-volatility commercial real estate. Each of these sub-classes is defined as follows:

Or. en

Justification

The omission from the Directive Text of Basel’s specific definitions of the specialised lending sub-classes could lead to inconsistent application and therefore competitive inequality between Member States and between the European Union and other jurisdictions.



(a) the exposure is to an entity which was created specifically to finance and/or operate physical assets;

(a) Project finance is a method of funding in which the lender looks primarily to the revenues generated by a single project, both as the source of repayment and as security for the exposure.

Or. en

Justification

See justification to Amendment to Article 86, paragraph 6 by J. Evans.



(b) the contractual arrangements give the lender a substantial degree of control over the assets and the income that they generate;

(b) Object finance refers to a method of funding the acquisition of physical assets where the repayment of the exposure is dependent on the cash flows generated by the specific assets that have been financed and pledged or assigned to the lender.


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Or. enJustification




(c) the primary source of repayment of the obligation is the income generated by the assets being financed, rather than the independent capacity of a broader commercial enterprise.

(c) Commodities finance refers to structured short-term lending to finance reserves, inventories, or receivables of exchange-traded commodities where the exposure will be repaid from the proceeds of the sale of the commodity and the borrower has no independent capacity to repay the exposure.

Or. en

Justification



Amendment 426Article 86, paragraph 6, point (c a) (new)

(ca) Income-producing real estate refers to a method of providing funding to real estate where the prospects of repayment and recovery on the exposure depend primarily on the cash flows generated by the asset.

Or. en

Justification



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Amendment 427Article 86, paragraph 6, point (c b) (new)

(cb) High-volatility commercial real estate lending is the financing of commercial real estate that exhibits higher loss rate volatility (i.e. higher asset correlation) compared to other types of specialised lending.

Or. en

Justification




8. The exposure class referred to in point (g) of paragraph 1 shall include the residual value of leased properties, if not covered elsewhere in this Directive.

8. The exposure class referred to in point (g) of paragraph 1 shall include the residual value of leased properties when the risk on this residual value is not transferred to the lessee. Conversely, when this risk is transferred to the lessee, it is a credit obligation of the lessee which must be treated accordingly.

Or. en

Justification

By definition and according to the international accounting rules, a financial lease is a financing contract whereby the risk of the residual value is transferred to the lessee. Hence, the residual value must be treated exactly as the other instalments, i.e. with a credit risk weighting and not an “other asset” risk weight. The Basel Accord clearly identifies the risk on residual value, which is a credit obligation when this risk is transferred to the lessee or belongs to the “other asset” category when the risk is kept by the lender. Unfortunately, probably by oversight, this distinction has been dropped in the Directive and must be reinserted.


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8. The exposure class referred to in point (g) of paragraph 1 shall include the residual value of leased properties, if not covered elsewhere in this Directive.

8. The exposure class referred to in point (g) of paragraph 1 shall include the residual value of leased properties, if not included in the lease exposure as defined in Annex VII, part 3, paragraph 4.

Or. en

Justification

This amendment is linked to my amendment to Annex VII, part 3, paragraph 4 on lease payments.



2. The risk-weighted exposure amounts for dilution risk for purchased receivables shall be calculated according to Annex VII, part 1, paragraph 26.

2. The risk-weighted exposure amounts for dilution risk for purchased receivables shall be calculated according to Annex VII, part 1, paragraph 26. However, firms may treat Invoice Discounting and Factoring as secured lending in which case the provisions of Articles 87 and 88 relating to purchased receivables shall not apply.

Or. en

Justification

The Basel Committee did not intend to capture Factoring and Invoice Discounting business within the Purchased Receivables approach. These changes are required to enable firms to adopt the more appropriate corporate secured lending approaches for such product groups. If the Directive remains unchanged and is applied literally by member states, it would pose a significant risk to SME liquidity.


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4. Notwithstanding paragraph 3, the calculation of risk-weighted exposure amounts for credit risk for all exposures belonging to the exposure class referred to in point (e) of Article 86(1) shall be calculated in accordance with Annex VII, part 1, paragraphs 15 to 24 subject to approval of competent authorities. Competent authorities shall only allow a credit institution to use the approach set out in Annex VII, part 1, paragraphs 24 to 25, if the credit institution meets the minimum requirements Annex VII, part 4, paragraphs 114 to 122.

4. Notwithstanding paragraph 3, the calculation of risk-weighted exposure amounts for credit risk for all exposures belonging to the exposure class referred to in point (e) of Article 86(1) shall be calculated in accordance with Annex VII, part 1, paragraphs 15 to 24 subject to approval of competent authorities. Competent authorities shall only allow a credit institution to use the approach set out in Annex VII, part 1, paragraphs 23 and 24, if the credit institution meets the minimum requirements Annex VII, part 4, paragraphs 114 to 122.

Or. en

Justification




5. Notwithstanding paragraph 3, the calculation of risk weighted exposure amounts for credit risk for specialised lending exposures may be calculated in accordance with Annex VII, part 1, paragraph 5. Competent authorities shall publish guidance on how institutions should assign risk weights to specialised lending exposures under Annex VII, part 1, paragraph 5 and shall approve institutions assignment methodologies.

5. Notwithstanding paragraph 3, the calculation of risk weighted exposure amounts for credit risk for specialised lending exposures may be calculated in accordance with Annex VII, part 1, paragraph 5. Competent authorities shall publish guidance on how credit institutions should assign risk weights to specialised lending exposures under Annex VII, part 1, paragraph 5 and shall approve institutions assignment methodologies.

Or. en


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Justification




11. Where exposures to a collective investment undertaking (CIU) meet the criteria set out in Annex VI, part 1, paragraphs 74 to 75 and the credit institution is aware of all of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this Subsection.

11. Where exposures in the form of a collective investment undertaking (CIU) meet the criteria set out in Annex VI, part 1, paragraphs 74 to 75 and the credit institution is aware of all of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this Subsection.

Or. en

Justification

The CIU treatment should refer to a situation in which a bank holds a stake in a CIU; this is evidenced by the fact that the CIU approach approximates the equity approach. However, the wording "exposures to CIU" can be interpreted as including exposures that banks have to CIUs (mainly derivatives).



11. Where exposures to a collective investment undertaking (CIU) meet the criteria set out in Annex VI, part 1, paragraphs 74 to 75 and the credit institution is aware of all of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this

11. Where exposures in the form of a collective investment undertaking (CIU) meet the criteria set out in Annex VI, part 1, paragraphs 74 to 75 and the credit institution is aware of all of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this


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Subsection. Subsection.

Or. en

Justification

The CIU treatment as described clearly points to a situation in which a bank holds a stake in a CIU; this is evidenced by the fact that the CIU approach approximates the equity approach. However, the wording ‘exposures to CIU’ can be interpreted as including exposures that banks have to CIUs (mainly derivatives). It would be more appropriate and consistent to require that exposures to CIUs get a normal IRB treatment, i.e. that banks use their own validated rating models for CIUs and use the normal IRB treatment for exposure calculation (i.e. Potential future exposure plus add-on approach for derivatives). Given that (a) the earlier consultation papers on the treatment of CIUs and (b) the equivalent part in the Standardised approach pertaining to CIUs indeed mention ‘exposures in the form of CIUs’, the wording ‘exposures to’ was probably brought in unintentionally and should therefore be changed in “exposures in the form of CIU”.



11. Where exposures to a collective investment undertaking (CIU) meet the criteria set out in Annex VI, part 1, paragraphs 74 to 75 and the credit institution is aware of all of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this Subsection.

11. Where exposures in the form of a collective investment undertaking (CIU) meet the criteria set out in Annex VI, part 1, paragraphs 74 to 75 and the credit institution is aware of all of the underlying exposures of the CIU, the credit institution shall look through to those underlying exposures in order to calculate risk-weighted exposure amounts and expected loss amounts in accordance with the methods set out in this Subsection. Credit institutions may rely on a third party to make this calculation, provided that the correctness of the calculation and the report is adequately ensured.

Or. en

Justification

The CIU treatment refers to a situation in which a bank holds a stake in a CIU. However, the wording ‘exposures to CIU’ can be interpreted as including exposures that banks have to CIUs (mainly derivatives). It would be more appropriate and consistent to require that


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exposures to CIUs get a normal IRB treatment, i.e. that banks use their own validated rating models for CIUs and use the normal IRB treatment for exposure calculation (i.e. Potential Future Exposure plus add-on approach for derivatives). Given that (a) the earlier consultation papers on the treatment of CIUs and (b) the equivalent part in the Standardised approach pertaining to CIUs indeed mention ‘exposures in the form of CIUs’, the wording ‘exposures to’ was probably brought in unintentionally and should therefore be changed in ‘exposures in the form of CIU’.

It is proposed to allow credit institutions wishing to use the IRB Approach to rely on a third party to calculate risk-weighted exposure amounts and expected loss amounts, given that credit institutions may rely on a third party to calculate and report an average risk weight for the CIU under the Standardised Approach (see paragraph 78 in Annex VI of Directive 2000/12/EC) as well as under the IRB approach where credit institutions are not aware of all of the underlying exposures of the CIU (see Article 87, paragraph 12, subparagraph 2 of Directive 2000/12/EC).


Amendement 436 Article 87, paragraph 11, subparagraph 2, point (b)

b) for all other underlying exposures, the approach set out in Subsection 1, subject to the following modifications:

(b) for all other underlying exposures, the approach set out in Subsection 1.

i) the exposures are assigned to the appropriate exposure class and attributed the risk weight of the credit quality step immediately above the credit quality step that would normally be assigned to the exposure;ii) exposures assigned to the higher credit quality steps, to which a risk weight of 150% would normally be attributed, are assigned a risk weight of 200%.

Or. en

Justification

Where there is insufficient information to apply IRB to CIUs it is unreasonable to require a treatment worse than the standardised approach in respect of the CIU. The proposed amendment would enable to use the standardised approach where there is insufficient information to use IRB, thereby allowing to attribute risk weights according to the class to which exposures belong.


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12. Where exposures to a CIU do not meet the criteria set out in Annex VI, part 1, paragraphs 74 and 75, or the credit institution is not aware of all of the underlying exposures of the CIU, the credit institution shall look through to the underlying exposures and calculate risk-weighted exposure amounts and expected loss amounts in accordance with the approach set out in Annex VII, part 1, paragraphs 17 to 19. If, for those purposes, the credit institution is unable to differentiate between private equity, exchange-traded and other equity exposures, it shall treat the exposures concerned as other equity exposures. For these purposes, non equity exposures are assigned to one of the classes (private equity, exchange traded equity or other equity) set out in Annex VII, part 1, paragraph 17 and unknown exposures are assigned to other equity class.

12. Where exposures in the form of a CIU do not meet the criteria set out in Annex VI, part 1, paragraphs 74 and 75, or the credit institution is not aware of all of the underlying exposures of the CIU, the credit institution shall look through to the underlying exposures and calculate risk-weighted exposure amounts and expected loss amounts in accordance with the approach set out in Annex VII, part 1, paragraphs 17 to 19. If, for those purposes, the credit institution is unable to differentiate between private equity, exchange-traded and other equity exposures, it shall treat the exposures concerned as other equity exposures. For these purposes, non equity exposures are assigned to the relevant exposure class and unknown exposures are assigned to other equity class.

Or. en

Justification

Non equity exposures should be mapped to the appropriate risk class rather than one of the equity classes (private equity, exchange traded equity, other equity).



12. Where exposures to a CIU do not meet the criteria set out in Annex VI, part 1, paragraphs 74 and 75, or the credit institution is not aware of all of the underlying exposures of the CIU, the credit institution shall look through to the underlying exposures and calculate risk-weighted exposure amounts and expected

12. Where exposures in the form of a CIU do not meet the criteria set out in Annex VI, part 1, paragraphs 74 and 75, or the credit institution is not aware of all of the underlying exposures of the CIU, the credit institution shall look through to the underlying exposures and calculate risk-weighted exposure amounts and expected


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loss amounts in accordance with the approach set out in Annex VII, part 1, paragraphs 17 to 19. If, for those purposes, the credit institution is unable to differentiate between private equity, exchange-traded and other equity exposures, it shall treat the exposures concerned as other equity exposures. For these purposes, non equity exposures are assigned to one of the classes (private equity, exchange traded equity or other equity) set out in Annex VII, part 1, paragraph 17 and unknown exposures are assigned to other equity class..

loss amounts in accordance with the approach set out in Annex VII, part 1, paragraphs 17 to 19. If, for those purposes, the credit institution is unable to differentiate between private equity, exchange-traded and other equity exposures, it shall treat the exposures concerned as other equity exposures. For these purposes, non equity exposures are assigned to one of the classes (private equity, exchange traded equity or other equity) set out in Annex VII, part 1, paragraph 17 and unknown exposures are assigned to other equity class.

Or. en

Justification

See Amendment to Article 87, paragraph 11 of Ms Kauppi.



12. Where exposures to a CIU do not meet the criteria set out in Annex VI, part 1, paragraphs 74 to 75, or the credit institution is not aware of all of the underlying exposures of the CIU, the credit institution shall look through to the underlying exposures and calculate risk-weighted exposure amounts and expected loss amounts in accordance with the approach set out in Annex VII, part 1, paragraphs 17 to 19. If, for those purposes, the credit institution is unable to differentiate between private equity, exchange-traded and other equity exposures, it shall treat the exposures concerned as other equity exposures. For these purposes, nonequity exposures are assigned to one of the classes (private equity, exchange traded equity or other equity) set out in Annex VII, part 1, paragraph 17 and unknown exposures are assigned to other equity class.

12. Where exposures in the form of a CIU do not meet the criteria set out in Annex VI, part 1, paragraphs 74 and 75, or the credit institution is not aware of all of the underlying exposures of the CIU, the credit institution shall look through to the underlying exposures and calculate risk-weighted exposure amounts and expected loss amounts in accordance with the approach set out in Annex VII, part 1, paragraphs 17 to 19. If, for those purposes, the credit institution is unable to differentiate between private equity, exchangetraded and other equity exposures, it shall treat the exposures concerned as other equity exposures. For these purposes, non-equity exposures are assigned to the relevant exposure class and unknown exposures are assigned to other equity class.


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Or. en

Justification

The CIU treatment as described clearly points to a situation in which a bank holds a stake in a CIU; this is evidenced by the fact that the CIU approach approximates the equity approach. However, the wording ‘exposures to CIU’ can be interpreted as including exposures that banks have to CIUs (mainly derivatives). It would be more appropriate and consistent to require that exposures to CIUs get a normal IRB treatment, i.e. that banks use their own validated rating models for CIUs and use the normal IRB treatment for exposure calculation (i.e. Potential future exposure plus add-on approach for derivatives). Given that (a) the earlier consultation papers on the treatment of CIUs and (b) the equivalent part in the Standardised approach pertaining to CIUs indeed mention ‘exposures in the form of CIUs’, the wording ‘exposures to’ was probably brought in unintentionally and should therefore be changed in “exposures in the form of CIU”.

As an additional attention point for paragraph 12, non equity exposures should be mapped to the appropriate risk class rather than one of the equity classes (private equity, exchange traded equity, other equity).


Amendement 440 Article 87, paragraph 12, subparagraph 2, point (b)

b) for all other underlying exposures, the approach set out in Subsection 1, subject to the following modifications:

(b) for all other underlying exposures, the approach set out in Subsection 1.

i) the exposures are assigned to the appropriate exposure class and attributed the risk weight of the credit quality step immediately above the credit quality step that would normally be assigned to the exposure;ii) exposures assigned to the higher credit quality steps, to which a risk weight of 150% would normally be attributed, are assigned a risk weight of 200%.

Or. en

Justification

Where there is insufficient information to apply IRB to CIUs it is unreasonable to require a treatment worse than the standardised approach in respect of the CIU. The proposed


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amendment would enable to use the standardised approach where there is insufficient information to use IRB, thereby allowing to attribute risk weights according to the class to which exposures belong.



12a. Alternatively to the methods described under paragraphs 11 and 12 for CIUs, in the case a full look through approach is either impossible or inappropriate to implement, an Internal or Ratings based Approach may be used with the approval of the competent authority.

Or. en

Justification

The current text in points 11 and 12 calls for a “full look through” approach to the underlying exposures of a CIU, which is impossible to implement in many cases and inappropriate in case of credit exposure to the CIUs themselves. The aim is to achieve a simpler solution than a “full look through” method each time the institution may demonstrate to its supervisor the validity of its internal approach.


Amendement 442 Article 89, paragraph 1, point (b a) (new)

ba) Forderungen, die die Bedingungen des Artikels 79 Absatz 2 erfüllen und 50 000 Euro nicht überschreiten.

Or. de

Justification

Bei kleineren Krediten könnte die Errichtung eines bankenaufsichtlichen Ratingsystems im Einzelfall unverhältnismäßig erscheinen.


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Amendement 443 Article 89, paragraph 1, point (e)

e) exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking provided that the counterparty is an institution or a financial holding company, financial institution, asset management company or ancillary services undertaking subject to appropriate prudential requirements

(e) exposures of a credit institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking provided that the counterparty is an institution or a financial holding company, financial institution, asset management company or ancillary services undertaking subject to appropriate prudential requirements or an undertaking linked by a relationship within the meaning of Article 12(1) of Directive 83/349/EEC and exposures between credit institutions which meet the requirements set out in Article 80(7a).

Or. en

Justification

Hour-glass structured banking groups (cf justification to amendment 3) and non-consolidating banking groups which comply with solvency guarantees as stipulated in amendment (20) should be eligible for IRB approaches.


Amendment 444Article 89, paragraph 1, point (f)

f) equity exposures to entities whose credit obligations qualify for a zero risk weight under Subsection 1 (including those publicly sponsored entities where a zero weight can be applied).

(f) equity exposures to entities whose credit obligations qualify for a zero risk weight under Subsection 1 (including those publicly sponsored entities where a zero risk weight can be applied).

Or. en

Justification



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Amendement 445 Article 89, paragraph 1, point (g a) (new)

ga) exposures to a collective investment undertaking (CIU), where the CIU meets with the criteria set out in Annex VI, part 1, paragraphs 74 to 75, and has a non-significant equity exposure (less than 10%).

Or. en

Justification

Requiring IRB credit institutions to calculate the risk weight by looking through to all the underlying investments of the CIU would be unduly detrimental to CIUs because one of the main advantages of investing in CIUs – booking the CIU as a single investment item instead of booking the securities into which the CIU invests – would be unduly lost. It is therefore proposed to allow credit institutions using the IRB Approach to use the “partial-use„ methods set in the Standardised Approach to calculate the risk weight for the regulated collective investment vehicles (UCITS) with non-significant exposure to equity claims. By referring to CIUs with a non-significant equity exposure, this amendment limits the scope of the amendment in order to take care of the Commission’s view expressed in Article 89, paragraph 1 (c), that significant exposure to equity claims should be treated in accordance with the methods set out in the IRB Approach.



ga) State and State-reinsured guarantees pursuant to Annex VIII, part 2, paragraph 18.

Or. en

Justification

Cross reference error. Substitution of am 44 of the Radwan draft report.


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ga) ”the exposure class referred to in point (d) of Art 86 (1)”

Or. en

Justification

This amendment extends the possible application of partial use (IRB bank can apply the standardized approach to certain credit segments) to the retail exposures.

The rating procedure for retail exposures in the foundation IRB is much more sophisticated than the internal rating process for other exposure classes (e.g. retail loans: LGD-estimates for pools.)

In the Foundation IRB for other debtors, banks will have to estimate only the Probability of Default (PD), LGD-values are already fixed in Annex VII so that banks do not have to estimate them (see Art 87 par 8)

However for retail loans banks will have to estimate also LGD-values and other parameters for the pool or facility grade an exposure is allocated to (Art 87 par. 7) which will make the rating process for retail loans more costly than the rating for other debtors (for the allocation the bank will de facto have to estimate these parameters for every loan); This would have the paradox effect that for smaller loans (e.g. 50.000 €) the rating procedure could be more complex and more sophisticated than for larger loans (e.g. loan exposure of 5 Mio €).

Besides smaller companies are not able to deliver up to date business information and financial statements (”hard facts” as an input in the rating) at any time they are requested to.

An option for partial use for retail exposures would reduce the complexity and therefore the costs for the rating of small sized business and private loans. The proposed amendment is in line with the EU’s policy of promoting a more favourable environment in Europe for access by small enterprises and entrepreneurs to finance and micro credit.



2a. Forderungen, die im Zuge von Unternehmensgründungen und –nachfolgen entstehen, können generell mit 75 % gewichtet werden.


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Or. de

Justification

Die besondere wirtschaftspolitische Bedeutung von Unternehmensneugründungen und Betriebsnachfolgen, auch für die Erreichung des prioritären politischen Ziels der Union, des Lissabonziels – mehr Wachstum und Beschäftigung – rechtfertigt die vorgeschlagene Sonderbehandlung. Bei einer Besicherung würde sich eine entsprechend niedrigere Gewichtung ergeben.



4. In the case of funded credit protection, the lending credit institution shall have the right to liquidate or retain, in a timely manner, the assets from which the protection derives in the event of the default, insolvency or bankruptcy - or other credit event set out in the transaction documentation - and, where applicable, of the custodian holding the collateral. The degree of correlation between the value of the assets relied upon for protection and the credit quality of the borrower must not be undue.

4. In the case of funded credit protection, the lending credit institution shall have the right to liquidate or retain, in a timely manner, the assets from which the protection derives in the event of the default, insolvency or bankruptcy of the obligor - or other credit event set out in the transaction documentation - and, where applicable, of the custodian holding the collateral. The degree of correlation between the value of the assets relied upon for protection and the credit quality of the obligor must not be undue.

Or. en

Justification



Amendement 450Article 93 a (new)

Artikel 93a

Fungiert ein Kreditinstitut als Sicherungsgeber, ergibt sich die Kapitalanforderung hieraus gemäß den


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folgenden Grundsätzen.

a) Bei einer Absicherung ohne Sicherheitsleistung hat der Sicherungsgeber seine Kapitalanforderung so zu ermitteln, als ob das übernommene Kreditrisiko aus einem direkten Engagement stammen würde.

b) Bei einer Absicherung mit Sicherheitsleistung und sofern das Kreditinstitut in einer solchen Konstruktion neben dem Risiko des Ausfalls des besicherten Kredits auch das Risiko eines möglichen Ausfalls des Sicherungsnehmers und/oder der Sicherheitsleistung trägt, hat es wie folgt zu verfahren:

(i) liegt für die Absicherungskonstruktion mit Sicherheitsleistung ein externes Rating einer anerkannten Ratingagentur vor, das alle relevanten Ausfallrisiken aus Sicht des Sicherungsgebers berücksichtigt, so werden die in den Artikeln 78 bis 83 vorgeschriebenen Risikogewichte angewandt.

(ii) Liegt für das Produkt kein Rating einer anerkannten Ratingagentur vor, so werden die Risikogewichte bezüglich des abgesicherten Kreditverhältnisses, des Sicherungsnehmers und der Sicherheitsleistung aggregiert und mit dem Nominalbetrag der Sicherheitsleistung multipliziert, um den risikogewichteten Forderungsbetrag zu ermitteln.

(iii) Die Aggregation des Risikogewichtes der Sicherheitsleistung entfällt, wenn das Kreditinstitut diese bereits als anrechnungspflichtige Position berücksichtigt.

(iv) Sollte durch die rechtliche Ausgestaltung der Absicherung mit Sicherheitsleistung ein Verlust für den Sicherungsgeber im Falle des Ausfalls der Sicherungsnehmers ausgeschlossen sein (z.B. durch die Leistung der Sicherheit an eine Zweckgesellschaft), kann bei der Aggregation das Risikogewicht des


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Sicherungsnehmers vernachlässigt werden. Sollten sich aus der rechtlichen Ausgestaltung neue Ausfallrisiken ergeben (z.B. Anlage einer Barsicherheit durch einen Zweckgesellschaft in Wertpapiere) so sind diese bei der Aggregation zu berücksichtigen.

(v) Das sich durch die Aggregation ergebende vom Sicherungsgeber anzusetzende Risikogewicht ist auf 1250% begrenzt.

Or. de

Justification

Der Richtlinienvorschlag enthält (analog zum Baseler Rahmenwerk) mit zwei kleineren Ausnahmen keine Aussagen über die Kapitalanforderungen für Sicherungsgeber. Um Wettbewerbsgleichheit zu gewährleisten wird ein harmonisierte Regelung vorgeschlagen, die sich an der Systematik der Kreditabsicherung für einen Forderungskorb orientiert.



Where a credit institution uses the Standardised Approach set out in Subsection 1 for the calculation of risk-weighted exposure amounts for the exposure class to which the securitised exposures would be assigned under Article 79, it shall calculate the risk-weighted exposure amount for a securitisation position in accordance with Annex IX, part 4, paragraphs 6 to 35.

Where a credit institution uses the Standardised Approach set out in Articles 78 to 83 for the calculation of risk-weighted exposure amounts for the exposure class to which the securitised exposures would be assigned under Article 79, it shall calculate the risk-weighted exposure amount for a securitisation position in accordance with Annex IX, part 4, paragraphs 1 to 35.

Or. en

Justification



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In all other cases, it shall calculate the risk-weighted exposure amount in accordance with Annex IX, part 4, paragraphs 36 to 74.

In all other cases, it shall calculate the risk-weighted exposure amount in accordance with Annex IX, part 4, paragraphs 1 to 5 and 36 to 74.

Or. en

Justification



Amendement 453Article 100, paragraph 2

2. For those purposes, a revolving exposure shall be an exposure whereby a customer may vary the amount drawn within an agreed limit, and an early amortisation provision shall be a contractual clause which requires, on the occurrence of defined events, investors’ positions to be redeemed before the originally stated maturity of the securities issued.

2. For those purposes, a revolving exposure shall be an exposure whereby customers outstanding balances are permitted to fluctuate based on their decisions to borrow and repay, up to an agreed limit, and an early amortisation provision shall be a contractual clause which requires, on the occurrence of defined events, investors’ positions to be redeemed before the originally stated maturity of the securities issued.

Or. en

Justification

The current wording could imply that revolving exposures includes mortgages where customers can draw amounts up to an agreed limit. The proposed amendment also ensures consistency with the definition of revolving exposures in Annex VII, part 1 and paragraph 11.




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1. An originator credit institution or sponsor credit institution shall not, with a view to reducing potential or actual losses to investors, provide support to the securitisation beyond its contractual obligations.

1. If an originator or sponsor credit institution provides support to a securitisation beyond its contractual obligations, it shall inform the competent authority and all parties involved in the transaction and hold capital against all of the securitised exposures as if they had not been securitised.

Or. en

Justification

The current wording makes it illegal to provide non-contractual support and requires public disclosure of any transgression. This is very severe language for what could be a commercial decision to support an investor. Competent authorities have a range of enforcement powers and can take action if a credit institution knowingly understates risk and its capital requirement or if it is regularly providing noncontractual support.



1. An originator credit institution or sponsor credit institution shall not, with a view to reducing potential or actual losses to investors, provide support to the securitisation beyond its contractual obligations.

1. If an originator or sponsor credit institution provides support to a securitisation beyond its contractual obligations, it shall inform the competent authority and all parties involved in the transaction and hold capital against all of the securitised exposures as if they had not been securitised.

Or. en

Justification

The current wording makes it illegal to provide non-contractual support and requires public disclosure of any transgression. This is very severe language for what could be a commercial decision to support an investor. Competent authorities have a range of enforcement powers and can take action if a credit institution knowingly understates risk and its capital requirement or if it is regularly providing non-contractual support.


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2. If an originator credit institution or a sponsor credit institution fails to comply with paragraph 1 in respect of a securitisation, the competent authority shall require it at a minimum, to hold capital against all of the securitised exposures as if they had not been securitised. The credit institution shall disclose publicly that it has provided non-contractual support and the regulatory capital impact of having done so.

deleted

Or. en

Justification

See Amendment to Article 101, paragraph 1 of Mr García-Margallo y Marfil



2. If an originator credit institution or a sponsor credit institution fails to comply with paragraph 1 in respect of a securitisation, the competent authority shall require it at a minimum, to hold capital against all of the securitised exposures as if they had not been securitised. The credit institution shall disclose publicly that it has provided non-contractual support and the regulatory capital impact of having done so.

deleted

Or. en

Justification

See Amendment to Article 101, paragraph 1 of Mr. Evans.


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2. Except in the case of credit institutions relying on Article 114 for the recognition of collateral in calculating the value of exposures for the purposes of paragraphs 1, 2 and 3 of Article 111, Exposures exempted under Article 111 (3) (a), (b), (c), (d), (f), (g) and (h) need not be reported as laid down in paragraph 1 and the reporting frequency laid down in point (b) of paragraph 1 may be reduced to twice a year for the exposures referred to in Article 111 (3) (e) and (i), and in Articles 115 and 116.

2. Except in the case of credit institutions relying on Article 114 for the recognition of collateral in calculating the value of exposures for the purposes of paragraphs 1, 2 and 3 of Article 111, Exposures exempted under Article 113 (3) (a), (b), (c), (d), (f), (g) and (h) need not be reported as laid down in paragraph 1 and the reporting frequency laid down in point (b) of paragraph 1 may be reduced to twice a year for the exposures referred to in Article 113 (3) (e) and (i), and in Articles 115 and 116.

Or. en

Justification




3. Member States may require the reporting of concentrated exposures to the issuers of collateral taken by the credit institution.

deleted

Or. en

Justification

Banks normally track (concentrations in) unfunded credit protection providers by adding guarantees and credit derivatives issued by a counterparty to this counterparty's overall exposure level and by managing this overall exposure level. For netting and funded credit protection, it is irrelevant who has provided the collateral (the bank is basically only interested in having a legally effective pledge on the collateral). Also, in 99% of the cases the collateral will be provided by the client itself (exceptionally its parent). There is one important exception: receivables as collateral. There can indeed be concentrations in the


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underlying parties on whom a bank's client has a claim. It is however impossible for an international bank consisting of many different legal entities with different source systems to combine the data of these different receivable issuers so that these concentrations can be identified. Already, matching counterparty identifiers is impossible The operational burden for banks would be enormous. This requirement would only be relevant for specialised banks active in limited industry sectors.



3. Member States may require the reporting of concentrated exposures to the issuers of collateral taken by the credit institution.

deleted

Or. en

Justification

For netting and funded credit protection, it is irrelevant who has provided the collateral. In 99% of cases it will be provided by the client itself. Furthermore, though there can be concentrations in the underlying parties on whom a bank's client has a claim, it is impossible for an international bank with many different legal entities and systems to combine the data of the receivable issuers to identify these concentrations. In addition, this is a double default issue and we note that the issue of double default is being examined by the Basel/IOSCO Trading Book.


Amendement 461Article 113, paragraph 3, introductory part

3. Member States may fully or partially exempt the following exposures from the application of Article 111:

3. For exposures incurred other than those mentioned in paragraph 2, Member States may fully or partially exempt only the following exposures from the application of Article 111:

Or. en

Justification

paragraph 2 should allow exemption of intra-group exposures irrespective of maturity and not be constrained by the distinction between under and over 1 year maturities in paragraph


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3(i),(j) and (k).

Where groups manage intra-group exposure and liquidity risk on an integrated basis, the imposition of an artificial maturity constraint on intra-group exposure would serve to inhibit the prudent management of liquidity risk, by forcing subsidiaries' longer term assets to be funded by the parent bank on a short term basis, and impair unjustifiably banks' ability to compete through subsidiaries in each Member State.


Amendement 462Article 113, paragraph 3, introductory part

3. Member States may fully or partially exempt the following exposures from the application of Article 111:

3. Member States shall fully or partially exempt the following exposures from the application of Article 111:

Or. en

Justification

In order to avoid disputes between Member States.


Amendement 463Article 113, paragraph 3, point (c)

c) asset items constituting claims carrying the explicit guarantees of central governments, central banks, international organisations or multilateral development banks, where unsecured claims on the entity providing the guarantee would achieve a 0% risk weight under Articles 78 to 83;

(c) asset items constituting claims carrying the explicit guarantees of central governments, central banks, public sector entities, international organisations or multilateral development banks, where unsecured, save for a guarantee provided by a central government of a public sector entity as referred to in Sector 3.2. paragraph 15a of Annex VI, claims on the entity providing the guarantee would achieve a 0% risk weight under Articles 78 to 83;

Or. en


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Justification



Amendement 464Article 113, paragraph 3, point (d)

d) other exposures attributable to, or guaranteed by, central governments, central banks, international organisations, or multilateral development banks where unsecured claims on the entity to which the exposure is attributable or by which it is guaranteed would receive a 0% risk weight under Articles 78 to 83;

(d) other exposures attributable to, or guaranteed by, central governments, central banks, public sector entities, international organisations, or multilateral development banks where unsecured, save for a guarantee provided by a central government to a public sector entity as referred to in Sector 3.2. paragraph 15 a of Annex VI, claims on the entity to which the exposure is attributable or by which it is guaranteed would receive a 0% risk weight under Articles 78 to 83;

Or. en

Justification



Amendement 465Article 113, paragraph 3, point (f)

f) asset items and other exposures secured, to the satisfaction of the competent authorities, by collateral in the form of debt securities issued by central governments or central banks, international organisations, multilateral development banks or Member States’ regional governments or local authorities, which securities constitute claims on their issuer which would receive a 0% risk weighting under Articles 78 to 83;

(f) asset items and other exposures secured, to the satisfaction of the competent authorities, by collateral in the form of debt securities issued by central governments or central banks, public sector entities, international organisations, multilateral development banks or Member States’ regional governments or local authorities, which securities constitute claims on their issuer which would receive a 0% risk weighting under Articles 78 to 83;

Or. en


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Justification



Amendment 466Article 113, paragraph 3, point (t a) (new)

ta) Transactions that are pursuant to article 45a of the Directive [93/6/EEC] exempted from the application of article 111 of this Directive.

Or. en

Justification

For consistency reasons, it is appropriate to include in the list of possible exemptions from large exposure requirements, also the conditions set out in the new article 45a of the Directive [93/6/EC].


Amendement 467Article 113, paragraph 3, point (t a) (new)

ta) fees receivable within 90 days and aged less than 90 days for firms falling within the definition of Article 20(2) of Directive 93/6/EEC.

Or. en

Justification

Invoiced or accrued fees owing to investment management firms should be exempted from the large exposure rules, because: they are not part of regulatory capital as they are highly unlikely to be included in audited profits; they are short-term in nature with no history of default (as in many cases the investment manager can take the fee directly from fund); and they have no impact on client assets in the event that the counterparty becomes insolvent (the client assets of investment management firms are segregated and normally held by an independent custodian).


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2. Subject to paragraph 3, a credit institution permitted to use own estimates of LGDs and conversion factors for an exposure class under Articles 84 to 89 may be permitted, where it is able to the satisfaction of the competent authorities to estimate the effects of financial collateral on their exposures separately from other LGD-relevant aspects, to recognise such effects in calculating the value of exposures for the purposes of Article 113(3).

2. Subject to paragraph 3, a credit institution permitted to use own estimates of LGDs and conversion factors for an exposure class under Articles 84 to 89 may be permitted, where it is able to the satisfaction of the competent authorities to estimate the effects of financial collateral on their exposures separately from other LGD-relevant aspects, to recognise such effects in calculating the value of exposures for the purposes of Article 111 (1) to (3).

Or. en

Justification



Amendement 469Article 114, paragraph 2, subparagraph 3

Where a credit institution is permitted to use its own estimates of the effects of financial collateral, it must do so on a consistent basis to the satisfaction of the competent authorities. In particular, this approach must be adopted for all large exposures.

Where a credit institution is permitted to use its own estimates of the effects of financial collateral, it must do so on a consistent basis with the approach to capital.

Or. en

Justification

These changes are required to harmonise treatment of large exposures with capital requirements. The maturity mismatch aspect will particularly affect small banks using the standardised approach to credit risk mitigation.


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Where a credit institution is permitted to use its own estimates of the effects of financial collateral, it must do so on a consistent basis to the satisfaction of the competent authorities. In particular, this approach must be adopted for all large exposures.

Where a credit institution is permitted to use its own estimates of the effects of financial collateral, it must do so on a consistent basis to the satisfaction of the competent authorities. In particular, this approach must be adopted for all large exposures where the credit institution is permitted to use own estimates of LGDs and conversion factors in accordance with Articles 84 to 89.

Or. en

Justification

The Commission’s proposal would require an Advanced approach to the effects of financial collateral on large exposures. This would impose an inappropriate constraint on the smaller, less sophisticated credit institutions that use the standardised or foundation approaches.



Credit institutions permitted to use own estimates of LGDs and conversion factors for an exposure class under Articles 84 to 89 which does not calculate the value of their exposures using the method referred to in the first subparagraph, may be permitted to use the approach set out in paragraph 9(1) above or the approach set out in point (o) of Article 113(3) above for calculating the value of exposures. A credit institution shall use only one of these two methods.

Credit institutions permitted to use own estimates of LGDs and conversion factors for an exposure class under Articles 84 to 89 which does not calculate the value of their exposures using the method referred to in the first subparagraph, may be permitted to use the approach set out in paragraph 1 above or the approach set out in point (o) of Article 113(3) above for calculating the value of exposures. A credit institution shall use only one of these two methods.

Or. en

Justification



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In the event that such a stress test indicates a lower realisable value of collateral taken than would be permitted to be taken into account under paragraphs 2 and 3 as appropriate, the value of collateral permitted to be recognised in calculating the value of exposures for the purposes of Article 111(1) to (3) shall be reduced accordingly.

deleted

Or. en

Justification

The appropriate response to the risk of lower realisable value of collateral is not more capital; in practice firms should request more collateral and/or diversity of collateral.




In the event that such a stress test indicates a lower realisable value of collateral taken than would be permitted to be taken into account under paragraphs 2 and 3 as appropriate the firm shall take this scenario into account under its pillar 2 capital assessment.

Or. en

Justification

Stress testing collateral is essential for robust risk management of concentration risk and it is appropriate to make such tests obligatory.

If the results of the stress tests feed into Pillar 1, however, it will create an incentive for weak


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stress testing. Smaller banks would be most affected as they may have to, reduce exposures to small business customers. Costs to trading firms would also increase.

Therefore the stress test should be taken into account in firms’ Pillar 2 assessments and reviewed by regulators.





Or. en

Justification



Amendement 475Article 114, paragraph 3, subparagraph 5, point (a) a (new)

aa) policies and procedures to address the situation that a stress test indicates a lower realisable value of collateral than taken into account under paragraphs 2 and 3;

Or. en

Justification

The appropriate response to the risk of lower realisable value of collateral is not more capital; in practice firms should request more collateral and/or diversity of collateral.


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Amendement 476Article 114, paragraph 3, subparagraph 5, point (a a) (new)

(aa) policies and procedures to address the situation that a stress test indicates a lower realisable value of collateral than taken into account under paragraphs 2 and 3;

Or. en

Justification

Stress testing collateral is essential for robust risk management of concentration risk and it is appropriate to make such tests obligatory.

If the results of the stress tests feed into Pillar 1, however, it will create an incentive for weak stress testing. Smaller banks would be most affected as they may have to, reduce exposures to small business customers. Costs to trading firms would also increase.

Therefore the stress test should be taken into account in firms’ Pillar 2 assessments and reviewed by regulators.



By way of derogation from Article 113(3)(i) and Article 115(2), Member States may apply a weighting of 20% to asset items constituting claims on and other exposures to credit institutions, regardless of their maturity.

By way of derogation from Article 113(3)(i) and Article 115(2), Member States may apply a weighting of 20% to asset items constituting claims on and other exposures to institutions, regardless of their maturity.

Or. en

Justification





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Shares held temporarily during a financial reconstruction or rescue operation or during the normal course of underwriting or in an institution's own name on behalf of others shall not be counted as qualifying holdings for the purpose of calculating the limits laid down in paragraphs 1 and 2. Shares which are not financial fixed assets as defined in Article 35(2) of Directive 86/635/EEC shall not be included.

Shares held temporarily during a financial reconstruction or rescue operation or during the normal course of underwriting or in an institution's own name on behalf of others shall not be counted as qualifying holdings for the purpose of calculating the limits laid down in Articles 120(1) and (2). Shares which are not financial fixed assets as defined in Article 35(2) of Directive 86/635/EEC shall not be included.

Or. en

Justification




1. The Member States need not apply the limits laid down in paragraphs 1 and 2 to holdings in insurance companies as defined in Directive 73/239/EEC and Directive 79/267/EEC, or in reinsurance companies as defined in Directive 98/78/EC.

1. The Member States need not apply the limits laid down in Articles 120(1) and (2) to holdings in insurance companies as defined in Directive 73/239/EEC and Directive 2002/83/EC, or in reinsurance companies as defined in Directive 98/78/EC.

Or. en

Justification



Amendement 480Article 123, subparagraph 1 a (new)

These strategies and processes can be imposed by the parent company of the credit institution so that the ICCAP process is conducted on consolidated group level only and reviewed by the competent


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authority responsible for supervision on a consolidated basis.

Or. en

Justification

Supervisory Review Process may be conducted on consolidated group level and subsidiary level if the subsidiary is in a different EU member state than the parent company. It is however impossible for a subsidiary to follow two independent sets of rules imposed by the management of the parent company and the management of the subsidiary.

The amendment shall therefore clarify that the management of the parent company can impose strategies and processes which are binding for the subsidiary as well. A review of the ICCAP by the host regulator is therefore sufficient.

Our impression is, that our interpretation is indented when reading articles 123, 68(2) and 71(1) in conjunction.



2. The scope of the review and evaluation referred to in paragraph 1 shall be that of the requirements of this Directive.

2. The scope of the review and evaluation referred to in paragraph 1 shall be undertaken by the competent authority responsible for supervision on a consolidated basis determined in accordance with Article 126 and applied at the level of the EU parent credit institution.

Or. en

Justification

Supervisory Review should apply at the level of the highest EU-based institution or financial holding company. To require application at the level of the individual credit institution or highest group member within any individual Member State will require significant resource input by institution and supervisors alike and, where risks are managed on a group basis, deliver no useful information


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2. The scope of the review and evaluation referred to in paragraph 1 shall be that of the requirements of this Directive.

2. The scope of the review and evaluation referred to in paragraph 1 shall be that of the requirements of this Directive undertaken by the competent authority responsible for supervision on a consolidated basis.

Or. en

Justification

While acknowledging the role of host supervisors, a coherent supervision of cross-border financial institutions is key. It is in the interest of supervisors, depositors, and borrowers that competent authorities have view of the group’s whole risk profile. The EU rule set should clearly reflect the practicality of requests.


Amendement 483Article 124, paragraph 3 a (new)

3a. Where a credit institution, the parent undertaking of which is a credit institution or financial holding company, which is supervised on a consolidated basis by a competent authority in a third country, the EU competent authority responsible for supervision on a consolidated basis shall by common agreement with the third country competent authority waive the requirements of this Article.

Or. en

Justification



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4. „Die zuständigen Behörden legen unter Berücksichtigung der Relevanz der Geschäfte des betreffenden Kreditinstituts für das Finanzsystem, der Art dieser Geschäfte, ihres Umfangs und ihrer Komplexität die Häufigkeit und die Intensität der in Absatz 1 genannten Überprüfung und Bewertung fest. Überprüfung und Bewertung werden mindestens einmal jährlich auf den neuesten Stand gebracht“.

4. „Die zuständigen Behörden legen unter Berücksichtigung der Größe, der Relevanz der Geschäfte des betreffenden Kreditinstituts für das Finanzsystem, der Art dieser Geschäfte, ihres Umfangs und ihrer Komplexität die Häufigkeit und die Intensität der in Absatz 1 genannten Überprüfung und Bewertung fest und haben dabei dem Grundsatz der Verhältnismäßigkeit Rechnung zu tragen. Überprüfung und Bewertung werden mindestens einmal jährlich auf den neuesten Stand gebracht.“

Or. de

Justification

Im Hinblick auf die in vielen Mitgliedstaaten vertretenen kleinen und mittleren Kreditinstituten ist es wesentlich, dass der Gedanke der proportionalen Anwendung ausdrücklich hervorgehoben wird. Der Berichterstatter hat den Vorschlag der Ratsarbeitsgruppen im Abänderungsantrag 5 aufgenommen und schlägt einen neuen Erwägungsgrund 35a vor. Darüber hinaus sollte unseres Erachtens dieser Gedanke jedoch explizit Eingang in den Art 124 der Richtlinie finden.



4. Competent authorities shall establish the frequency and intensity of the review and evaluation referred to in paragraph 1 having regard to the systemic importance, nature, scale and complexity of the activities of the credit institution concerned. The review and evaluation shall be updated at least on an annual basis.

4. The competent authority for supervision on a consolidated basis shall establish the frequency and intensity of the review and evaluation referred to in paragraph 1 having regard to the systemic importance, nature, scale and complexity of the activities of the credit institution concerned. The review and evaluation shall be updated at least on an annual basis.

Or. en


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Justification

While acknowledging the role of host supervisors, a coherent supervision of cross-border financial institutions is key. It is in the interest of supervisors, depositors, and borrowers that competent authorities have view of the group’s whole risk profile. The EU rule set should clearly reflect the practicality of requests.



4. Competent authorities shall establish the frequency and intensity of the review and evaluation referred to in paragraph 1 having regard to the systemic importance, nature, scale and complexity of the activities of the credit institution concerned. The review and evaluation shall be updated at least on an annual basis.

4. The competent authority responsible for supervision on a consolidated basis shall establish the frequency and intensity of the review and evaluation referred to in paragraph 1 having regard to the systemic importance, nature, scale and complexity of the activities of the credit institution concerned. The review and evaluation shall be updated at least on an annual basis.

Or. en

Justification




1. The competent authority responsible for the exercise of supervision on a consolidated basis of EU parent credit institutions and credit institutions controlled by EU parent financial holding companies shall carry out the following tasks:

1. In addition to the responsibilities imposed under the other provisions of this directive, the competent authority responsible for the exercise of supervision on a consolidated basis of the EU parent credit institutions and credit institutions controlled by EU parent financial holding companies shall carry out the following tasks:


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Or. en

Justification

Pillars 2 and 3 must be applied at the consolidated group level within the EU to ensure that competent authorities have view of the group’s whole risk profile. The list of competencies has been extended to Pillars 2 and 3. This is of essential importance to ensure a coherent supervision of cross-border financial institutions. This extension will be in the interests of depositors and borrowers and is consistent with best risk management practices in the industry and the delivery of Single Market objectives.



1. The competent authority responsible for the exercise of supervision on a consolidated basis of EU parent credit institutions and credit institutions controlled by EU parent financial holding companies shall carry out the following tasks:

1. In addition to the responsibilities imposed under the other provisions of this directive, the competent authority responsible for the exercise of supervision on a consolidated basis of the EU parent credit institutions and credit institutions controlled by EU parent financial holding companies shall carry out the following tasks:

Or. en

Justification

The Internal Credit Institutions’ Assessment Process and the Supervisory Review Process and the disclosure requirements under Pillar 3 must be applied at the consolidated group level in the EU to ensure that competent authorities have a key view of a group’s whole risk profile. This would be in the interests of depositors and borrowers, and be consistent with best risk management practice in the industry and the delivery of Single Market objectives.



(a) supervisory overview and assessment of compliance with the requirements laid down in Articles 71, 72(1), 72(2) and 73(3);

deleted


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Or. enJustification

See justification to Amendment to Article 129, paragraph 1, introductory part by J. Purvis.



(a) supervisory overview and assessment of compliance with the requirements laid down in Articles 71, 72(1), 72(2) and 73(3);

deleted

Or. en

Justification

See justification to Amendment to Article 129, paragraph 1, introductory part by P. Kauppi.



(c) planning and coordination of supervisory activities in going concern as well as in emergency situations, including in relation to the activities in Article 124, in cooperation with the competent authorities involved, and in relation to Articles 43 and 141.

(c) planning and coordination of supervisory activities in going concern as well as in emergency situations, including in relation to the activities in Article 124, in cooperation with the competent authorities involved.

Or. en

Justification

See justification to Amendment to Article 129, paragraph 1, introductory part by J. Purvis.




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(c) planning and coordination of supervisory activities in going concern as well as in emergency situations, including in relation to the activities in Article 124, in cooperation with the competent authorities involved, and in relation to Articles 43 and 141.

(c) planning and coordination of supervisory activities in going concern as well as in emergency situations, including in relation to the activities in Article 124, in cooperation with the competent authorities involved.

Or. en

Justification




2. In the case of applications for the permissions referred to in Articles 84(1), 87(9) and 105, respectively, submitted by an EU parent credit institution and its subsidiaries, or jointly by the subsidiaries of an EU parent financial holding company, the competent authorities shall work together, in full consultation, to determine whether or not to grant the permission sought and to determine the terms and conditions, if any, to which such permission should be subject.

2. In the case of applications for the permissions, approvals or reviews referred to in Articles 84, 87 (9), 89, 105, 124, 146 and 148 respectively, submitted by an EU parent credit institution and its subsidiaries or jointly by subsidiaries of an EU parent financial holding company, the competent authorities will work together, in full consultation, to determine whether or not to grant the permission sought and to determine the terms and conditions, if any, to which such permission should be subject.

Or. en

Justification

See amendment to Article 129, paragraph 1.



2. In the case of applications for the 2. In the case of applications for the


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permissions referred to in Articles 84 (1), 87 (9) and 105 respectively, submitted by an EU parent credit institution and its subsidiaries, or jointly by subsidiaries of an EU parent financial holding company, the competent authorities will work together, in full consultation, to determine whether or not to grant the permission sought and to determine the terms and conditions, if any, to which such permission should be subject.

permissions, approvals or reviews referred to in Articles 84, 87 (9), 89, 105, 124, 146 and 148 respectively, submitted by an EU parent credit institution and its subsidiaries or jointly by subsidiaries of an EU parent financial holding company, the competent authorities will work together, in full consultation, to determine whether or not to grant the permission sought and to determine the terms and conditions, if any, to which such permission should be subject

Or. en

Justification




The competent authorities shall in a single document agree together, within no more than six months, their determination on the application. This document shall be provided to the applicant. In the absence of a determination within six months, the competent authority referred to in paragraph 1 shall make its own determination on the application.

The competent authorities shall do everything within their power to reach a joint decision on the application within six months. This joint decision shall be set out in a document containing the fully reasoned decision which shall be provided to the applicant by the competent authority referred to in paragraph 1.

The period referred to in subparagraph 3 shall begin on the date of receipt of the complete application by the competent authority referred to in paragraph 1. The competent authority referred to in paragraph 1 shall forward the complete application to the other authorities without delay.

In the absence of a joint decision between the competent authorities within six months, the competent authority referred to in paragraph 1 shall make its own decision on the application. The decision shall be set out in a document, fully reasoned and


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taking into account the views and reservations of the other competent authorities expressed during the six months period. The decision shall be provided to the applicant and the other competent authorities by the competent authority referred to in paragraph 1.

The decisions referred to in subparagraphs 3 and 5 shall be recognised as determinative and applied in the Member States concerned.

Or. en

Justification

Alignment with Council proposal. Last paragraph was missing. Replaces amendment 59 of Radwan draft report.



Dabei gilt, dass die von den Kreditinstituten in der Folge ermittelten Ergebnisse der gegenseitigen Anerkennung durch die betroffenen Aufsichtsbehörden unterliegen. Dies gilt sowohl für die Berechnungen auf konsolidierter Ebene, als auch für den Einzelabschluss.

Or. de

Justification

Paneuropäische Kreditinstitute werden aufgrund der zahlreichen Wahlrechte mit unterschiedlichen nationalen Vorschriften konfrontiert sein. Um die mit einer möglichen Doppelberechnung verbundenen administrativen Kosten zu vermeiden, muss die gegenseitige Anerkennung der nationalen Vorschriften eingeführt werden.


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The competent authorities responsible for authorising the subsidiary of a parent undertaking which is a credit institution may, by bilateral agreement, delegate their responsibility for supervision to the competent authorities which authorised and supervise the parent undertaking so that they assume responsibility for supervising the subsidiary in accordance with this Directive. The Commission must be kept informed of the existence and content of such agreements. It shall forward such information to the competent authorities of the other Member States and to the Banking Advisory Committee.

The competent authorities responsible for authorising the subsidiary of a parent undertaking which is a credit institution may, by bilateral agreement, delegate their responsibility for supervision to the competent authorities which authorised and supervise the parent undertaking so that they assume responsibility for supervising the subsidiary in accordance with this Directive. The Commission must be kept informed of the existence and content of such agreements. It shall forward such information to the competent authorities of the other Member States and to the European Banking Committee.

Or. en

Justification




1. Competent authorities shall require any credit institution that does not meet the requirements of this Directive to take the necessary actions or steps at an early stage to address the situation.

1. Without prejudice to Article 69 and Article 129, competent authorities shall require any credit institution that does not meet the requirements of this Directive to take the necessary actions or steps at an early stage to address the situation.

Or. en

Justification

This amendment clarifies that sanctions, particularly the imposition of a specific own funds requirement in excess of the minimum, shall be applied at the consolidated group level by the consolidating competent authority (where appropriate). This will ensure the orderly and


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proportionate application of the requirements of the Directive. The conditions in Article 69 will ensure that any additional own funds are distributed adequately among the parent undertaking and the subsidiaries.



2. Member States shall provide that their competent authorities may carry out, or have carried out by external inspectors, on-the-spot inspections to verify information received from mixed-activity holding companies and their subsidiaries. If the mixed-activity holding company or one of its subsidiaries is an insurance undertaking, the procedure laid down in Article 140(1) may also be used. If a mixed-activity holding company or one of its subsidiaries is situated in a Member State other than that in which the credit institution subsidiary is situated, on-the-spot verification of information shall be carried out in accordance with the procedure laid down in Article 140(1).

2. Member States shall provide that their competent authorities may carry out, or have carried out by external inspectors, on-the-spot inspections to verify information received from mixed-activity holding companies and their subsidiaries. If the mixed-activity holding company or one of its subsidiaries is an insurance undertaking, the procedure laid down in Article 140(1) may also be used. If a mixed-activity holding company or one of its subsidiaries is situated in a Member State other than that in which the credit institution subsidiary is situated, on-the-spot verification of information shall be carried out in accordance with the procedure laid down in Article 141.

Or. en

Justification




3. In the absence of such equivalent supervision, Member States shall apply the provisions of Article 52 this Directive to the credit institution by analogy or shall allow their competent authorities to apply other appropriate supervisory techniques which achieve the objectives of supervision on a

3. In the absence of such equivalent supervision, Member States shall apply the provisions of this Directive to the credit institution by analogy or shall allow their competent authorities to apply other appropriate supervisory techniques which achieve the objectives of supervision on a


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consolidated basis of credit institutions. consolidated basis of credit institutions.

Or. en

Justification




3a. The banks shall be called upon to disclose their rating decisions in writing, and comprehensibly, to SME and other corporate applicants for loans. Should a voluntary undertaking by the sector in this regard prove inadequate, legislative measures shall be adopted. The administrative costs for the banks have to be at an appropriate rate to the size of the loan.

Or. en

Amendment by Paolo Cirino Pomicino


3a. Credit institutions shall disclose the key elements of their rating process to small or medium sized entities applying for credit. Should a national code of voluntary disclosure not be agreed between representative national associations of credit institutions and small or medium sized entities before 31 December 2006, competent authorities shall enforce appropriate regulation to ensure such a disclosure be attained

Or. en


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Justification

Transparency of the rating process is an important topic for SMEs. Therefore it would be useful that banks explain the key elements of their rating process to applicants. This is better achieved at national level given the differences in operational conditions that still prevail in the various national credit markets. It is obviously preferable that representative national associations of the banks and SMEs sectors can reach an agreement on how such disclosure could be delivered. However, should such an agreement not be reached before the implementation date, national authorities should ensure via regulatory measures that an adequate disclosure to SMEs

Amendment by Enrico Letta


3a. Credit institutions shall disclose the key elements of their rating decision process to small or medium sized entities applying for credit. Should a national code of voluntary disclosure not be agreed between representative national associations of credit institutions and small or medium sized entities before 31 December 2006, competent authorities shall enforce appropriate regulation to ensure such a disclosure be attained.

Or. en

Justification

With the implementation of this directive, many banks will decide the conditions and the price at which they grant loans to SMEs on the basis of their internal rating decision process. It is therefore important that banks explain its key elements to SMEs applying for credit. This is better achieved at national level given the differences in operational conditions that still prevail in the various national credit markets. It is obviously preferable that representative national associations of bank and SME sectors can reach an agreement on how such disclosure could be delivered. However, should such an agreement not be reached before the implementation date, national authorities should ensure via regulatory measures that an adequate disclosure to SMEs is provided.




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3a. Die zuständigen Behörden können Banken dazu auffordern, dem einzelnen Kreditantragsteller ihre Kreditentscheidung in nachvollziehbarer Weise offenzulegen, wenn der Antragsteller einem Kundensegment mit beschränktem Zugang zu externer Finanzierung angehört und die Kreditversorgung für diese Kundensegmente durch die Offenlegung verbessert wird.

Or. de

Justification

Sofern die Kreditversorgung für Kundensegmente verbessert werden kann, ist eine nachvollziehbare Erläuterung der Kreditentscheidung zu befürworten. Sollte diese Offenlegung keinen Effekt auf die Kreditversorgung einer Kundengruppe haben, ist davon aus Gründen der potentiellen Verschlechterung existierender Kundenverbindungen sowie der zusätzlichen Kosten abzusehen. Die Beurteilung der Kreditversorgung von Kundensegmenten kann nur auf nationaler Ebene getroffen werden.

Amendment by Gay Mitchell


3a. Banks shall make publicly available an overview of how they make their credit decisions. If requested by an applicant, banks shall explain the main reason(s) why the credit application was rejected or accepted.

Or. en

Justification

It is important that applicants, especially SMEs, be provided with an overview as to how credit decisions are made. A bank should make this information available on its website or elsewhere, so that applicants could access it and see how to improve the likelihood of their credit applications succeeding. However, care must also be taken to avoid exposing banks to manipulation or fraud by customers. Accordingly, this amendment aims to meet the concerns of SMEs, while at the same time producing an outcome that is workable for the banks and does not create more costs - for the banks and for their SME and other customers – than it does benefits.


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(3) In den in Absatz 2 genannten Ausnahmefällen weist das betreffende Kreditinstitut bei der Offenlegung der restlichen Informationen darauf hin, dass die betreffenden Bestandteile nicht veröffentlicht wurden, begründet dies und veröffentlicht allgemeinere Angaben zu den geforderten Informationsbestandteilen.

3. In den in Absatz 2 genannten Ausnahmefällen weist das betreffende Kreditinstitut bei der Offenlegung der restlichen Informationen darauf hin, dass die betreffenden Bestandteile nicht veröffentlicht wurden, begründet dies und veröffentlicht allgemeinere Angaben zu den geforderten Informationsbestandteilen, wenn diese in Anbetracht der in Anhang XII Teil 1 Nummern 2 und 3 genannten Kriterien nicht als geheim oder vertraulich einzustufen sind.

Or. de

Justification

Die in Artikel 146 Abs. 3 vorgesehene Verpflichtung zur allgemeinen Beschreibung und Erläuterung beziehungsweise Begründung der Tatsache, weshalb eine bestimmte Information nicht veröffentlicht wurde, darf nicht dazu führen, den Vertrauensschutz einzuschränken. Bei entsprechend geringer Grundgesamtheit von Einzelinformationen kann eine solche Verpflichtung dazu führen, dass der durch die Nichtveröffentlichung angestrebte Schutzbereich wieder verloren geht. Klarstellend sollte deshalb in Artikel 146 Abs. 3 ergänzt werden, dass die Verpflichtung zur Erläuterung der Nichtveröffentlichung einer Tatsache nur insoweit gelten kann, als dadurch der Schutzbereich und die Schutzwirkung nicht eingeschränkt werden.



2a. Die nationalen Aufsichtsbehörden können für Institute mit regional begrenztem Tätigkeitsbereich einen eingeschränkten Umfang der Offenlegung vorsehen. Dieser hat zumindest folgende Angaben zu enthalten:

- Darstellung aller Eigenmittel-Bestandteile,


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- Information über die Angemessenheit der Eingemittel-Deckung für künftige Aktivitäten,

- Gesamtheit der Eigenmittel und Eigenmittel-Koeffizient,

- Eigenmitteldeckung für die einzelnen Risikokategorien,

- Beschreibung der wesentlichen Merkmale des internen Ratingsystems.

Or. de

Justification

Die Offenlegung dient der besseren Information potentieller Kunden einer Bank. Daher sind Intensität und Inhalt dieser Informationen auf den durchschnittlichen Kunden einer Bank abzustimmen.


Amendment 508Article 150, paragraph 1, point (j)

(j) the amount specified in Article 79(2)(c) and in Article 86(4)(a) to take into account the effects of inflation;

(j) the amount specified in Article 4(6a), Article 79(2)(c) Article 86(4)(a), Article 89(1)ba and Annex VII, part 1, paragraph 4 and Annex VII, part 2, paragraph 14 to take into account the effects of inflation;

Or. en

Justification

Replaces amendment 76 of the Radwan draft report in order to take account of Article 89(1)ba (new).



(b) a temporary reduction in the minimum (b) a temporary reduction in the minimum


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level of own funds laid down in Article 75 the risk weights laid down in Title V, Chapter 2, Section 3 in order to take account of specific circumstances;

level of own funds laid down in Article 75 and/or the risk weights laid down in Title V, Chapter 2, Section 3 in order to take account of specific circumstances;

Or. en

Justification




2. For the first twelve-month period referred to in paragraph 1, the amount of own funds shall be 95% of the total minimum amount of own funds that would be required to be held during that period by the credit institution under Article 4 of Directive 93/6/EEC as that Directive and Directive 2000/12/EC stood prior to the date specified in Article 157 of this Directive.

2. For the first twelve-month period referred to in paragraph 1, the amount of own funds shall be 95% of the total minimum amount of own funds that would be required to be held during that period by the credit institution under Article 4 of Directive 93/6/EEC as that Directive and Directive 2000/12/EC stood prior to the date specified in Article 157(1) of this Directive.

Or. en

Justification




3. For the second twelve-month period referred to in paragraph 1, the amount of own funds shall be 90% of the total minimum amount of own funds that would be required to be held during that period by the credit institution under Article 4 of Directive 93/6/EEC as that Directive and

3. For the second twelve-month period referred to in paragraph 1, the amount of own funds shall be 90% of the total minimum amount of own funds that would be required to be held during that period by the credit institution under Article 4 of Directive 93/6/EEC as that Directive and


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Directive 2000/12/EC stood prior to the date specified in Article 157 this Directive.

Directive 2000/12/EC stood prior to the date specified in Article 157(1) of this Directive.

Or. en

Justification




4. For the third twelve-month period referred to in paragraph 1, the amount of own funds shall be 80% of the total minimum amount of own funds that would be required to be held during that period by the credit institution under Article 4 of Directive 93/6/EEC as that Directive and Directive 2000/12/EC stood prior to the date specified in Article 157 of this Directive.

4. For the third twelve-month period referred to in paragraph 1, the amount of own funds shall be 80% of the total minimum amount of own funds that would be required to be held during that period by the credit institution under Article 4 of Directive 93/6/EEC as that Directive and Directive 2000/12/EC stood prior to the date specified in Article 157(1) of this Directive.

Or. en

Justification




5. Compliance with the requirements of paragraphs 1 to 4 shall be on the basis of amounts of own funds fully adjusted to reflect differences in the calculation of own funds under Directive 2000/12/EC and Directive 93/6/EEC as those Directives stood prior to the date specified in Article 157 of this Directive and the calculation of own funds under this Directive deriving from the separate treatments of expected loss

5. Compliance with the requirements of paragraphs 1 to 4 shall be on the basis of amounts of own funds fully adjusted to reflect differences in the calculation of own funds under Directive 2000/12/EC and Directive 93/6/EEC as those Directives stood prior to the date specified in Article 157(1) of this Directive and the calculation of own funds under this Directive deriving from the separate treatments of expected loss


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and unexpected loss under Articles 84 to 89 of this Directive.

and unexpected loss under Articles 84 to 89 of this Directive.

Or. en

Justification




7. Die Kreditinstitute können bis zum 31. Dezember 2007 anstelle der Artikel des Titels V Kapitel 2 Abschnitt 3 Unterabschnitt 1 (Standardansatz) die Artikel 42 bis 46 der Richtlinie 2000/12/EG anwenden wie sie vor dem in Artikel 157 genannten Datum bestanden.

7. Die Kreditinstitute können bis zum 1. Januar 2008 anstelle der Artikel des Titels V Kapitel 2 Abschnitt 3 Unterabschnitt 1 (Standardansatz) sowie Unterabschnitt 2 (einfacher IRB-Ansatz) die Artikel 42 bis 46 der Richtlinie 2000/12/EG anwenden wie sie vor dem 31. Dezember 2006 bestanden.

Or. de

Justification

Übernahme des Ratsänderungsvorschlags, unter der Beachtung, dass sowohl Banken, die sich für den Standardansatz als auch Banken, die sich für einfachen IRB-Ansatz entschieden haben, wählen können, wann sie in dem Zeitraum vom 1.1.2007 bis 1.1.2008 mit der Umsetzung von Basel II beginnen.



(a) the provisions of that Directive referred to in Articles 42 to 46 shall apply as they stood prior to the date referred to in Article 157;

(a) the provisions of that Directive referred to in Articles 42 to 46 shall apply as they stood prior to the date referred to in Article 157(1);

Or. en


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Justification




(e) the treatment set out in Article 43(3) of that Directive shall apply to derivative instruments listed in Annex IV of that Directive whether on- or off-balance sheet and the figures produced by the treatment set out in that Annex shall be considered risk-weighted exposure amounts;

(e) the treatment set out in Article 43(3) of that Directive shall apply to derivative instruments listed in Annex IV of that Directive whether on- or off-balance sheet and the figures produced by the treatment set out in Annex III shall be considered risk-weighted exposure amounts;

Or. en

Justification




10. Where the discretion referred to in paragraph 7 is exercised the capital requirement for operational risk under Article 75(e) shall be reduced by the percentage representing the ratio of the value of the credit institution’s exposures for which risk-weighted exposure amounts are calculated in accordance with the discretion referred to in paragraph 7 to the total value of its exposures.

10. Where the discretion referred to in paragraph 7 is exercised the capital requirement for operational risk under Article 75(d) shall be reduced by the percentage representing the ratio of the value of the credit institution’s exposures for which risk-weighted exposure amounts are calculated in accordance with the discretion referred to in paragraph 7 to the total value of its exposures.

Or. en

Justification



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12a. Wird das in Absatz 7 genannte Wahlrecht ausgeübt, oder fällt das Institut unter Artikel 157 Absatz 2, finden die Artikel 124, 145 und 149 vor dem dort genannten Datum keine Anwendung.

Or. de

Justification

Es besteht die Notwendigkeit klarzustellen, dass im Übergangszeitraum die Säulen II und III nur dann Anwendung finden, wenn ein Institut auch Säule I anwendet. Dies muss sowohl für den Standardansatz als auch die beiden fortgeschrittenen Ansätze gelten. Die drei Säulen sind stark interdependent und lassen sich in keinem der drei Ansätze getrennt voneinander implementieren.



12a. Die Kreditinstitute können die Vergleichsgröße gemäß den Absätzen 1 bis 4 auch an Hand des durchschnittlichen Eigenmittelerfordernisses der Jahre 2005 und 2006 sowie des Bilanzsummenwachstums der Jahre 2007 bis 2009 berechnen.

Or. de

Justification

Im Richtlinienvorschlag ist vorgesehen, dass jene Kreditinstitute, die fortgeschrittene Ansätze (IRB, AMA) zur Ermittlung ihrer Eigenmittelerfordernisse verwenden, in den Jahren 2007 bis 2009 sog. Floor-Berechnungen vornehmen müssen. Konkret wird festgelegt, dass die Eigenkapitalausstattung im Jahr 2007 mindestens 95 % (2008 mindestens 90 % und 2009 mindestens 80 %) der Mindesteigenkapitalerfordernisse entsprechen muss, welche das Institut bei Anwendung der Basel I Regelungen vorhalten müsste. Diese aufwändige Verpflichtung ist nicht gerechtfertigt, da die komplette Basel I Daten- und Rechenmaschinerie für weitere drei


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Jahre - parallel zu den neuen Datenerfassungen – und eventuell sogar noch darüber hinaus laufen müsste. Gerade auch weil die Institute ohnehin bereits mit erheblichen Umstellungskosten konfrontiert sind, sollte hier versucht werden, unnötige Zusatzkosten zu vermeiden. Die zuständigen Behörden sollten diesbezüglich vereinfachte Verfahren vorgeben und zulassen können.



In the calculation of risk-weighted exposure amounts for exposures arising from property leasing transactions concerning offices or other commercial premises situated in their territory and meeting the criteria set out in Annex VI, part 1, paragraph 51, the competent authorities may, until 31 December 2012 allow a 50% risk weighting to be applied without the application of Annex VI, part 1, paragraphs 55 and 56.

In the calculation of risk-weighted exposure amounts for exposures arising from property leasing transactions concerning offices or other commercial premises situated in their territory and meeting the criteria set out in Annex VI, part 1, paragraph 51, the competent authorities may, until 31 December 2012 allow a 50% risk weighting to be applied without the application of Annex VI, part 1, paragraphs 52 and 53.

Or. en

Justification


Amendment by Zsolt László Becsey

Amendment 521Article 153, subparagraph 2 a (new)

2a. In the calculation of risk weighted exposure amounts for the purposes of Annex VI part 1 paragraph 4, until 31 December 2012, the same risk weight shall be applied in relation to exposures to Member States' central governments or central banks denominated and funded in the domestic currency of any Member State as would be applied to such exposures denominated and funded in their domestic currency.


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Or. enJustification

The Directive amends the rules relating to risk weights are applied to government debt denominated and funded in a currency other than the domestic currency. Without the suggested amendment, the risk weights, as a consequence of the EU membership compared to the pre-accession status, for several new Member States holding debt denominated in euro would significantly increase. This would make it difficult for these Member States to adopt the single currency by imposing costs on Member States in the process of accession to the euro-zone when new debt issued will be denominated in euro and previously issued debt will gradually be converted into euro. Furthermore, the higher risk weights would also make it more costly for investors in other Member States to invest in such new Member States, hindering the single market. Therefore a six-year long transitional period till the end of 2012 is deemed necessary during which the same risk-weights shall be applied to the exposures to Member States’ central governments or central banks denominated in domestic currency and in euro. This will contribute to ensuring new Member States (first of all Visegrad countries and possibly Romania and Bulgaria) prepare smoothly for the accession to the euro-zone.



1. The requirements in Article 84(3) and (4) shall apply from the 31 December 2009.

1. The requirements in Article 84(3) and (4) shall apply from the 31 December 2010.

Or. en

Justification

Cross reference / Typographical error. Replaces Amendment 87 of Radwan draft report.



1a. The competent authorities of each Member State may for the purposes of Annex VI part 1 paragraph 58 set the number of days past due up to a figure of


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180 for corporate and retail exposures and up to 270 days for public sector entities (PSE) exposures if local conditions make it appropriate. The specific number may differ across product lines .

Competent authorities which do not make use of the option in the first subparagraph for such exposures in its territory, may set a higher number of days for exposures to counterparts situated in the territories of other Member States the competent authorities of which have made use of that option. The specific number shall fall within 90 days and the figures the other competent authorities have set for exposures to such counterparties within their territories.

Or. en

Justification

The IRB approach in Annex VII part 4 §84 and Article 154 §4 currently allows national legislation to lengthen the time beyond which retail/PSE and corporate exposures must be considered “past due” to 180 days. To be consistent, this possibility should also be provided for in the Standardised Approach. Additionally, to take into account certain national regulations and practices, member states should be allowed to extend the past due period up to 270 days for PSE exposures under all approaches.



1a. Until 31 December 2011, the competent authorities of each Member State may for the purposes of Annex VI part 1 paragraph 58 set the number of days past due up to a figure of 180 for corporate, retail and public sector entities (PSE) exposures if local conditions make it appropriate. The specific number may differ across product lines.

Competent authorities which do not make use of the option in the first subparagraph for such exposures in its territory, may set a


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higher number of days for exposures to counterparts situated in the territories of other Member States the competent authorities of which have made use of that option. The specific number shall fall within 90 days and the figures the other competent authorities have set for exposures to such counterparties within their territories.

Or. en

Justification

The IRB approach allows national legislation to lengthen the time beyond which credit must be considered “past due” to 180 days. To be consistent the same possibility should be extended to the Standardised Approach for both retail/PSE and corporate claims (and not only for corporate exposures as in the ECOFIN amendment) for a transitional period of 5 years. Without this amendment there would be an asymmetry that would penalise SMEs in particular. It should be noted that if this disparity of treatment were not eliminated, the same counterpart (for example a retail borrower) could be rated as “performing” by an IRB bank and as “non-performing” by a STA bank. The 90 days rule, as in the Council approach (without any possible transitional extension to 180 days in the Standard for retail/PSE customers) could possibly penalise smaller banks. It should be noted that in the retail portfolio, entities that are vital to the European economy are also included, such as small firms with a total outstanding debt to the credit institution of no more than EUR 1 million [as stated in art 79.2 (c)].



Until 31 December 2017, the competent authorities of the Member States may exempt from the IRB treatment certain equity exposures held at 31 December 2007.

Until 31 December 2017, the competent authorities of the Member States may exempt from the IRB treatment certain equity exposures held at 31 December 2007. When the competent authorities of a Member State allow this exempted position, it shall also be extended to all equity exposures held by EU subsidiaries of banks in this Member State, as well as to equity exposures held in another Member State that are issued by an issuer established in this Member State.


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Or. enJustification

The 10-year grandfathering provisions for equity, under which Member State will be allowed to exempt from the IRB treatment certain equity exposures held on 31 December 2007 until 31 December 2017 is subject to national discretion. This will create an unlevel playing field within the EU. The 10-year grandfathering provisions for equity, under which Member State will be allowed to exempt from the IRB treatment certain equity exposures held on 31 December 2007 until 31 December 2017 is subject to national discretion. This will create an unlevel playing field within the EU. Thus at a minimum, in case a host supervisor allows the grandfathering provision in its home country, this provision should be automatically extended to equity exposures held by foreign subsidiaries of banks in this host country as well as to equity exposures held in another country that are issued by an equity issuer established in the host country.



(4) Für Forderungen an Unternehmen können die zuständigen Behörden jedes Mitgliedstaats bis zum 31. Dezember 2011 die Anzahl der Tage festlegen, ab der alle Kreditinstitute ihres Landes Forderungen an derartige Kontrahenten mit Sitz in diesem Mitgliedstaat nach der Ausfalldefinition in Anhang VII Teil 4 Nummer 44 als überfällig anzusehen haben. Diese Zahl kann zwischen 90 und 180 Tagen betragen, sollte dies aufgrund der lokalen Gegebenheiten sinnvoll erscheinen. Für Forderungen an derartige Kontrahenten mit Sitz in einem anderen Mitgliedstaat darf die von den zuständigen Behörden festgesetzte Anzahl von Tagen nicht über die von den zuständigen Behörden des betreffenden Mitgliedstaats gesetzte Anzahl hinausgehen.

4. Für Forderungen an Unternehmen können die zuständigen Behörden jedes Mitgliedstaats bis zum 31. Dezember 2011 die Anzahl der Tage festlegen, ab der alle Kreditinstitute ihres Landes Forderungen an derartige Kontrahenten mit Sitz in diesem Mitgliedstaat nach der Ausfalldefinition in Anhang VII Teil 4 Nummer 44 als überfällig anzusehen haben. Diese Zahl soll generell 90 Tage betragen. Sie darf nur dann bis 180 Tage ausgeweitet werden, wenn dies aufgrund der lokalen Gegebenheiten sinnvoll erscheint. Für Forderungen an derartige Kontrahenten mit Sitz in einem anderen Mitgliedstaat darf die von den zuständigen Behörden festgesetzte Anzahl von Tagen nicht über die von den zuständigen Behörden des betreffenden Mitgliedstaats gesetzte Anzahl hinausgehen.

Or. de

Justification

Aufstellung einer generellen einheitlichen Anforderung von 90 Tagen und Ausweitung nur als Ausnahmefall.


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4a. Until 31 December 2011, the competent authorities of each Member State may for the purposes of Annex VI part 1 paragraph 58 set the number of days past due up to a figure of 180 for exposures indicated in Annex VI, part 1, paragraphs 13 to 18 and 39 to 41 if local conditions make it appropriate. The specific number may differ across product lines.

Competent authorities which do not make use of the option in the first subparagraph for such exposures in its territory, may set a higher number of days for exposures to counterparts situated in the territories of other Member States the competent authorities of which have made use of that option. The specific number shall fall within 90 days and the figures the other competent authorities have set for exposures to such counterparties within their territories.

Or. en

Justification

Consistently with the IRB approach which allows national competent authorities to permanently or transitionally lengthen to 180 days the time beyond which credit must be considered past due, such possibility should be transitionally extended to the Standardised Approach for retail, PSE and corporate claims. Such a provision was simply forgotten during the last minute negotiations in Basel creating a clear imbalance between the IRB and the Standardised approach. Not correcting the existing text may likely be interpreted as an imbalance of the overall new framework against small banks which will adopt the standardised approach. A similar text has also been agreed at Council level in December 2004.




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Based on that analysis and taking into account the contribution of the European Central Bank, the Commission shall draw up a biennial report and submit it to the European Parliament and to the Council, together with any appropriate proposals.

2. Based on that analysis and taking into account the contribution of the European Central Bank, the Commission shall draw up a biennial report and submit it to the European Parliament and to the Council, together with any appropriate proposals. Contributions from credit taking and credit lending parties shall be adequately acknowledged when the report is drawn up.

Or. en



Auf der Grundlage dieser Analyse und unter Berücksichtigung des Beitrags der Europäischen Zentralbank erstellt die Kommission alle zwei Jahre einen Bericht und leitet ihn – gegebenenfalls zusammen mit angemessenen Vorschlägen – an das Europäische Parlament und den Rat weiter.

Auf der Grundlage dieser Analyse und unter Berücksichtigung des Beitrags der Europäischen Zentralbank erstellt die Kommission alle zwei Jahre einen Bericht und leitet ihn – gegebenenfalls zusammen mit angemessenen Vorschlägen – an das Europäische Parlament und den Rat weiter. Beiträge seitens der kreditnehmenden und kreditgebenden Wirtschaft sind bei der Erstellung des Berichts ausreichend zu würdigen.

Or. de

Justification

Die Eigenkapitalbestimmungen betreffen primär die kreditgebende Wirtschaft.



Auf der Grundlage dieser Analyse und unter Berücksichtigung des Beitrags der Europäischen Zentralbank erstellt die Kommission alle zwei Jahre einen Bericht und leitet ihn- gegebenenfalls zusammen mit angemessenen Vorschlägen- an das

Auf der Grundlage dieser Analyse und unter Berücksichtigung des Beitrags der Europäischen Zentralbank erstellt die Kommission alle zwei Jahre einen Bericht und leitet ihn- gegebenenfalls zusammen mit angemessenen Vorschlägen- an das


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Europäische Parlament und den Rat weiter. Europäische Parlament und den Rat weiter. Beiträge seitens der kreditnehmenden und kreditgebenden Wirtschaft sind bei der Erstellung des Berichts ausreichend zu würdigen.

Or. de

Justification

Es ist unverzichtbar, das neben der kreditnehmenden Wirtschaft ebenso die Beiträge der kreditgebenden Institute und ihrer Verbände ausreichend bei der Analyse der prozyklischen Wirkungen von Basel II durch die Kommission berücksichtigt werden.



The Commission shall monitor the effect of consolidated supervision pursuant to Article 129 on investor protection and on the stability of the financial markets and shall draw up a report, in which it shall assess the possibility of revising the rules in Articles 68 and 69 to European subsidiaries, before the end of 2008 and submit it to the European Parliament and to the Council, together with any corresponding proposals.

Or. en

Justification



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Die Kommission überwacht, wie die Beaufsichtigung auf konsolidierter Basis gemäß Artikel 129 durchgeführt wird und legt drei Jahre nach dem in Artikel 157 Absatz 2 genannten Zeitpunkt dem Europäischen Parlament und dem Rat einen Bericht gegebenenfalls zusammen mit geeigneten Änderungsvorschlägen vor. Zu prüfen ist, ob sich die Stärkung der Stellung der für die Konsolidierung zuständigen Aufsichtsbehörde bewährt hat, und ob die Befugnisse ausgeweitet werden sollten.

Or. de

Justification

Langfristig gesehen braucht der europäische Finanzbinnenmarkt zu seiner vollen Funktionsfähigkeit eine europäische Aufsichtsbehörde. Diese kann natürlich erst installiert werden, wenn der Finanzbinnenmarkt funktioniert, noch hinkt er dem Binnenmarkt für Güter hinterher. Die Kommission sollte in drei Jahren einen Bericht vorlegen, dem sie gegebenenfalls Änderungsvorschläge beifügt, die in Richtung einer europäischen Aufsichtsbehörde gehen.


Amendment 533Article 156, paragraph 2, point (b) (new)

2b. The Commission shall monitor the effect of consolidated supervision pursuant to Article 129 on investor protection and on the stability of the financial markets and shall draw up a report, in which it shall assess the possibility of revising the rules in Articles 68 and 69 to European subsidiaries, before the end of 2008 and submit it to the European Parliament and to the Council, together with any corresponding proposals.


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Or. en

Justification




The Commission shall monitor how consolidated supervision pursuant to Article 129 is implemented and shall draw up a report three years after the date specified in Article 157(2) and submit it to the European Parliament and to the Council, together with any appropriate proposals. It shall assess whether the strengthening of the position of the supervisor responsible for consolidation has proved its worth and whether its powers should be retained as they are, withdrawn or extended.

Or. en

Justification

The implementation of consolidated supervision and its effect on financial markets should be reviewed earlier than the Rapporteur proposes.


Amendment 535Article 156, paragraph 2 b (new)


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Die Kommission überwacht, wie sich die Beaufsichtigung auf konsolidierter Basis gemäß Artikel 69 im Hinblick auf den Einlegerschutz und die Finanzmarktstabilität auswirkt und legt drei Jahre nach dem in Artikel 157 Absatz 2 genannten Zeitpunkt dem Europäischen Parlament und dem Rat einen Bericht gegebenenfalls mit den entsprechenden Änderungsvorschlägen vor, in dem sie die Möglichkeit einer Ausweitung der Regelungen des Artikels 69 auf europäische Tochterunternehmen prüft.

Or. de

Justification

Die Solvenzüberwachung sollte zu einem späteren Zeitpunkt EU-weit auf konsolidierter Konzernebene möglich sein. Daher sollte die Kommission nach drei Jahren einen Bericht vorlegen, in dem sie die Möglichkeit einer Ausweitung der Regelung des Artikels 69 auf europäische Tochterunternehmen beleuchtet, und gegebenenfalls Änderungsvorschläge beifügt, die in diese Richtung gehen.


Amendment 536Article 156, paragraph 2 b (new)

The Commission shall monitor the effect of consolidated supervision pursuant to Article 129 on investor protection and on the stability of the financial markets and shall draw up a report, in which it shall assess the possibility of extending the rules in Article 69 to European subsidiaries, three years after the date specified in Article 157(2) and submit it to the European Parliament and to the Council, together with any corresponding proposals.

Or. en


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Justification

The implementation of consolidated supervision and its effect on financial markets should be reviewed earlier than the Rapporteur proposes.


Amendment 537Article 156, subparagraph 2 c (new)

Die Kommission überwacht, wie sich die Nullgewichtung gruppeninterner Kredite gemäß Artikel 80 Absatz 7 im Hinblick auf den Einlegerschutz und die Finanzmarktstabilität auswirkt und legt dem Europäischen Parlament und dem Rat drei Jahre nach dem in Artikel 157 Absatz 2 genannten Zeitpunkt einen Bericht gegebenenfalls mit Änderungsvorschlägen vor, in dem sie die Möglichkeit einer Ausweitung der Regelung des Artikels 80 Absatz 7 auf europaweite gruppeninterne Kreditbeziehungen prüft.

Or. de

Justification

Die Kommission legt in drei Jahren einen Bericht vor, indem sie überprüft, ob die Bestimmungen des Art. 80 (7) auf europäische Unternehmensteile erweitert werden können, und fügt gegebenenfalls Änderungsvorschläge bei.


Amendment 538Article 156, paragraph 2 c (new)

The Commission shall identify and further elaborate on the barriers for extending this consolidated supervision to other elements of this Directive, in particular with regard to issues concerning financial fall back and lender of last resort responsibilities, and


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shall present a report to the European Parliament and the Council with appropriate policy options, including the option of creating an integrated European level supervision for the large cross border institutions.

Or. en

Justification

The financial consequences of a transfer of supervisory powers and consolidated supervision by one national supervisor are not yet clearly assessed nor solved; the commission should undertake a more precise study. Both for these financial aspects and for reasons of avoiding concentration of supervisory powers with only one or two national supervisors the option of European level supervision as suggested in the Parliaments Van den Burg report, should be further investigated.


Amendment 539Article 156 a (new)

Article 156a

Die Kommission überprüft in Zusammenarbeit mit den Mitgliedstaaten die praktische Umsetzung der Zusammenarbeit der zuständigen Aufsichtsbehörden, insbesondere die in Artikel 129 geregelte Zusammenarbeit der Aufsichtsbehörde eines EU-Mutterkreditinstituts mit den Aufsichtsbehörden seiner Tochterkreditinstitute in anderen Mitgliedstaaten. Die Kommission hat bis zum 31.12. 2010 einen Bericht an den Rat und das Parlament zu übermitteln, in dem gegebenenfalls Vorschläge für eine Erweiterung der Aufgabenstellung der Aufsichtsbehörde des Mutterkreditinstituts bzw. der Mutterfinanzholdinggesellschaft und für eine Verbesserung der Verfahren der grenzüberschreitenden Zusammenarbeit aller betroffenen Aufsichtsbehörden gemacht werden.

In dem Bericht sollen auch eine


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Beurteilung über mögliche Verzerrungen des grenzüberschreitenden Wettbewerbs infolge der Bestimmungen über die konsolidierte Aufsicht gemäß den Artikeln 68 bis 73 gemacht und gegebenenfalls Vorschläge für deren Veränderung mit Zielrichtung für gleiche Wettbewerbsbedingungen im Binnenmarkt unterbreitet werden.

Or. de

Justification

Die Bestimmungen über die Koordinierung und Zusammenarbeit zwischen den nationalen Aufsichtsbehörden müssen für die sich weiterentwickelnden grenzüberschreitenden Aktivitäten von Banken, Bankengruppen und Finanzkonglomeraten laufend angepasst werden. Die zentrale Risikoüberwachung, Risikosteuerung und Eigenkapitalzuordnung von (grenzüberschreitend tätigen) Banken, Bankengruppen und Finanzkonglomeraten bedürfen einer Entsprechung in der konsolidierten Aufsicht, wobei möglicherweise eine Ausweitung der Aufgabenstellung des consolidated supervisors des Mutterinstitutes auf Funktionen der Säule 2 des Baseler Abkommens sachlich angeraten und vom Standpunkt der Finanzstabilität im Binnenmarkt notwendig sein wird.



1. as amended by the Directives set out in Annex XV, part A, is hereby repealed without prejudice to the obligations of the Member States concerning the deadlines for transposition of the said Directives listed in Annex XV, part B.

1. Directive 2001/12/EC as amended by the Directives set out in Annex XIII, part A, is hereby repealed without prejudice to the obligations of the Member States concerning the deadlines for transposition of the said Directives listed in Annex XIII, part B.

Or. en

Justification



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2. References to the repealed Directives shall be construed as references to this Directive and should be read in accordance with the correlation table in Annex XVI.

2. References to the repealed Directives shall be construed as references to this Directive and should be read in accordance with the correlation table in Annex XIV.

Or. en

Justification



Amendment 542Annex III, heading 2, paragraph 3 (after Table 1)

For the purpose of calculating the potential future exposure in accordance with step (b) the competent authorities may allow credit institutions until 31 December 2006 to apply the following percentages instead of those prescribed in Table 1 provided that the institutions make use of the option set out in Article 11a of Directive 93/6/EEC for contracts within the meaning of paragraph 3(b) and (c) of Annex IV:

For the purpose of calculating the potential future exposure in accordance with step (b) the competent authorities may allow credit institutions to apply the following percentages instead of those prescribed in Table 1 provided that the institutions make use of the option set out in Annex IV, paragraph 21 of Directive 93/6/EEC for contracts within the meaning of paragraph 3(b) and (c) of Annex IV:

Or. en

Justification



Amendment 543Annex VI, part 1, paragraph 10 a (new)

10a. Exposures to churches and religious


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communities constituted in the form of a legal person under public law shall, in so far as they raise taxes in accordance with legislation conferring on them the right to do so, be treated as exposures to regional governments and local authorities, except that paragraph 10 shall not apply. In this case for the purpose of Article 89 paragraph (d) permission to apply subsection 1 shall not be excluded.

Or. en

Justification

Replaces amendment 113 of the Radwan draft report.


Amendment 544Annex VI, part 1, paragraph 15

15. Subject to the discretion of competent authorities, exposures to public sector entities may be treated as exposures to institutions. Exercise of this discretion by competent authorities is independent of the exercise of discretion by competent authorities as specified in Article 80. The preferential treatment for short-term exposures specified in paragraphs 30, 31 and 36 shall not be applied.

15. Subject to the discretion of competent authorities, exposures to public sector entities may be treated as exposures to institutions. Exercise of this discretion by competent authorities is independent of the exercise of discretion by competent authorities as specified in Article 80(3). The preferential treatment for short-term exposures specified in paragraphs 30, 31 and 36 shall not be applied.

Or. en

Justification



Amendment 545Anex VI, part 1, paragraph 15 a (new)

15a. In exceptional circumstances,


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exposures to public-sector entities may be treated as exposures to the central government in whose jurisdiction they are established where in the opinion of the competent authorities there is no difference in risk between such exposures because of the existence of an appropriate guarantee by the central government. For the purpose of Article 89 paragraph (d), the permission to apply subsection 1 shall not be excluded.

Or. en

Justification

Substitution of amendment 111 of the Radwan draft report with a view to allow for a permanent partial use of the provisions of paragraph 15a.


Amendment 546Anex VI, part 1, paragraph 16

16. Machen die zuständigen Behörden eines Mitgliedstaats von der Ermessensentscheidung, Forderungen an öffentliche Stellen wie Forderungen an Institute zu behandeln, Gebrauch, so können die zuständigen Behörden eines anderen Mitgliedstaats ihren Kreditinstituten gestatten, Forderungen an diese öffentliche Stellen auf dieselbe Weise zu gewichten.

16. Machen die zuständigen Behörden eines Mitgliedstaats von der Ermessensentscheidung, Forderungen an öffentliche Stellen wie Forderungen an Institute zu behandeln, Gebrauch, so müssen die zuständigen Behörden eines anderen Mitgliedstaats ihren Kreditinstituten gestatten, Forderungen an diese öffentliche Stellen auf dieselbe Weise zu gewichten.

Or. de

Justification

Die Verpflichtung der zuständigen Behörde ist erforderlich, um ein „level playing field“ sicher zustellen und um eine gegenseitige Anerkennung zu gewährleisten.

Amendment by Antolín Sánchez Presedo

Amendment 547Anex VI, part 1, paragraph 19


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19. For the purposes of Articles 78 to 83, the Inter-American Investment Corporation is considered to be a Multilateral Development Bank (MDB).

19. For the purposes of Articles 78 to 83, the Inter-American Investment Corporation, the Black Sea Trade and Development Bank and the Central American Bank for Economic Integration are considered to be a Multilateral Development Bank (MDB).

Or. en

Justification

The Central American Bank for Economic Integration is considered a Multilateral Development Bank and therefore it must receive exactly the same general treatment as all the others Multilateral Banks and not that of the special regime.



20. Without prejudice to paragraphs 21 and 22, exposures to multilateral development banks shall be treated in the same manner as exposures to credit institutions in accordance with paragraphs 28 to 31. The preferential treatment for short-term exposures as specified in paragraph 30, 31 and 36 shall not apply.

20. Without prejudice to paragraphs 21 and 22, exposures to multilateral development banks shall be treated in the same manner as exposures to institutions in accordance with paragraphs 28 to 31. The preferential treatment for short-term exposures as specified in paragraph 30, 31 and 36 shall not apply.

Or. en

Justification




27a. Forderungen an Institute mit einer ursprünglichen effektiven Laufzeit von drei Monaten oder weniger sind mit 20% zu


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gewichten.

Or. de

Justification

Eine 20% Risikogewicht ist für derartige Forderungen in Analogie zu Randnummer 31 angebracht.



28. Exposures to institutions with an original effective maturity of more than three months for which a credit assessment by a nominated ECAI is available shall be assigned a risk weight according to Table 4 in accordance with the assignment by the competent authorities of the credit assessments of eligible ECAIs to six steps in a credit quality assessment scale.

deleted

deleted (whole table deleted)

Or. en

Justification

The Italian banking industry is against a national discretion in the field of exposures to institutions. We believe that only one solution has to be applied in Europe. The Italian banking industry, considering among other aspects, the low ratio of rated banks in Europe, strongly supports the Central Government risk weight based method that is closer to the existing Basel 1 treatment. We ask for deleting the credit assessment based method.




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29. Exposures to unrated institutions shall be assigned a risk weight of 50%.

deleted

Or. en

Justification

The Italian banking industry is against a national discretion in the field of exposures to institutions. We believe that only one solution has to be applied in Europe. The Italian banking industry, considering among other aspects, the low ratio of rated banks in Europe, strongly supports the Central Government risk weight based method that is closer to the existing Basel 1 treatment. We ask for deleting the credit assessment



30. Exposures to an institution with an original effective maturity of three months or less for which a credit assessment by a nominated ECAI is available shall receive a risk weight according to Table 5 in accordance with the assignment bythe competent authorities of the credit assessments of eligible ECAIs to six steps in a credit quality assessment scale:

30. If an exposure to an institution has an original effective maturity of six months or less and a risk weight would otherwise be assigned in accordance with point 26 (paragraph 6.3) it shall receive a risk weight according to the following table:

Or. en

Justification

Within the context of the two options allowed for interbank exposures, we would point out that unlike the second method (credit assessment based method) that we want to be deleted, the Central Government risk weight based method does not envisage preferred treatment for short-term exposures. We request that this possibility be provided for; furthermore, we recommend extending the definition of “short-term” to include all exposures with original maturity of six months or less (instead of three).


Amendment 553Annex VI, part 1, paragraph 30, Table 5, column 1, row 1

Credit quality step Credit quality step to which central


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government assigned

Or. en

Justification

Within the context of the two options allowed for interbank exposures, we would point out that unlike the second method (credit assessment based method) that we want to be deleted, the Central Government risk weight based method does not envisage preferred treatment for short-term exposures. We request that this possibility be provided for; furthermore, we recommend extending the definition of “short-term” to include all exposures with original maturity of six months or less (instead of three).



31. Exposures to unrated institutions having an original effective maturity of three months or less shall be assigned a 20% risk weight.

deleted

Or. en

Justification

The Italian banking industry is against a national discretion in the field of exposures to institutions. We believe that only one solution has to be applied in Europe. The Italian banking industry, considering among other aspects, the low ratio of rated banks in Europe, strongly supports the Central Government risk weight based method that is closer to the existing Basel 1 treatment. We ask for deleting the credit assessment



40. Exposures for which such a credit assessment is not available shall receive a 100 % risk weight or the risk weight of its central government, whichever is the higher.

40. Exposures for which such a credit assessment is not available shall receive a 100 % risk weight or the risk weight of its central government, whichever is the higher. Non-retail exposures to SMEs shall receive a risk weight of 85 %.


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Or. enJustification

In analogy to the firm size adjustment for non retail exposures in the IRB approach, a special risk weight should be foreseen for non retail exposures to SMEs in the standardized approach.



41. Exposures that comply with the criteria listed in Article 79(2) may, subject to the discretion of competent authorities, be assigned a risk weight of 75%.

41. Exposures that comply with the criteria listed in Article 79(2) shall be assigned a risk weight of 75%.

Or. en

Justification

Translation error in Radwan draft report. The German wording "werden...belegt" means "shall be assigned" not "may be assigned". This is an intentional deviation from the Council wording.



43. Exposures fully and completely secured, to the satisfaction of the competent authorities, by mortgages on residential property which is or shall be occupied or let by the owner shall be assigned a risk weight of 35%.

43. Exposures fully and completelysecured, to the satisfaction of the competent authorities, by mortgages onresidential property which is or shall beoccupied or let by the owner or thebeneficial owner in the case ofpersonal investment companies shallbe assigned a risk weight of 35%.

Or. en




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43. Exposures fully and completely secured, to the satisfaction of the competent authorities, by mortgages on residential property which is or shall be occupied or let by the owner or the beneficial owner in the case of personal investment companies shall be assigned a risk weight of 35%.

Or. en

Justification





43. Exposures fully and completely secured, to the satisfaction of the competent authorities, by mortgages on residential property which is or shall be occupied or let by the owner or the beneficial owner in the case of personal investment companies shall be assigned a risk weight of 35%.

Or. en

Justification




43. Forderungen, die nach Überzeugung der 43. Forderungen, die nach Überzeugung der


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zuständigen Behörden durch Hypotheken auf Wohnimmobilien, die vom Eigentümer gegenwärtig oder künftig selbst genutzt oder vermietet werden, vollständig abgesichert sind, erhalten ein Risikogewicht von 35 %.

zuständigen Behörden durch Hypotheken auf Wohnimmobilien, die vom Eigentümer bzw. im Falle einer Zweckgesellschaft vom begünstigten Eigentümer gegenwärtig oder künftig selbst genutzt oder vermietet werden, vollständig abgesichert sind, erhalten ein Risikogewicht von 35 %.

Or. en

Justification

Personen mit hohem Eigenkapital kaufen Eigentum häufig über Zweckgesellschaften, die aber keine wirklichen Unternehmen sind.




43. Exposures or any part of an exposure fully and completely secured, to the satisfaction of the competent authorities, by mortgages on residential property which is or shall be occupied or let by the owner shall be assigned a risk weight of 35%.

Or. en

Justification




44a. Exposures to a tenant under a property leasing transactions concerning residential property under which the credit institution is the lessor and the tenant has an option to purchase may be assigned a risk weight of 35%. paragraphs 46 and 47 shall apply for these purposes.


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Or. en

Justification

Islamic law forbids the payment of interest on borrowing, which requires financial institutions to design products that use other financial structures such as rental payments.

Under the Commission's text, Islamic products are treated as a leasing arrangement rather than a residential mortgage and attract higher capital requirements than standard mortgages. This would potentially increase the cost of home ownership for these customers.



48. Subject to the discretion of competent authorities, exposures fully and completely secured, to the satisfaction of the competent authorities, by mortgages on offices or other commercial premises situated within their territory may be assigned a risk weight of 50%.

48. Subject to the discretion of competent authorities, exposures or any part of an exposure fully and completely secured, to the satisfaction of the competent authorities, by mortgages on offices or other commercial premises situated within their territory may be assigned a risk weight of 50%.

Or. en

Justification




50. Subject to the discretion of competent authorities, exposures related to property leasing transactions concerning offices or other commercial premises situated in their territory and governed by statutory provisions whereby the lessor retains full ownership of the rented assets until the tenant exercises his option to purchase, may be assigned a risk weight of 50%.

50. Subject to the discretion of the competent authorities, exposures related to property leasing transactions concerning offices or other commercial premises situated in their territories under which the credit institution is the lessor and the tenant has an option to purchase may be assigned a risk weight of 50% provided that the exposure of the credit institution is fully and completely secured by its ownership of


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the property.

Or. en

Justification

Islamic law forbids the payment of interest on borrowing. Islamic products are therefore treated as a leasing arrangement rather than a residential mortgage.

The suggested amendment addresses technical problems with the Commission’s original proposal to ensure that it fully covers the Ijara type product, by removing the ‘governed by statutory provisions requirement’.


Amendment 565Annex VI, part 1, paragraph 55, point (a)

(a) up to 50% of the market value (or where applicable and if lower 60 % of the mortgage lending value (MLV)) must not exceed 0.3 % of the outstanding loans in any given year;

(a) Losses stemming from lending collateralised by commercial real estate property up to 50% of the market value (or where applicable and if lower 60 % of the mortgage lending value (MLV)) do not exceed 0.3 % of the outstanding loans collateralised by commercial real estate property in any given year;

Or. en

Justification



Amendment 566Annex VI, part 1, paragraph 55, point (b)

(b) overall losses stemming from commercial real estate lending must not exceed 0.5% of the outstanding loans in any given year.

(b) overall losses stemming from lending collateralised by commercial real estate property must not exceed 0.5% of the outstanding loans collateralised by commercial real estate property in any


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given year.

Or. en

Justification



Amendment 567Annes VI, paragraph 58

59. Without prejudice to the provisions contained in paragraphs 59 to 62, the unsecured portion of any item that is past due for more than 90 days shall be assigned a risk weight of :

58. Without prejudice to the provisions contained in paragraphs 59 to 62, the unsecured portion of any item that is past due for more than 90 days shall be assigned a risk weight of :

- 150% if value adjustments are less than 20% of the unsecured part of the exposure gross of value adjustments;

- 150% if value adjustments are less than 20% of the unsecured part of the exposure gross of value adjustments;

- 100% if value adjustments are no less than 20% of the unsecured part of the exposure gross of value adjustments;

- 100% if value adjustments are no less than 20% of the unsecured part of the exposure gross of value adjustments;

- 50%, subject to the discretion of competent authorities, if value adjustments are no less than 50% of the unsecured part of the exposure gross of value adjustments.

- 50%, subject to the discretion of competent authorities, if value adjustments are no less than 50% of the unsecured part of the exposure gross of value adjustments.

In the case of exposures to entities referred to in Article 79 1 a), b) and c), competent authorities may set a number of days past due up to 180 days.

Or. en

Justification

Most of public sector entities all over Europe do take more than 90 days to pay. The suggested solution is to apply the same definition of past due loans as the one provided for by the IRB definition of default which allows competent authorities to set a number which falls within 90 – up to a figure of 180 days for PSE. This amendment must also be seen as outweighing and limiting the effects of amendments 88, 95, 127, 129, 130, 164, 165, 166 and 167 which suggest extending past due to 180 days whatever the approaches and exposure classes.


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Amendment by Eoin Ryan

Amendment 568Annex VI, part 1, paragraph 65, introductory part

65. ‘Covered bonds’, shall mean bonds as defined in Article 22(4) of Directive 85/611/EEC and collateralised by any of the following eligible assets:

65. ‘Covered bonds’, shall mean bonds as defined in Article 22(4) of Directive 85/611/EEC (UCITS) and collateralised by any of the following eligible assets:

Or. en

Justification

This amendment partially recognises existing market flexibility by allowing the inclusion of Step 2 public sector assets, but within a tighter limit of 10%, while at the same time safeguarding the competitiveness of existing EU-based issuers. subparagraphs (a) and (b) of paragraph 65 un-amended would mean that certain high-quality non-EU/EEA Step 2 assets which are currently included up to a proportion not exceeding 20% in cover pools by some EU issuers could no longer be included in the cover pool if the associated covered bond were to qualify for the 10% risk weighting – notwithstanding that these bonds currently qualify for AAA rating by external international credit rating agencies.



(a) exposures to or guaranteed by central governments, central banks, multilateral development banks, international organisations that qualify for the credit quality assessment step 1 as set out in this Annex;

(a) exposures to or guaranteed by central governments in the EU, central banks, multilateral development banks, international organisations that qualify for the credit quality assessment step 1 as set out in this Annex or, provided that they do not exceed 10% of the nominal amount of outstanding covered bonds of issuing institutions, that qualify as a minimum for the credit quality assessment step 2 as set out in this Annex;

Or. en


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(a) exposures to or guaranteed by central governments in the EU and exposures to or guaranteed by central governments, central banks, multilateral development banks, international organisations that qualify for the credit quality assessment step 1 as set out in this Annex or, provided that they do not exceed 10% of the nominal amount of outstanding covered bonds of issuing institutions, that qualify as a minimum for the credit quality assessment step 2 as set out in this Annex;

Or. en

Justification





(a) exposures to or guaranteed by central governments in the EU and exposures to or guaranteed by central governments, central banks, multilateral development banks, international organisations that qualify for the credit quality assessment step 1 as set out in this Annex or, provided that they do not exceed 10% of the nominal amount of outstanding covered bonds of issuing institutions, that qualify as a minimum for


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the credit quality assessment step 2 as set out in this Annex;

Or. en

Justification

Banks are significant investors in covered bonds, especially those which would qualify for a 10% risk weighting under this proposal.

Under subparagraphs (a) and (b) of paragraph 65, while no credit quality restrictions are to be imposed on exposures within the EU, it is proposed that exposures to central governments, central banks, international organisations, public sector entities, regional governments and local authorities outside the EU must be of credit quality step 1.

This means that certain high-quality non-EU/EEA step 2 assets, which are currently included up to a proportion not exceeding 20% in cover pools by some EU issuers, could no longer be included in the cover pool if the associated covered bond were to qualify for the 10% risk weighting – notwithstanding that these bonds currently qualify for AAA rating by external international credit rating agencies.

This amendment partially recognises existing market flexibility by allowing the inclusion of step 2 public sector assets, but within a tighter limit of 10%, while at the same time safeguarding the competitiveness of existing EU-based issuers.



(a)exposures to or guaranteed by central governments, central banks, multilateral development banks, international organisations that qualify for the credit quality assessment step 1 as set out in this Annex;

(a) exposures to or guaranteed by central governments, central banks, multilateral development banks, international organisations in a contracting State to the agreement on the European Economic Area, Switzerland, the United States of America, Canada or Japan that qualify for the credit quality assessment step 2 as set out in this Annex;

Or. en

Justification

Banks are significant investors in covered bonds especially those which would qualify for a 10% risk weighting under this proposal. Under subparagraphs (a) and (b) of paragraph 65, it


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is proposed that exposures to central governments, central banks, international organisations, public sector entities, regional governments and local authorities outside the EU must be of credit quality step 1.

This means that certain high-quality step 2 assets from the European Union, the European Economic Area, Switzerland, the United States of America, Canada or Japan, which are currently included up to a proportion not exceeding 20% in cover pools by some EU issuers, could no longer be included in the cover pool if the associated covered bond were to qualify for the 10% risk weighting – notwithstanding that these bonds currently qualify for AAA rating by external international credit rating agencies.

These amendments partially recognises existing market flexibility by allowing the inclusion of step 2 public sector assets, but within a tighter limit of 10%, while at the same time safeguarding the competitiveness of existing EU-based issuers.



a) les risques sur, ou garantis par, des administrations centrales dans l'UE et les risques sur, ou garantis par, des administrations centrales, des banques centrales, des banques multilatérales de développement ou des organisations internationales, lorsqu'ils relèvent du premier échelon d'évaluation de la qualité du crédit visé dans la présente annexe;

(a) les risques sur, ou garantis par, des administrations centrales dans l'UE, l’EEE et l’OCDE et les risques sur, ou garantis par, des administrations centrales, des banques centrales, des banques multilatérales de développement ou des organisations internationales, lorsqu'ils relèvent du premier échelon d'évaluation de la qualité du crédit visé dans la présente annexe;

Or. fr

Justification

Les points (a) et (b) de la proposition de directive stipulent que les expositions ou garanties des administrations centrales et administrations régionales ou entités du secteur public des pays hors UE ne sont éligibles que lorsqu’elles relèvent du premier échelon d’évaluation de la qualité du crédit (donc sont notées AAA ou AA). Si ce n’est pas le cas, les obligations couvertes par de telles expositions, et détenues par une banque d’un pays membre de l’UE ne seront pas éligibles pour le traitement préférentiel en tant qu’obligations garanties.

Cela signifie que certains actifs de deuxième échelon de haute qualité en dehors de l’UE/EEE, qui ne représentent pas actuellement plus de 20% des fonds communs de certains


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établissements émetteurs de l’UE, ne pourraient plus faire partie des fonds communs dans le cas où l’obligation garantie correspondrait à 10% de la pondération de risque – et ce, bien que ces garanties relèvent actuellement de la classification AAA selon les services internationaux d’informations financières.

Or pour sauvegarder la compétitivité des établissements émetteurs établis dans l'UE, il est nécessaire d'élargir les expositions ou garanties bénéficiant du régime applicable à l'UE à l'ensemble des pays de l'OCDE.



(b) exposures to or guaranteed by public sector entities, regional governments and local authorities that are risk weighted as exposures to institutions or central governments and central banks according to paragraphs 15, 9 or 10 respectively and that qualify for the credit quality assessment step 1 as set out in this Annex;

(b) exposures to or guaranteed by public sector entities, regional governments and local authorities in the EU and exposures to or guaranteed by public sector entities, regional governments and local authorities that are risk weighted as exposures to institutions or central governments and central banks according to paragraphs 15, 9 or 10 respectively and that qualify for the credit quality assessment step 1 as set out in this Annex or, provided that they do not exceed 10% of the nominal amount of outstanding covered bonds of issuing institutions, that qualify as a minimum for the credit quality assessment step 2 as set out in this Annex;

Or. en

Justification



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Or. en

Justification

Banks are significant investors in covered bonds, especially those which would qualify for a 10% risk weighting under this proposal. Under subparagraphs (a) and (b) of paragraph 65, while no credit quality restrictions are to be imposed on exposures within the EU, it is proposed that exposures to central governments, central banks, international organisations, public sector entities, regional governments and local authorities outside the EU must be of credit quality step 1. This means that certain high quality non-EU/EEA step 2 assets, which are currently included up to a proportion not exceeding 20% in cover pools by some EU issuers, could no longer be included in the cover pool if the associated covered bond were to qualify for the 10% risk weighting notwithstanding that these bonds currently qualify for AAA rating by external international credit rating agencies. This amendment partially recognises existing market flexibility by allowing the inclusion of step 2 public sector assets, but within a tighter limit of 10%, while at the same time safeguarding the competitiveness of existing EU-based issuers.




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b) exposures to or guaranteed by public sector entities, regional governments and local authorities in the EU and exposures to or guaranteed by public sector entities, regional governments and local authorities that are risk weighted as exposures to institutions or central governments and central banks according to paragraphs 15, 9 or 10 respectively and that qualify for the credit quality assessment step 1 as set out in this Annex;


Or. en

Justification

As for subparagraph (a) above.


Amendment 577Annex VI, Part 1, paragraph 65, point (b)


(b) exposures to or guaranteed by public sector entities, regional governments and local authorities in the EU and exposures to or guaranteed by public sector entities, regional governments and local authorities that are risk weighted as exposures to institutions or central governments and central banks according to paragraphs 15, 15a, 9 or 10 respectively and that qualify for the credit quality assessment step 1 as set out in this Annex;

Or. en

Justification

Cross reference / Typographical errof. Replaces Amendment 132 of the Radwan draft report.


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(b) exposures to or guaranteed by public sector entities, regional governments and local authorities that are risk weighted as exposures to institutions or central governments and central banks according to paragraphs 15, 9 or 10 respectively in a contracting State to the agreement on the European Economic Area, Switzerland, the United States of America, Canada or Japan that qualify for the credit quality assessment step 2 as set out as set out in this Annex;

Or. en

Justification

Banks are significant investors in covered bonds especially those which would qualify for a 10% risk weighting under this proposal. Under subparagraphs (a) and (b) of paragraph 65, it is proposed that exposures to central governments, central banks, international organisations, public sector entities, regional governments and local authorities outside the EU must be of credit quality step 1.

This means that certain high-quality step 2 assets from the European Union, the European Economic Area, Switzerland, the United States of America, Canada or Japan, which are currently included up to a proportion not exceeding 20% in cover pools by some EU issuers, could no longer be included in the cover pool if the associated covered bond were to qualify for the 10% risk weighting – notwithstanding that these bonds currently qualify for AAA rating by external international credit rating agencies.

These amendments partially recognises existing market flexibility by allowing the inclusion of step 2 public sector assets, but within a tighter limit of 10%, while at the same time safeguarding the competitiveness of existing EU-based issuers.



b) les risques sur, ou garantis par, (b) les risques sur, ou garantis par,


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des entités du secteur public ou des autorités régionales ou locales dans l'UE et les risques sur, ou garantis par, des entités du secteur public ou des autorités régionales ou locales, lorsqu'ils sont pondérés comme des risques sur des établissements ou sur des administrations centrales et des banques centrales conformément aux points 15, 9 ou 10 respectivement et qu'ils relèvent du premier échelon d'évaluation de la qualité du crédit visé dans la présente annexe;

des entités du secteur public ou des autorités régionales ou locales dans l'UE, l’EEE et l’OCDE et les risques sur, ou garantis par, des entités du secteur public ou des autorités régionales ou locales, lorsqu'ils sont pondérés comme des risques sur des établissements ou sur des administrations centrales et des banques centrales conformément aux points 15, 9 ou 10 respectivement et qu'ils relèvent du premier échelon d'évaluation de la qualité du crédit visé dans la présente annexe;

Or. fr

Justification

Les points (a) et (b) de la proposition de directive stipulent que les expositions ou garanties des administrations centrales et administrations régionales ou entités du secteur public des pays hors UE ne sont éligibles que lorsqu’elles relèvent du premier échelon d’évaluation de la qualité du crédit (donc sont notées AAA ou AA). Si ce n’est pas le cas, les obligations couvertes par de telles expositions, et détenues par une banque d’un pays membre de l’UE ne seront pas éligibles pour le traitement préférentiel en tant qu’obligations garanties.

Cela signifie que certains actifs de deuxième échelon de haute qualité en dehors de l’UE/EEE, qui ne représentent pas actuellement plus de 20% des fonds communs de certains établissements émetteurs de l’UE, ne pourraient plus faire partie des fonds communs dans le cas où l’obligation garantie correspondrait à 10% de la pondération de risque – et ce, bien que ces garanties relèvent actuellement de la classification AAA selon les services internationaux d’informations financières.

Or pour sauvegarder la compétitivité des établissements émetteurs établis dans l'UE, il est nécessaire d'élargir les expositions ou garanties bénéficiant du régime applicable à l'UE à l'ensemble des pays de l'OCDE.


Amendment 580Annex VI, part 1, paragraph 65, point (c)

(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out

(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out


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in this Annex. The total exposure of this kind shall not exceed 10% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 10% limit;

in this Annex. The total exposure of this kind shall not exceed 15% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 15% limit. Exposures to institutions with a maturity not exceeding 100 days shall not be comprised by the step 1 requirement but those institutions must as a minimum qualify for credit quality assessment step 2 as set out in this Annex;

Or. en

Justification

A 10% ceiling on the level of substitution assets that may be held in the cover pool is too restrictive for flexible management in this developing sector of financial services, and should be increased to 15%.

Requiring holders of deposits eligible as substitution assets to be of Step 1 quality for covered bonds to carry a 10% risk weighting is excessive, especially where the deposits are of short-term duration (i.e. not exceeding 100 days). Issuers of covered bonds could be constrained from placing deposits, eligible to qualify as substitution assets in given asset pools, within the group structure (e.g. with the parent bank), which would adversely impact on liquidity and could restrict bond issuance in the Union. A step 2 credit rating for such deposit holders would reflect current market practice, while underpinning the low-risk approach which secures such deposits.



(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 10% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 10% limit;

(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 15% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 15% limit. Exposures to institutions with a maturity not exceeding


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100 days shall not be comprised by the step 1 requirement but those institutions must as a minimum qualify for credit quality assessment step 2 as set out this Annex;

Or. en

Justification

A 10% ceiling on the level of substitution assets that may be held in the cover pool is too restrictive for flexible management in this developing sector of financial services, and should be increased to 15%. Requiring holders of deposits eligible as substitution assets to be of Step 1 quality for covered bonds to carry a 10% risk weighting is excessive, especially where the deposits are of short-term duration (i.e. not exceeding 100 days). Issuers of covered bonds could be constrained from placing deposits, eligible to qualify as substitution assets in given asset pools, within the group structure (e.g. with the parent bank), which would adversely impact on liquidity and could restrict bond issuance in the Union. A step 2 credit rating for such deposit holders would reflect current market practice, while underpinning the low-risk approach which secures such deposits.



(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 10% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 10% limit.

(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 15% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 15% limit. Exposures to institutions in the EU with a maturity not exceeding 100 days shall not be comprised by the step 1 requirement but those institutions must as a minimum qualify for credit quality assessment step 2 as set out in this Annex;

Or. en


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Justification

A 10% ceiling on the level of substitution assets that may be held in the cover pool is too restrictive for flexible management in this developing sector of financial services, and should be increased to 15%.

Requiring holders of deposits eligible as substitution assets to be of Step 1 quality for covered bonds to carry a 10% risk weighting is excessive, especially where the deposits are of short-term duration (i.e. not exceeding 100 days). Issuers of covered bonds could be constrained from placing deposits, eligible to qualify as substitution assets in given asset pools, within the group structure (e.g. with the parent bank), which would adversely impact on liquidity and could restrict



(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 10% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 10% limit.

(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 15% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 15% limit. Exposures to institutions with a maturity not exceeding 100 days shall not be comprised by the step 1 requirement but those institutions must as a minimum qualify for credit quality assessment step 2 as set out this Annex;

Or. en

Justification

Requiring holders of deposits eligible as substitution assets to be of Step 1 quality for covered bonds to carry a 10% risk weighting is excessive, especially where the deposits are of short-term duration (i.e. less than 100 days). Issuers of covered bonds could be constrained from placing deposits eligible to qualify as substitution assets in given asset pools within the group structure (e.g. with the parent bank), which would adversely impact on liquidity and could restrict bond issuance in the Union. A Step 2 credit rating for such deposit holders would reflect current market practice, while underpinning a low-risk approach which secures such deposits.


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(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 10% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission of payments from the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 10% limit;

(c) exposures to institutions that qualify for the credit quality assessment step 1 as set out in this Annex. The total exposure of this kind shall not exceed 15% of the nominal amount of outstanding covered bonds of the issuing credit institution. Exposures caused by transmission and management of payments from or liquidation proceeds of the obligors of loans secured by real estate to the holders of covered bonds shall not be comprised by the 15% limit;

Or. en

Justification

The current text is not clear on how payments from borrowers can be managed before being transmitted to bondholders. This creates severe administrative difficulties, as it is entirely impractical for payments from borrowers to be transmitted immediately through to bondholders. The proposed amendment is therefore an important clarification which seeks to ensure that cash flows from borrowers are properly defined and can be properly managed. Also, in line with the position of other member state trade bodies we propose raising the 10% limit to 15%.



c) les risques sur des établissements, lorsqu’ils relèvent du premier échelon d’évaluation de la qualité du crédit visé dans la présente annexe. Le total de ces risques ne dépasse pas 10 % l’encours nominal des obligations garanties de l’établissement de crédit émetteur. Les risques générés par la transmission de paiements des débiteurs de prêts garantis par une sûreté immobilière aux détenteurs d'obligations couvertes n'entrent pas dans le calcul de cette limite de 10%;

(c) les risques sur des établissements, lorsqu’ils relèvent du premier ou du deuxième échelon d’évaluation de la qualité du crédit visé dans la présente annexe. Le total de ces risques ne dépasse pas 20% de l’encours nominal des obligations garanties de l’établissement de crédit émetteur. Les risques générés par la transmission de paiements des débiteurs de prêts garantis par une sûreté immobilière aux détenteurs d'obligations couvertes n'entrent pas dans le calcul de cette limite de 20%;


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Or. fr

Justification

Limiter à un plafond de 10% les biens de substitution qui pourraient être compris dans les fonds communs est une mesure trop restrictive pour la flexibilité d’un secteur de services financiers en expansion. Ce plafond devrait donc être de 20%. Exiger des détenteurs de dépôts admis comme biens de substitution que ceux-ci relèvent du premier échelon d’évaluation afin que les obligations garanties correspondent à une pondération de risque de 10% semble excessif, particulièrement lorsque les dépôts sont à court terme (c.-à-d. quand ils ne dépassent pas 100 jours). Cela pourrait empêcher les établissements émetteurs d’obligations de garantie de faire des dépôts admis comme biens de substitution dans certains fonds communs, ce dans le cadre de la structure de groupe (par ex. avec la banque mère). Cette situation pourrait avoir un impact défavorable sur la liquidité et pourrait limiter l’émission d’obligations au sein de l’Union. Un deuxième échelon d’évaluation de crédit appliqué à ces détenteurs de dépôts correspondrait mieux à la pratique du marché actuel tout en soulignant le fait que peu de risques sont associés à de tels dépôts.


Amendment 586Annex VI, part 1, paragraph 65, point (d)

(d) loans secured by residential real estate or shares in Finnish residential housing companies as referred to in paragraph 44 where only liens that are combined with any prior liens within 80% of the value of the pledged property;

(d) loans secured by residential real estate or shares in Finnish residential housing companies as referred to in paragraph 44 up to the lesser of the principal amount of the liens that are combined with any prior liens and 80% of the value of the pledged property or senior units or debt securities issued by French Fonds Communs de Créances or by securitisation entities governed by the laws of a Member State securitising residential real estate exposures provided that at least 90% of the assets of such Fonds Communs de Créances or securitisation entities governed by the laws of a Member State are composed of first ranking mortgages, and the units or debt securities have a credit assessment by a nominated ECAI which is the most favourable category of credit assessment made by the ECAI in respect of such units or debt securities up to the lesser of the principal amount due under the units or debt securities, the principal amount of the liens, and 80% of the value of the


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pledged properties.

In 2010, the limits applying to such units or debt securities issued by French Fonds Communs de Creances or by securitisation entities governed by the laws of a Member State, as expressed in terms of minimum credit assessment and amount eligible for colateralising covered bonds will be rewied. Exposures caused by transmission and management of payments from or liquidation proceeds of the obligors of loans secured by pledged properties of the senior units or debt securities shall not be comprised in calculating the 90% limit;

Or. en

Justification

This amendment ensures that artificial barriers (such as a cap on the proportion of the covered bond pool comprised of MBS) that have nothing to do with maintaining credit quality are not needlessly established.

Besides, it clarifies the wording to make sure that loans above the loan-to-value (LTV) limit are not completely excluded, but rather that only that portion of the loan that is within the LTV limit is included in the covered bond pool.




(d) loans secured by residential real estate or shares in Finnish residential housing companies as referred to in paragraph 44 up to the lesser of the principal amount of the liens that are combined with any prior liens and 80% of the value of the pledged property or senior units or debt securities issued by French Fonds Communs de Créances or by securitisation entities governed by the laws of a Member State securitising residential real estate exposures provided that at least 90% of the assets of such Fonds Communs de Créances or securitisation entities governed


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by the laws of a Member State are composed of first ranking mortgages, and the units or debt securities qualify for the credit quality assessment step 1 as set out in this Annex, up to the lesser of the principal amount due under the units or debt securities, the principal amount of the liens, and 80% of the value of the pledged property. Exposures caused by transmission and management of payments from or liquidation proceeds of the obligors of loans secured by pledged properties of the senior units or debt securities shall not be comprised in calculating the 90% limit;

Or. en

Justification

The proposed amendment allows for the inclusion of senior units (i.e. AAA securities) of mortgage-backed securities (MBS) and French Fonds Communs de Creances as collateral for covered bonds provided that the mortgages backing these securities are subject to the same restrictions as mortgages directly backing covered bonds.

Loans above the loan-to-value (LTV) limit should not be completely excluded as this would limit access to cheap funding for higher LTV loans, relied upon by many lower income households and first-time buyers.




(d) loans secured by residential real estate or shares in Finnish residential housing companies as referred to in paragraph 44 where only liens that, when combined with any prior liens, fall within 80% of the value of the pledged property; or by senior units issued by French Fonds Communs de Créances or by equivalent securitisation entities governed by the laws of a Member State securitising residential real estate exposures provided that, at least, 90 % of the assets of such Fonds Communs de Créances or of equivalent securitisation


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entities governed by the laws of a Member State are composed of mortgages that are combined with any prior liens within 80% of the value of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the nominal amount of the outstanding issue;

Or. en




(d) loans secured by residential real estate or shares in Finnish residential housing companies as referred to in paragraph 44 where only liens that are combined with any prior liens within 80% of the value of the pledged property; or by senior units issued by French Fonds Communs de Créances or by securitisation entities governed by the laws of a Member State securitising residential real estate exposures provided that, at least, 90% of the assets of such Fonds Communs de Créances or of securitisation entities governed by the laws of a Member State are composed with first rank mortgages that are combined with any prior liens within 80% of the value of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the pledged property;

Or. en

Justification

Requiring holders of deposits eligible as substitution assets to be of Step 1 quality for covered bonds to carry a 10% risk weighting is excessive, especially where the deposits are of short-term duration (i.e. less than 100 days). Issuers of covered bonds could be constrained from placing deposits eligible to qualify as substitution assets in given asset pools within the group structure (e.g. with the parent bank), which would adversely impact on liquidity and could


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restrict bond issuance in the Union. A Step 2 credit rating for such deposit holders would reflect current market practice, while underpinning a low-risk approach which secures such deposits.




(d) loans secured by residential real estate or shares in Finnish residential housing companies as referred to in paragraph 44 where only liens that are combined with any prior liens within 80% of the value of the pledged property or by senior units issued by French Fonds Communs de Créances or by securitisation entities governed by the laws of a Member State securitising residential real estate exposures provided that, at least, 90% of the assets of such Fonds Communs de Créances or of securitisation entities governed by the laws of a Member State are composed with first rank mortgages that are combined with any prior liens within 80% of the value of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the pledged property;

Or. en

Justification

The reference to French Fonds Communs de Créances (FCC) in the Council text gives legitimate recognition to French securitisation entities and it is clearly the intention that such treatment be extended to similar entities in other Member States. However, the use of the word ‘equivalent’ ties the securitisation entities of other Member States to a particular national system.

Regulators from Member States with other legal systems would have difficulty in determining whether their own domestic schemes were equivalent to those under the French (civil code) concept. The law must be clear and the deletion of “equivalent” would ensure a more objective standard.


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The competent authorities may recognize loans secured by residential real estate as eligible where the loan to value ratio of 80% is exceeded up to a maximum level of 90% if the value of the total assets pledged as collateral for the covered bonds exceeds the nominal amount outstanding on the covered bond by at least 10%.

Or. en

Justification

The LTV limit of 80% for residential loans should be replaced by a limit of 90% if the value of the collateral exceeds the amount of the covered bond by at least 10%. A limit of 80% excludes from refinancing a lot of loans granted to individuals by French banks and only benefits markets that split their loans. Raising the limit to 90% is allowed in the current French law and is a provision of the text, for loans secured by commercial loans notwithstanding a different risk. The aim of the proposed amendment is to allow the present French provisions not to be restricted.



(d) loans secured by residential real estate or shares in Finnish residential housing compa-nies as referred to in paragraph 44 where only liens that are combined with any prior liens within 80% of the value of the pledged property.

(d) loans secured by residential real estate or shares in Finnish residential housing companies as referred to in paragraph 44 where only liens that are combined with any prior liens within 80% of the value of the pledged property; or by senior units issued by French Fonds Communs de Créances or by securitisation entities governed by the laws of a Member State securitising


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residential real estate exposures provided that, at least, 90% of the assets of such Fonds Communs de Créances or of securitisation entities governed by the laws of a Member State are composed with first rank mortgages that are combined with any prior liens within 80% of the value of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the pledged property;

Or. en

Justification

The reference to French Fonds Communs de Créances (FCC) gives legitimate recognition to French securitisation entities and it is clearly the intention that such treatment be extended to similar entities in other Member States. However, the use of the word ‘equivalent’ ties the securitisation entities of other Member States to a particular national system.

Regulators from Member States with other legal systems would have difficulty in determining whether their own domestic schemes were equivalent to those under the French (civil code) concept. The law must be clear and the deletion of “equivalent” would ensure a more objective standard.

Amendment by Karin Riis-Jørgensen


(d) loans secured by residential real estate or shares in Finnish residential housing compa-nies as referred to in paragraph 44 where only liens that are combined with any prior liens within 80% of the value of the pledged property.

(d) loans secured by residential real estate or shares in Finnish residential housing compa-nies as referred to in paragraph 44 where only liens that are combined with any prior liens initially within 80% of the value of the pledged property.

Or. en

Justification

This amendment is necessary, since a requirement of continuous compliance with LTV limits will reinforce the negative effect of the new Directive on the economic cycle, because lenders who fund themselves through the issue of covered bonds will be forced to put extra capital aside to cover their credits (like other lenders) and at the same time top up the collateral


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which backs their covered bonds.

Furthermore, a requirement of continuous compliance implies that covered bonds might change their status over time from covered bonds to not covered bond (ordinary bonds). This would pose problems to both bond investors and covered bond issuers and would also create uncertainty concerning the “covered bond” concept in general.


Amendment 594Annex VI, part 1, paragraph 65, point (e)

(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that are combined with any prior liens within 60% of the value of the pledged property. The competent authorities may recognise loans secured by commercial real estate as eligible where the Loan to Value ratio of 60% is exceeded up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds exceed the nominal amount outstanding on the covered bond by at least 10%, and the bondholders' claim meets the legal certainty requirements set out in Annex IX. The bondholders' claim must take priority over all other claims on the collateral.

(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that, when combined with any prior liens, fall within 60% of the value of the pledged property or by senior units issued by French Fonds Communs de Créances or by equivalent securitisation entities governed by the laws of a Member State securitising commercial real estate exposures provided that, at least, 90% of the assets of such Fonds Communs de Créances or of equivalent securitisation entities governed by the laws of a Member State are composed of mortgages that are combined with any prior liens within 60% of the value of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the nominal amount of the outstanding issue. The competent authorities may recognise loans secured by commercial real estate as eligible where the Loan to Value ratio of 60% is exceeded up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds exceed the nominal amount outstanding on the covered bond by at least 10%, and the bondholders' claim meets the legal certainty requirements set out in Annex VIII. The bondholders' claim must take priority over all other claims on the collateral.

Or. en


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(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 up to the lesser of the principal amount of the liens that are combined with any prior liens and 60% of the value of the pledged property or senior units or debt securities issued French Fonds Communs de Créances or by securitisation entities governed by the laws of a Member State securitising residential real estate exposures provided that at least 90% of the assets of such Fonds Communs de Créances or securitisation entities governed by the laws of a Member State are composed of first ranking mortgages, and the units or debt securities qualify for the credit quality assessment step 1 as set out in this Annex, up to the lesser of the principal amount due under the units or debt securities, the principal amount of the liens, and 60% of the value of the pledged property. Exposures caused by transmission and management of payments from or liquidation proceeds of the obligors of loans secured by pledged properties of the senior units or debt securities shall not be comprised in calculating the 90% limit. The competent authorities may raise the Loan to Value ratio of 60% up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds must exceed the nominal amount outstanding on the covered bonds by at least 10%, and the bondholders’ claim meet the legal certainty requirements set out in Annex IX. The bondholders’ claim must take priority over all other claims on the collateral

Or. en


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Justification

This allows for the inclusion of senior units of mortgage-backed securities (MBS) and French Fonds Communs de Creances as collateral for covered bonds provided that the mortgages backing these securities are subject to the same restrictions as mortgages directly backing covered bonds.

Loans above the loan-to-value (LTV) limit should not be completely excluded as this would limit access to cheap funding for higher LTV loans.




(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that are combined with any prior liens within 60% of the value of the pledged property; or by senior units issued by French Fonds Communs de Créances or securitisation entities governed by the laws of a Member State securitising commercial real estate exposures provided that, at least, 90% of the assets of such Fonds Communs de Créances or of securitisation entities governed by the laws of a Member State are composed with first rank mortgage that are combined with any prior liens within 60% of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the nominal amount of the covered bonds issue. The competent authorities may recognise loans secured by commercial real estate as eligible where the Loan to Value ratio of 60% is exceeded up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds exceed the nominal amount outstanding on the covered bond by at least 10%, and the bondholders' claim meets the legal certainty requirements set out in Annex IX. The bondholders' claim must take priority over all other claims on the collateral.


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Or. en

Justification

The reference to French Fonds Communs de Créances (FCC) in the Council text gives legitimate recognition to French securitisation entities and it is clearly the intention that such treatment be extended to similar entities in other Member States. However, the use of the word ‘equivalent’ ties the securitisation entities of other Member States to a particular national system. Regulators from Member States with other legal systems would have difficulty in determining whether their own domestic schemes were equivalent to those under the French (civil code) concept. The law must be clear and the deletion of “equivalent” would ensure a more objective standard.




(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that are combined with any prior liens within 60% of the value of the pledged property; or by senior units issued by French Fonds Communs de Créances or securitisation entities governed by the laws of a Member State securitising commercial real estate exposures provided that, at least, 90% of the assets of such Fonds Communs de Créances or of securitisation entities governed by the laws of a Member State are composed with first rank mortgages that are combined with any prior liens within 60% of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the nominal amount of the covered bonds issue. The competent authorities may recognise loans secured by commercial real estate as eligible where the LTV ratio of 60% is exceeded up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds must exceed the nominal amount outstanding on the covered bond by at least 10%, and the bondholders’ claim meet the legal certainty requirements set out


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in Annex IX. The bondholders’ claim must take priority over all other claims on the collateral.

Or. en

Justification

Requiring holders of deposits eligible as substitution assets to be of Step 1 quality for covered bonds to carry a 10% risk weighting is excessive, especially where the deposits are of short-term duration (i.e. less than 100 days). Issuers of covered bonds could be constrained from placing deposits eligible to qualify as substitution assets in given asset pools within the group structure (e.g. with the parent bank), which would adversely impact on liquidity and could restrict bond issuance in the Union. A Step 2 credit rating for such deposit holders would reflect current market practice, while underpinning a low-risk approach which secures such deposits.



(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that are combined with any prior liens within 60 % of the value of the pledged property; The competent authorities may recognise loans secured by commercial real estate as eligible where the LTV ratio of 60% is exceeded up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds must exceed the nominal amount outstanding on the covered bond by at least 10%, and the bondholders' claim meet the legal certainty requirements set out in Annex IX. The bondholders' claim must take priority over all other claims on the collateral.

(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that are combined with any prior liens within 60% of the value of the pledged property; or by senior units issued by French Fonds Communs de Créances or securitisation entities governed by the laws of a Member State securitising commercial real estate exposures provided that, at least, 90% of the assets of such Fonds Communs de Créances or of securitisation entities governed by the laws of a Member State are composed with first rank mortgages that are combined with any prior liens within 60% of the pledged property and the units qualify for the credit quality assessment step 1 as set out in this Annex where such units do not exceed 20% of the nominal amount of the covered bonds issue. The competent authorities may recognise loans secured by commercial real estate as eligible where the LTV ratio of 60% is exceeded up to a maximum level of 70% if the value of


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the total assets pledged as collateral for the covered bonds must exceed the nominal amount outstanding on the covered bonds by at least 10%, and the bondholders’ claim meet the legal certainty requirements set out in Annex IX. The bondholders’ claim must take priority over all other claims on the collateral.

Or. en

Justification

As per subparagraph (d) above.Also, typographical correction of “bonds” for “bond”.

Amendment by Karin Riis-Jørgensen


(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that are combined with any prior liens within 60% of the value of the pledged property. The competent authorities may recognise loans secured by commercial real estate as eligible where the Loan to Value ratio of 60% is exceeded up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds exceed the nominal amount outstanding on the covered bond by 10%, and the bondholders´ claim meets the legal certainty requirements set out in Annex IX. The bondholders´ claim must take priority over all other claims on the collateral.

(e) loans secured by commercial real estate or shares in Finnish housing companies as referred to in paragraph 49 where only liens that are combined with any prior liens initially within 60% of the value of the pledged property. The competent authorities may recognise loans secured by commercial real estate as eligible where the Loan to Value ratio of 60% is exceeded up to a maximum level of 70% if the value of the total assets pledged as collateral for the covered bonds exceed the nominal amount outstanding on the covered bond by 10%, and the bondholders´ claim meets the legal certainty requirements set out in Annex IX. The bondholders´ claim must take priority over all other claims on the collateral.

Or. en

Justification

See amendment to Annex VI, part 1, paragraph 65, point (d).


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Amendment by ◄Gay Mitchell►

Amendment 600Annex VI, part 1, paragraph 65, point (e a) (new)

(ea) loans secured by ships where only liens that are combined with any prior liens within 60% of the value of the pledged ship.

Or. en

Justification

The scope of the expression “collateralised” at the end of 65 (f) needs to be clarified so as to make it clear that the requirements of paragraph 65(a) to (f) apply to the 100% of nominal assets required to back the covered bonds in issue, but not to any excess asset coverage above that 100% requirement, but which member States may allow so as to ensure additional protection in law against the covered bonds in issue. It is also necessary to clarify that the 100% nominal asset backing can include cross-currency derivatives which may be used to hedge the cover pool’s asset exposures against the

Amendment by ◄José Manuel García-Margallo y Marfil►

Amendment 601Annex VI, part 1, paragraph 65, point (e a) (new)

(ea) loans secured by ships where only liens that are combined with any prior liens within 60% of the value of the pledged ship.

Or. en

Justification

The scope of the expression “collateralised” at the end of 65 (f) needs to be clarified so as to make it clear that the requirements of paragraph 65(a) to (f) apply to the 100% of nominal assets required to back the covered bonds in issue, but not to any excess asset coverage above that 100% requirement, but which member States may allow so as to ensure additional protection in law against the covered bonds in issue. It is also necessary to clarify that the 100% nominal asset backing can include cross-currency derivatives which may be used to hedge the cover pool’s asset exposures against the


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Amendment 602Annex VI, part 1, paragraph 65, subparagraph 1 a (new)

For these purposes -"collateralised" - means exposures as described and subject to the restrictions in subparagraph 1, points (a) to (ea) which are:

(i) dedicated to the protection of holders of covered bonds against losses; and

(ii) of a nominal amount equal to that of outstanding covered bonds of issuing institutions (after taking into account any cross currency derivatives which hedge those exposures against those bonds).

Or. en

Justification

See justification to par. 65, point (e) a (new) by G. Mitchell.


Amendment 603Annex VI, part 1, paragraph 65, subparagraph 1 a (new)

For these purposes -"collateralised" - means exposures as described and subject to the restrictions in subparagraph 1, points (a) to (ea) which are:

(i) dedicated to the protection of holders of covered bonds against losses; and

(ii) of a nominal amount equal to that of outstanding covered bonds of issuing institutions (after taking into account any cross currency derivatives which hedge those exposures against those bonds).

Or. en


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Justification

See justification to par. 65, point (e) a (new) by J.M. Garcia-Margallo.


Amendment 604Annex VI, part 1, paragraph 65, subparagraph 1 b (new)

Where covered bonds are collateralised, Member States may permit additional exposures, whether or not described or qualifying under restrictions in subparagraphs (a) to (ea), to be dedicated in law to the protection of those covered bonds against losses.

Or. en

Justification



Amendment 605Annex VI, part 1, paragraph 65, subparagraph 1 b (new)

Where covered bonds are collateralised, Member States may permit additional exposures, whether or not described or qualifying under restrictions in subparagraph 1, points (a) to (ea), to be dedicated in law to the protection of those covered bonds against losses.

Or. en

Justification



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Amendment 606Annex VI, part 1, paragraph 65, subparagraph 1 c (new)

Until 31 December 2010 the 20% limit for senior units issued by French Fonds Communs de Créances or by securitisation entities as specified in subparagraph 1, points (d) and (e) does not apply provided that those senior units have a credit assessment by a nominated ECAI which is the most favourable category of credit assessment made by the ECAI in respect of covered bonds. Before the end of this period this derogation shall be reviewed and consequent to such review the Commission may as appropriate extend this period in accordance with the procedure set out in Article 151 with or without a further review clause.

Or. en

Justification



Amendment 607Annex VI, part 1, paragraph 65, subparagraph 1 c (new)

Until 31 December 2010 the 20% limit for senior units issued by French Fonds Communs de Créances or by securitisation entities as specified in subparagraph 1, points (d) and (e) does not apply provided that those senior units have a credit assessment by a nominated ECAI which is the most favourable category of credit assessment made by the ECAI in respect of covered bonds. Before the end of this period this derogation shall be reviewed and consequent to such review the Commission may as appropriate extend this


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period in accordance with the procedure set out in Article 151 with or without a further review clause.

Or. en

Justification



Amendment 608Annex VI, part 1, paragraph 65, subparagraph 1 d (new)

1d. Until 31 December 2010 the figure of 60% indicated in subparagraph 1 point (ea) can be replaced with a figure of 70%. Before the end of this period this derogation shall be reviewed and consequent to such review the Commission may as appropriate extend this period in accordance with the procedure set out in Article 151 with or without a further review clause.

Or. en

Justification

See justification to par. 65, point (e) a (new) by G. Mitchell


Amendment 609Annex VI, part 1, paragraph 65, subparagraph 1 d (new)

1d. Until 31 December 2010 the figure of 60% indicated in subparagraph 1 point (ea) can be replaced with a figure of 70%. Before the end of this period this derogation shall be reviewed and consequent to such review the Commission may as appropriate extend this period in


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accordance with the procedure set out in Article 151 with or without a further review clause.

Or. en

Justification




70. Short-term exposures on an institution or corporate for which a credit assessment by a nominated ECAI is available shall be assigned a risk weight according to Table 6 in accordance with the mapping by the competent authorities of the credit assessments of eligible ECAIs to six steps in a credit quality assessment scale:

70. Short-term exposures on an credit institution or corporate for which a credit assessment by a nominated ECAI is available shall be assigned a risk weight according to Table 6 in accordance with the mapping by the competent authorities of the credit assessments of eligible ECAIs to six steps in a credit quality assessment scale:

Or. en

Justification




86. Where a credit institution provides credit protection for a number of exposures under terms that the nth default among the exposures shall trigger payment and that this credit event shall terminate the contract, if the product has an external credit assessment from an eligible ECAI the risk weights prescribed Articles 78 to 83 shall be applied.

86. Where a credit institution provides credit protection for a number of exposures under terms that the nth default among the exposures shall trigger payment and that this credit event shall terminate the contract, if the product has an external credit assessment from an eligible ECAI the risk weights prescribed Articles 94 to 101 shall be


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If the product is not rated by an eligible ECAI, the risk weights of the exposures included in the basket will be aggregated, excluding n-1 exposures, up to a maximum of 1250% and multiplied by the nominal amount of the protection provided by the credit derivative to obtain the risk weighted asset amount. The n-1 exposures to be excluded from the aggregation shall be determined on the basis that they shall include those exposures each of which produces a lower risk-weighted exposure amount than the risk-weighted exposure amount of any of the exposures included in the aggregation.

applied. If the product is not rated by an eligible ECAI, the risk weights of the exposures included in the basket will be aggregated, excluding n-1 exposures, up to a maximum of 1250% and multiplied by the nominal amount of the protection provided by the credit derivative to obtain the risk weighted asset amount. The n-1 exposures to be excluded from the aggregation shall be determined on the basis that they shall include those exposures each of which produces a lower risk-weighted exposure amount than the risk-weighted exposure amount of any of the exposures included in the aggregation.

Or. en

Justification



Amendment 612Annex VI, part 2, paragraph 9, point (c a) (new)

(ca) in case at least two banks use the ECAI’s individual credit assessment for bond issuing and/or assessing credit risks.

Or. en

Justification

In order to providing for the full credibility of ECAI’s individual credit assessment, the amendment makes for greater rigour in authorising and recognising the new rating agencies and guarantees the reliability of the judgements the ECAIs issue on the borrower’s creditworthiness. As a matter of fact, the market credibility is one of the most important requirement to recognise the eligible ECAI and market acceptance of them represents a significant proof of ECAIs’ reliability.


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Amendment 613Annex VII, part 1, paragraph 3, subparagraph 4

Risk weight (RW) = LGD*(N[.... Risk weight (RW) = (LGD*N[....

Or. en

Justification




In assigning risk weights to specialised lending exposures institutions shall take into account the following factors: Financial strength, political and legal environment, transaction and/or asset characteristics, strength of the sponsor and developer including any public private partnership income stream, security package.

In assigning risk weights to specialised lending exposures credit institutions shall take into account the following factors: Financial strength, political and legal environment, transaction and/or asset characteristics, strength of the sponsor and developer including any public private partnership income stream, security package.

Or. en

Justification



Amendment 615Annex VII, part 1, paragraph 7

7. For purchased corporate receivables, refundable purchase discounts, collateral or partial guarantees that provide first-loss protection for default losses, or both, may be treated as first-loss positions under the IRB securitisation framework.

7. For purchased corporate receivables, refundable purchase discounts, collateral or partial guarantees that provide first-loss protection for default losses, dilution losses, or both, may be treated as first-loss positions under the IRB securitisation framework.


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Or. en

Justification

The German version of the COM text already included "dilution losses". For the English version, this amendment is needed.



Risk weight: LGD*(N[...

Risk weight (RW): (LGD*N[...

Or. en

Justification




10. Bei Retailforderungen, die durch Immobilien abgesichert sind, wird die nach der unter Nummer 9 angegebenen Formel ermittelte Korrelation durch eine Korrelation (R) von 0,15 ersetzt.

10. Bei Hypothekendarlehen und Grundpfandrechten an Einzelpersonen wird die nach der unter Nummer 9 angegebenen Formel ermittelte Korrelation durch eine Korrelation (R) von 0,15 ersetzt.

Or. de

Justification

Diese Formulierung ist zu wählen, um die Einheitlichkeit zwischen Basel und der EU-Regelung zu gewährleisten.


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15. Subject to approval of the competent authorities, a credit institution may employ different approaches to different portfolios where the credit institution itself uses different approaches internally. Where a credit institution is permitted to use different approaches, the credit institution shall demonstrate to the competent Authorities that the choice is made consistently and is not determined by regulatory arbitrage considerations.

15. A credit institution may employ different approaches to different portfolios where the credit institution itself uses different approaches internally. Where a credit institution uses different approaches, the credit institution shall demonstrate to the competent Authorities that the choice is made consistently and is not determined by regulatory arbitrage considerations

Or. en

Justification

The possibility to employ different approaches for equity exposures should be allowed in all the 25 Member States and not as a national discretion, as in any cases the credit institution ought to demonstrate to the competent authorities that the choice is made consistently. Otherwise, credit institutions operating across borders could be subject to materially different treatment to competitors operating in the same market. This would be inconsistent with the Single Market objective.



16. Notwithstanding paragraph 15 competent authorities may allow the attribution of risk weighted exposure amounts for equity exposures to ancillary services undertakings according to the treatment of other non credit-obligation assets.

16. Notwithstanding paragraph 15 competent authorities may allow the attribution of risk weighted exposure amounts for equity exposures to ancillary services undertakings according to the treatment of other non credit-obligation assets.

The same risk weight receive equity exposures to regional or central credit institutions with which the lending credit institution is associated in an alliance of risks operating under the same trademark.


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Or. enJustification

Other groups like co-operative groups which for example adhere to a joint (mutual) guarantee scheme or system or form an alliance of risk, which protect the credit institution and in particular ensure its liquidity and solvency (as stipulated by directive 94/19/EC) should be treated equally compared to a group referred to in paragraph 7. There are entities that usually belong to all of these members which guarantee the existence of the single credit institution and thereby increase financial stability of the whole group and the financial sector as a whole. For all members of such a group having an institutional protection scheme together are highly interested in absorbing possible losses and therefore guarantee the existence of such a counterparty, the risk situation can be seen at least as good as within a group referred to in paragraph 7. Such a group is operating under the same brand and therefore appears as a unit within the market.



20. The risk weighted exposure amounts shall be calculated according to the formulas in paragraph 3. If institutions do not have sufficient information to use the definition of default set out in part 4, paragraphs 44 to 48, a scaling factor of 1.5 shall be applied to the risk weights.

20. The risk weighted exposure amounts shall be calculated according to the formulas in paragraph 3. If credit institutions do not have sufficient information to use the definition of default set out in part 4, paragraphs 44 to 48, a scaling factor of 1.5 shall be applied to the risk weights.

Or. en

Justification




23. The risk weighted exposure amounts shall be the potential loss on the institution’s equity exposures as derived using internal value-at-risk models subject to the 99th percentile, one-tailed confidence interval of

23. The risk weighted exposure amounts shall be the potential loss on the institution’s equity exposures as derived using internal value-at-risk models subject to the 99th percentile, one-tailed confidence interval of


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the difference between quarterly returns and an appropriate risk-free rate computed over a long-term sample period, multiplied by 12.5. The risk weighted exposure amounts at the individual exposure level shall not be less than the sum of minimum risk weighted exposure amounts required under the PD/LGD Approach and the corresponding expected loss amounts multiplied by 12.5.

quarterly returns computed over a long-term sample period, multiplied by 12.5.

Or. en

Justification

Under the Internal Models (“VaR” models), an indirect floor has been assigned. Such a floor results in banks that have developed equity VaR models would have to link the PD/LGD floors to the VaR model on an exposure by exposure basis. A VaR model is essentially a portfolio model with one outcome. Isolating individual exposures from the portfolio would be inconsistent with the purpose of a VaR model in which portfolio(concentration and correlation) effects have been modelled. This indirect threshold would provide a disincentive for the most Advanced Approach, because the risk weight under the VaR approach can only be equal or higher than under the PD/LGD approach. The VaR approach is the most risk sensitive and sophisticated approach and once the internal VaR model meets the validation requirements of the home supervisor, the VaR outcome should be used for capital cost calculations without ensuing recalibration.



23. The risk weighted exposure amounts shall be the potential loss on the institution’s equity exposures as derived using internal value-at-risk models subject to the 99th percentile, one-tailed confidence interval of the difference between quarterly returns and an appropriate risk-free rate computed over a long-term sample period, multiplied by 12.5. The risk weighted exposure amounts at the individual exposure level shall not be less than the sum of minimum risk weighted exposure amounts required under the

23. The risk weighted exposure amounts shall be the potential loss on the credit institution’s equity exposures as derived using internal value-at-risk models subject to the 99th percentile, one-tailed confidence interval of the difference between quarterly returns and an appropriate risk-free rate computed over a long-term sample period, multiplied by 12.5. The risk weighted exposure amounts at the individual exposure level shall not be less than the sum of minimum risk weighted exposure amounts


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PD/LGD Approach and the corresponding expected loss amounts multiplied by 12.5.

required under the PD/LGD Approach and the corresponding expected loss amounts multiplied by 12.5 and calculated on the basis of the PD values set out in Annex VII Part 2, paragraph 22, subparagraph (a) and the corresponding LDG values set out in Annex VII, Part 2, paragraphs 23 and 24.

Or. en

Justification

Cross reference / Typographical error. Substitutes Amendment 151 of Radwan draft report.



25. The risk weighted exposure amounts shall be calculated according to the formula:

25. The risk weighted exposure amounts shall be calculated according to the formula:

Risk-weighted exposure amount = 100% * exposure value

Risk-weighted exposure amount = 100% * exposure value except for when the exposure is a residual value in which case it should be provisioned for each year and will be calculated as follows: 1/t * 100% * exposure value; where t is the number of years of the lease contract term.

Or. en

Justification

If a lessee is in default before the end of the lease contract term, the credit risk relating to this event is taken into account via LGDs. In the other case of a lessee not being in default, the residual value of the leased asset is exclusively subject to market risk and, even then, this risk is only realised at the end of the contract. The credit institution should take into account a portion of the residual value risk each year over the lease contract term. The most simple and effective way to determine this proportion is to take into account the same fraction of the exposure every year.


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Amendment 624Annex VII, part 1, paragraph 29, Table 2

Text proposed by the Commission

Remaining Maturity

category 1

category 2

category 3

category 4

category 5

Less than 2.5 years 0% 5% 35% 100% 625%

Equal or more than 2.5 years EL

5% 10% 35% 100% 625%

Amendment by Parliament

Remaining Maturity

category 1

category 2

category 3

category 4

category 5

Less than 2.5 years 0% 0.4% 2.8% 8% 50%

Equal or more than 2.5 years

0.4% 0.8% 2.8% 8% 50%

Or. en

Justification




Where competent authorities have authorised a credit institution to generally assign preferential risk weights of 50% to exposures in category 1, and 70% to exposures in category 2, the EL value for exposures in category 1 shall be 0%, and for exposures in category 2 shall be 5%.

Where competent authorities have authorised a credit institution to generally assign preferential risk weights of 50% to exposures in category 1, and 70% to exposures in category 2, the EL value for exposures in category 1 shall be 0%, and for exposures in category 2 shall be 0.4%.

Or. en


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Justification




30. The expected loss amounts for equity exposures where the risk weighted exposure amounts are calculated according to the methods set out in paragraphs 17 to 19, shall be calculated according to the following formula:

Expected loss amount = EL × exposure value

The EL values shall be the following:

Expected loss (EL) = 10% for private equity exposures in sufficiently diversified portfolios

Expected loss (EL) = 10% for exchange traded equity exposures.

Expected loss (EL) = 30% for all other equity exposures.

30. The expected loss amounts for equity exposures where the risk weighted exposure amounts are calculated according to the methods set out in paragraphs 17 to 19, shall be calculated according to the following formula:

Expected loss amount = EL × exposure value

The EL values shall be the following:

Expected loss (EL) = 0.8% for private equity exposures in sufficiently diversified portfolios

Expected loss (EL) = 0.8% for exchange traded equity exposures.

Expected loss (EL) = 2.4% for all other equity exposures.

Or. en

Justification




6. Credit institutions using own LGD estimates may recognise unfunded credit protection by adjusting PDs subject to paragraph 11.

6. Credit institutions using own LGD estimates may recognise unfunded credit protection by adjusting PDs subject to paragraph 10.


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Or. en

Justification




10. Notwithstanding paragraph 8, if a credit institution is permitted to use own LGD estimates for exposures to corporates, institutions, central governments and central banks, unfunded credit protection may be recognised by adjusting PD or LGD estimates subject to minimum requirements as specified in part 4 and approval of competent authorities. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the guarantor.

10. Notwithstanding paragraph 8, if a credit institution is permitted to use own LGD estimates for exposures to corporates, institutions, central governments and central banks, unfunded credit protection may be recognised by adjusting PD and/or LGD subject to minimum requirements as specified in part 4 and approval of competent authorities. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the guarantor.

Or. en

Justification

Since the ultimate repayment source is represented by the guarantor of the exposure, it is the PD but also the LGD estimates of this guarantor that reflect the risk of the bank that ultimately is incurred. The PD substitution implies that the bank incurs a risk on the guarantor; consequently, it is this party’s LGD that should be used. Double default methodology is deemed to change this stipulation.



10. Notwithstanding paragraph 8, if a credit institution is permitted to use own LGD estimates for exposures to corporates, institutions, central governments and central

10. Notwithstanding paragraph 8, if a credit institution is permitted to use own LGD estimates for exposures to corporates, institutions, central governments and central


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banks, unfunded credit protection may be recognised by adjusting PD or LGD estimates subject to minimum requirements as specified in part 4 and approval of competent authorities. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the guarantor.

banks, unfunded credit protection may be recognised by adjusting PD and/or LGD estimates subject to minimum requirements as specified in part 4 and approval of competent authorities. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the guarantor.

Or. en

Justification

Since the ultimate repayment source is represented by the guarantor of the exposure, it is the PD but also the LGD estimates of this guarantor that reflect the risk of the bank that ultimately is incurred. The PD substitution implies that the bank incurs a risk on the guarantor; consequently, it is this party’s LGD that should be used. Double default methodology is deemed to change this stipulation.



10. Notwithstanding paragraph 8, if a credit institution is permitted to use own LGD estimates for exposures to corporates, institutions, central governments and central banks, unfunded credit protection may be recognised by adjusting PD or LGD estimates subject to minimum requirements as specified in part 4 and approval of competent authorities. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the guarantor.

10. Notwithstanding paragraph 8, if a credit institution is permitted to use own LGD estimates for exposures to corporates, institutions, central governments and central banks, unfunded credit protection may be recognised by adjusting PD and/or LGD estimates subject to minimum requirements as specified in part 4 and approval of competent authorities. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the guarantor.

Or. en

Justification

Since the ultimate repayment source is represented by the guarantor of the exposure, it is the


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PD but also LGD estimates of this guarantor that reflect the risk of the bank that ultimately is incurred.


Amendment 631Annex VII, part 2, paragraph 10 a (new)

10a. Notwithstanding paragraph 8, if a credit institution is permitted to use own LGD estimates for exposures in covered bonds, the institution may use data provided by the issuing institution.

Or. en

Justification

When calculating the capital requirements under the advanced approach, a covered bond investor has to estimate the probability of default (PD) of the issuer and the loss given default (LGD) of the bond without having access to the relevant LGD-data. The investor will not know the LGDs of the cover pool and he is prevented from using third party data (i.e. the issuer given data, if available) as own estimates. In order to assert its high credit quality, investors must be permitted to use third party data in calculating the capital requirements on covered bonds under the advanced approach.



14. The competent authorities may allow for exposures to corporates situated in the Community and having consolidated sales and consolidated assets of less than EUR 500 million the use of M as set out in paragraph 11.

14. The competent authorities may allow for exposures to corporates situated in the Community and having consolidated sales or consolidated assets of less than EUR 500 million the use of M as set out in paragraph 11.

Or. en

Justification

The right of the member states to exempt certain corporates from the use of effective maturity in the advanced IRB approach is likely not to apply for housing and real estate corporates in Germany as they often exceed the threshold value in their consolidated assets due to their


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high investment costs. The maturity adjustments impact especially the housing and real estate corporates in Germany and Austria, because they are largely funded by mortgage loans with long maturities. Experience in the past shows that this financing scheme does not result in an increase of risk.



20. Credit institutions shall provide own estimates of LGDs subject to minimum requirements as specified in part 4 and approval of competent authorities. For dilution risk of purchased receivables an LGD value of 75% shall be used. If a credit institution can decompose its EL estimates for dilution risk of purchased receivables into PDs and LGDs in a reliable manner, the PD estimate may be used.

20. Credit institutions shall provide own estimates of LGDs subject to minimum requirements as specified in part 4 and approval of competent authorities. For dilution risk of purchased receivables an LGD value of 75% shall be used. If a credit institution can decompose its EL estimates for dilution risk of purchased receivables into PDs and LGDs in a reliable manner, the LGD estimate may be used.

Or. en

Justification




21. Unfunded credit protection may be recognised by adjusting PD or LGD estimates, subject to minimum requirements as specified in part 4, paragraphs 95 to 103 and approval by the competent authorities, either in support of an individual exposure or a pool of exposures. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the

21. Unfunded credit protection may be recognised by adjusting PD or LGD estimates, subject to minimum requirements as specified in part 4, paragraphs 95 to 103 and approval by the competent authorities, either in support of an individual exposure or a pool of exposures. A credit institution shall not assign guaranteed exposures an adjusted PD or LGD such that the adjusted risk weight would be lower than that of a comparable, direct exposure to the


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guarantor. guarantor, such as that resulting from the application of the same approach for the guaranteed exposure and the guarantor.

Or. en

Justification

It is proposed to amend §21 of part 2 of Appendix VII, incorporating a proposal intended to be applied only when the exposure guaranteed and the guarantor are covered by an identical internal rating method as the current treatment does not appear to be prudentially justified.


Amendment 635Annex VII, part 2, paragraph 22, point (c)

(c) 0.40% for exchange traded equity exposures including other short positions as set out in part 1, paragraph 17;

(c) 0.40% for exchange traded equity exposures including other short positions as set out in part 1, paragraph 18;

Or. en

Justification



Amendment 636Annex VII, part 2, paragraph 22, point (d)

(d) 1.25% for all other equity exposures including other short positions as set out in part 1, paragraph 17.

(d) 1.25% for all other equity exposures including other short positions as set out in part 1, paragraph 18.

Or. en

Justification



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4. The exposure value for leases shall be the discounted lease payment stream.

4. The exposure value for leases shall be the discounted minimum lease payments.

Minimum lease payments are the payments over the lease term that the lessee is or can be required to make and any bargain option (i.e. option for which the exercise is reasonably certain). Any guaranteed residual value, fulfilling the set of conditions in Annex VIII, part 1, paragraphs 26 to 28 regarding the eligibility of protection providers as well as the minimum requirements for recognising other types of guarantees provided in Annex VIII, part 2, paragraphs 14 to 18, should also be included in the minimum lease payments.

Or. en

Justification

The Commission's text calls for a split between lease payment streams and residual values. This has practical application difficulties. To avoid this, lease exposures should be equivalent to IAS 17 (the IASB standard that sets out accounting rules for leasing) minimum lease payments as these include guaranteed residual values.



4. Bei einem Leasing entspricht der Forderungswert dem abgezinsten Leasingzahlungsstrom.

4. Bei einem Leasing entspricht der Forderungswert den abgezinsten Mindestleasingzahlungen.

Mindestleasingzahlungen sind Zahlungen über den Leasingzeitraum, zu denen der Leasingnehmer verpflichtet wird oder werden kann und jegliche günstige (sehr wahrscheinlich auszuübende) Kaufoption. Jeglicher garantierter Restwert, der die in Anhang VIII, Teil 1, Absatz 26 bis 28


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ausgeführten Bedingungen für die Ansprüche der Sicherungsgeber sowie die in Anhang VIII, Teil 2, Absätze 14 bis 18 genannten Mindestanforderungen erfüllt, sollte auch in die Mindestleasingzahlungen einbezogen werden.

Or. de

Justification

Vermeidung von Mehrdeutigkeit des Begriffs der Leasingzahlungsströme. Ferner werden die übliche Geschäftspraxis bei Leasingverhältnissen und die wirtschaftliche und kaufmännische Substanz eines Leasinggeschäfts beachtet.



9. The exposure value for undrawn purchased commitments of revolving purchased corporate receivables exposures shall be calculated as the committed but undrawn amount multiplied by 75%.

9. The exposure value for undrawn purchased commitments of revolving purchased corporate receivables exposures shall be calculated as the committed but undrawn amount multiplied by 75%.

For undrawn purchased commitments, that are unconditionally cancellable, or that effectively provide for automatic cancellation, at any time by the institution without prior notice, a conversion factor of 0 % shall apply. To apply a conversion factor of 0% credit institutions shall actively monitor the financial condition of the obligor, and their internal control systems shall enable them to immediately detect a deterioration in the credit quality of the obligor.

In all other cases, credit institutions which meet the minimum requirements for the use of own estimates of conversion factors as specified in part 4 may use their own estimates of conversion factors across different product types, subject to approval of the competent authorities.


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Or. enJustification

The treatment of the undrawn commitments of revolving purchased receivables exposures (§9) is on two points more restrictive than that of undrawn credit lines (§11). Such restrictions introduce a disadvantage for operations of purchase of receivables. It is consequently suggested to add after §9 the provisions applicable to undrawn credit lines : possibility to use a credit conversion factor of 0% and possibility for the establishments to estimate credit conversion factors (see § 11 (a) and (d)).



10. Where an exposure takes the form of securities sold, posted or lent under a repurchase transaction or securities or commodities lending or borrowing transaction, the exposure value shall be the value of the securities or commodities determined in accordance with Article 74. Where the Financial Collateral Comprehensive Method as set out under Annex VIII, part 3 is used, the exposure value shall be increased by the volatility adjustment appropriate to such securities or commodities as set out therein.

10. Where an exposure takes the form of securities or commodities sold, posted or lent under a repurchase transaction or securities or commodities lending or borrowing transaction, the exposure value shall be the value of the securities or commodities determined in accordance with Article 74. Where the Financial Collateral Comprehensive Method as set out under Annex VIII, part 3 is used, the exposure value shall be increased by the volatility adjustment appropriate to such securities or commodities as set out therein.

Or. en

Justification

The German verion of the COM proposal already included "or commodities". For the English version, this amendment is needed as an alignment to the Council proposal.


Amendment 641Annex VII, part 3, paragraph 11, point (a)

(a) for credit lines which are uncommitted, are unconditionally cancellable, or that effectively provide for cancellation, at any time by the institution without prior notice, a conversion factor of 0% shall apply. To

(a) for credit lines which are uncommitted, that are unconditionally cancellable at any time by the institution without prior notice, or that effectively provide for automatic cancellation due to


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apply a conversion factor of 0% credit institutions shall actively monitor the financial condition of the obligor, and their internal control systems shall enable them to immediately detect a deterioration in the credit quality of the obligor. Undrawn retail credit lines may be considered as unconditionally cancellable if the terms permit the credit institution to cancel them to the full extent allowable under consumer protection and related legislation.

deterioration in a borrower's credit worthiness, a conversion factor of 0% shall apply. To apply a conversion factor of 0% credit institutions shall actively monitor the financial condition of the obligor, and their internal control systems shall enable them to immediately detect a deterioration in the credit quality of the obligor. Undrawn retail credit lines may be considered as unconditionally cancellable if the terms permit the credit institution to cancel them to the full extent allowable under consumer protection and related legislation.

Or. en

Justification

The Commission's text contains an inconsistency between the capital treatment of payment system commitments under the Standardised and Foundation approaches.

This could have the effect of creating a capital charge for certain guarantees within payment systems. If not amended, this divergence will create a regulatory disincentive to arrangements that are risk reducing for the public and financial system.

The wording should be rephrased to match the equivalent clause applying to the standardised approach.


Amendment 642Annex VII, part 3, paragraph 11, point (a)

(a) For credit lines which are uncommitted, that are unconditionally cancellable, or that effectively provide for automatic cancellation, at any time by the institution without prior notice, a conversion factor of 0 % shall apply. To apply a conversion factor of 0% credit institutions shall actively monitor the financial condition of the obligor, and their internal control systems shall enable them to immediately detect a

(a) For credit lines which are uncommitted, that are unconditionally cancellable, or that effectively provide for automatic cancellation, at any time by the credit institution without prior notice, a conversion factor of 0 % shall apply. To apply a conversion factor of 0% credit institutions shall actively monitor the financial condition of the obligor, and their internal control systems shall enable them to immediately


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deterioration in the credit quality of the obligor. Undrawn retail credit lines may be considered as unconditionally cancellable if the terms permit the credit institution to cancel them to the full extent allowable under consumer protection and related legislation.

detect a deterioration in the credit quality of the obligor.

Or. en

Justification

Cross reference / Typographical error. Replaces Amendment 161 of the Radwan draft report.


Amendment 643Annex VII, part 3, paragraph 11, point (d)

(d) Kreditinstitute, die die Mindestvoraussetzungen für die Verwendung eigener Schätzungen von Umrechnungsfaktoren gemäß Teil 4 erfüllen, können mit Genehmigung der zuständigen Behörden ihre eigenen Schätzungen der Umrechnungsfaktoren für die verschiedenen Produktarten verwenden.

(d) Kreditinstitute, die die Mindestvoraussetzungen für die Verwendung eigener Schätzungen von Umrechnungsfaktoren gemäß Teil 4 erfüllen, können mit Genehmigung der zuständigen Behörden ihre eigenen Schätzungen der Umrechnungsfaktoren für die verschiedenen Produktarten verwenden, soweit es sich nicht um jederzeit kündbare oder automatisch gekündigte Kreditlinien handelt, für die Ziffer a) gilt.

Or. de

Justification

Andernfalls bestünden Zweifel, ob die Freistellung der Kreditlinien nach Ziffer a) auch im IRB Advanced Approach gilt. In diesem Falle bestünde kein Anreiz, den Advanced Approach anzustreben. Die vorgeschlagene Formulierung schreibt das intendierte Gefälle zugunsten des Advanced Approach fest. Eine alternative Formulierung (Einschub " ... können - unbeschadet der Behandlung von jederzeit kündbaren oder automatisch gekündigten Kredtilinien nach Ziffer a) - mit Genehmigung ....") hingegen könnte als Wahlrecht des Instituts interpretiert werden. Damit würde die Attraktivität des Advanced Approach für dieses bedeutende Teilportfolio in das Ermessen des Kreditinstituts selbst gegeben, was wohl auch nicht gewollt sein kann.


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10. To qualify for recognition by the competent authorities of the use for capital requirement calculation of own estimates of conversion factors a rating system shall incorporate a distinct facility rating scale which exclusively reflects conversion factor related transaction characteristics.

deleted

Or. en

Justification

Credit institutions use their internal rating systems to associate a PD with each obligorgrade, and an LGD with each credit facility. For those two risk parameters (PD and LGD), a rating system has to be put in place. This rating system must comply with certain requirements as set out in part 4 of Annex VII. In addition to those two risk parameters, credit institutions calculate a conversion factor (“exposure value”) per product type. That conversion factor is a calculation applied to the undrawn part of a credit facility. Thus for conversion factors, a quantification process suffices and there is no rating assessment process which is needed (as for LGD and PD). Therefore, it would be wrong to include all assignment and validation requirements that have to be used for PD and LGD to the conversion factor. This would also be in conformity with US standards (as mentioned by the FED).




deleted

Or. en

Justification

Under the proposal, rating system should also apply to “conversion factors”, whereas in


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practice it can only apply to two risk parameters (PD and LGD). For those two risk parameters (PD and LGD), a rating system does have to be put in place, but conversion factors are a calculation (a number) applied to the credit facility. Thus for conversion factors, there is no rating assessment process needed. It would therefore, be impossible to apply the rating requirements that have to be used for PD and LGD to the conversion factor. This would also be in conformity with proposed US standards.




deleted

Or. en

Justification

Under the proposal, rating system requirements as set out in part 4 of annex VII should also apply to “conversion factors”, whereas in practice it can only apply to two risk parameters (PD and LGD). For those two risk parameters (PD and LGD), a rating system has indeed to be put in place, but conversion factors are a calculation (a number) applied to the credit facility. Thus for conversion factors, there is no rating assessment process which is needed. It would therefore be impossible to comply with the rating requirements that have to be used for PD and LGD to the conversion factor. This would also be in conformity with US standards (as mentioned by the FED).



11. A ‘facility grade’ shall mean a risk category within a rating system’s facility scale, to which exposures are assigned on the basis of a specified and distinct set of rating criteria from which own estimates of either LGDs and conversion factors are derived. The grade definition shall include both a description of how exposures are

11. A ‘facility grade’ shall mean a risk category within a rating system’s facility scale, to which exposures are assigned on the basis of a specified and distinct set of rating criteria from which own estimates of LGDs are derrived. The grade definition shall include both a description of how exposures are assigned to the grade and of


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assigned to the grade and of the criteria used to distinguish the level of risk across grades.

the criteria used to distinguish the level of risk across grades.

Or. en

Justification




11. A ‘facility grade’ shall mean a risk category within a rating system’s facility scale, to which exposures are assigned on the basis of a specified and distinct set of rating criteria from which own estimates of either LGDs or conversion factors are derived. The grade definition shall include both a description of how exposures are assigned to the grade and of the criteria used to distinguish the level of risk across grades.

11. A ‘facility grade’ shall mean a risk category within a rating system’s facility scale, to which exposures are assigned on the basis of a specified and distinct set of rating criteria from which own estimates of LGDs are derived. The grade definition shall include both a description of how exposures are assigned to the grade and of the criteria used to distinguish the level of risk across grades.

Or. en

Justification

Under the proposal, rating system should also apply to “conversion factors”, whereas in practice it can only apply to two risk parameters (PD and LGD). For those two risk parameters (PD and LGD), a rating system does have to be put in place, but conversion factors are a calculation (a number) applied to the credit facility. Thus for conversion factors, there is no rating assessment process needed. It would therefore, be impossible to apply the rating requirements that have to be used for PD and LGD to the conversion factor. This would also be in conformity with proposed US standards.


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11. A ‘facility grade’ shall mean a risk category within a rating system’s facility scale, to which exposures are assigned on the basis of a specified and distinct set of rating criteria from which own estimates of either LGDs or conversion factors are derived. The grade definition shall include both a description of how exposures are assigned to the grade and of the criteria used to distinguish the level of risk across grades.

11. A ‘facility grade’ shall mean a risk category within a rating system’s facility scale, to which exposures are assigned on the basis of a specified and distinct set of rating criteria from which own estimates of LGDs are derived. The grade definition shall include both a description of how exposures are assigned to the grade and of the criteria used to distinguish the level of risk across grades.

Or. en

Justification

Credit institutions use their internal rating systems to associate a PD with each obligor grade, and an LGD with each credit facility. For those two risk parameters (PD and LGD), a rating system has to be put in place. This rating system must comply with certain requirements as set out in part 4 of Annex VII. In addition to those two risk parameters, credit institutions calculate a conversion factor (“exposure value”) per product type. That conversion factor is a calculation applied to the undrawn part of a credit facility. Thus for conversion factors, a quantification process suffices and there is no rating assessment process which is needed (as for LGD and PD). Therefore, it would be wrong to include all assignment and validation requirements that have to be used for PD and LGD to the conversion factor. This would also be in conformity with US standards (as mentioned by the FED).



12. Significant concentrations within a single facility grade shall be supported by convincing empirical evidence that the facility grade covers a reasonably narrow LGD or conversion factor band, respectively, and that the risk posed by all exposures in the grade falls within that band.

12. Significant concentrations within a single facility grade shall be supported by convincing empirical evidence that the facility grade covers a reasonably narrow LGD band, and that the risk posed by all exposures in the grade falls within that band.

Or. en


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Justification

Under the proposal, rating system should also apply to “conversion factors”, whereas in practice it can only apply to two risk parameters (PD and LGD). For those two risk parameters (PD and LGD), a rating system does have to be put in place, but conversion factors are a calculation (a number) applied to the credit facility. Thus for conversion factors, there is no rating assessment process needed. It would therefore, be impossible to apply the rating requirements that have to be used for PD and LGD to the conversion factor. This would also be in conformity with proposed US standards.



12. Significant concentrations within a single facility grade shall be supported by convincing empirical evidence that the facility grade covers a reasonably narrow LGD or conversion factor band, and that the risk posed by all exposures in the grade falls within that band.

12. Significant concentrations within a single facility grade shall be supported by convincing empirical evidence that the facility grade covers a reasonably narrow LGD band, and that the risk posed by all exposures in the grade falls within that band.

Or. en

Justification




12. Significant concentrations within a single facility grade shall be supported by convincing empirical evidence that the facility grade covers a reasonably narrow LGD or conversion factor band,

12. Significant concentrations within a single facility grade shall be supported by convincing empirical evidence that the facility grade covers a reasonably narrow LGD band, and that the risk posed by all


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respectively, and that the risk posed by all exposures in the grade falls within that band.

exposures in the grade falls within that band.

Or. en

Justification

Credit institutions use their internal rating systems to associate a PD with each obligor grade, and an LGD with each credit facility. For those two risk parameters (PD and LGD), a rating system has to be put in place. This rating system must comply with certain requirements as set out in part 4 of Annex VII. In addition to those two risk parameters, credit institutions calculate a conversion factor (“exposure value”) per product type. That conversion factor is a calculation applied to the undrawn part of a credit facility. Thus for conversion factors, a quantification process suffices and there is no rating assessment process which is needed (as for LGD and PD). Therefore, it would be wrong to include all assignment and validation requirements that have to be used for PD and LGD to the conversion factor. This would also be in conformity with US standards (as mentioned by the FED).


Amendment 653Annex VII, part 4, paragraph 24, point (b a) (new)

(ba) where consumer protection and bank secrecy legislation or Chinese wall considerations prohibit the exchange of client data;

Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy, data protection legislation and Chinese Walls) are imposed hindering free flow of intra-group information across borders. In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions.

Amendment by Robert Goebbels


(ba) where consumer protection and bank secrecy legislation or Chinese wall considerations prohibit the exchange of


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client data

Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy or data protection legislation) are imposed hindering free flow of intragroup information In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions: - E.g. private clients’ ratings may not be exchanged between Switzerland, Luxembourg and

the rest of the world because of the bank secrecy; - For some non-banking subsidiaries statutory or other limitations prevent the exchange of

rating information; these normally do not fall under cross default provisions;- There may be Chinese wall considerations that prevent a free flow of rating information

between different parts of a banking group. e.g. asset management may not exchange information with the rest of the bank.

Given the high degree of independence of some non-banking subsidiaries, IT platforms are not shared and the rule would be overly burdensome and costly.



(ba) where consumer protection and bank secrecy legislation or Chinese wall considerations prohibit the exchange of client data

Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy or data protection legislation) are imposed hindering free flow of intragroup information In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions:

- E.g. private clients’ ratings may not be exchanged between Switzerland, Luxembourg and the rest of the world because of the bank secrecy;

- For some non-banking subsidiaries statutory or other limitations prevent the exchange of rating information; these normally do not fall under cross default provisions;

- There may be Chinese wall considerations that prevent a free flow of rating information between different parts of a banking group. e.g. asset management may not exchange information with the rest of the bank.

Given the high degree of independence of some non-banking subsidiaries, IT platforms are


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not shared and the rule would be overly burdensome and costly.




Or. en

Justification





- Given the high degree of independence of some non-banking subsidiaries, IT platforms are not shared and the rule would be overly burdensome and costly.




Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy or data protection legislation) are imposed hindering free flow of


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intragroup information In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions:- E.g. private clients’ ratings may not be exchanged between Switzerland, Luxembourg and the rest of the world because of the bank secrecy;- For some non-banking subsidiaries statutory or other limitations prevent the exchange of rating information; these normally do not fall under cross default provisions;- There may be Chinese wall considerations that prevent a free flow of rating information between different parts of a banking group. e.g. asset management may not exchange information with the rest of the bank.- Given the high degree of independence of some non-banking subsidiaries, IT platforms are not shared and the rule would be overly burdensome and costly.


Amendment 658Annex VII, part 4, paragraph 24, point (b b) (new)

(bb) subject to approval of the competent authorities, for non banking subsidiaries.

Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy, data protection legislation and Chinese Walls) are imposed hindering free flow of intra-group information across borders. In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions.

Amendment by Robert Goebbels


(bb) subject to approval of the competent authorities, for non banking subsidiaries

Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy or data protection legislation) are imposed hindering free flow of


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intragroup information In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions: - E.g. private clients’ ratings may not be exchanged between Switzerland, Luxembourg and








Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy or data protection legislation) are imposed hindering free flow of intragroup information In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions:

- E.g. private clients’ ratings may not be exchanged between Switzerland, Luxembourg and the rest of the world because of the bank secrecy;

- For some non-banking subsidiaries statutory or other limitations prevent the exchange of rating information; these normally do not fall under cross default provisions;

- There may be Chinese wall considerations that prevent a free flow of rating information between different parts of a banking group. e.g. asset management may not exchange information with the rest of the bank.






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Or. enJustification





- Given the high degree of independence of some non-banking subsidiaries, IT platforms are not shared and the rule would be overly burdensome and costly.




Or. en

Justification

Exemptions should also be granted for non-banking subsidiaries or for subsidiaries on which legal barriers (bank secrecy or data protection legislation) are imposed hindering free flow of intragroup information In some cases, banks cannot comply with this “one obligor, one rating” principle in view of legal repercussions:- E.g. private clients’ ratings may not be exchanged between Switzerland, Luxembourg and the rest of the world because of the bank secrecy;- For some non-banking subsidiaries statutory or other limitations prevent the exchange of rating information; these normally do not fall under cross default provisions;- There may be Chinese wall considerations that prevent a free flow of rating information between different parts of a banking group. e.g. asset management may not exchange information with the rest of the bank.- Given the high degree of independence of some non-banking subsidiaries, IT platforms are not shared and the rule would be overly burdensome and costly.




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41. A credit institution shall have in place sound stress testing processes for use in the assessment of its capital adequacy. Stress testing shall involve identifying possible events or future changes in economic conditions that could have unfavourable effects on a credit institution’s credit exposures and assessment of the credit institution’s ability to withstand such changes.

deleted

Or. en

Justification

Credit institutions are already required to adopt conservative views and stress internal estimations of PD, LGD and exposure at default, including taking into account an economic downturn (Annex VII, part 4, paragraphs 19, 49, 54, 63, 74, 87 & 114). The Commission proposal will make all types of obligor and exposure more capital intensive and therefore more expensive and will particularly affect SMEs and small banks.



42. A credit institution shall regularly perform a credit risk stress test to assess the effect of certain specific conditions on its total capital requirements for credit risk. The test to be employed shall be one chosen by the credit institution, subject to supervisory review. The test to be employed shall be meaningful and reasonably conservative, considering at least the effect of mild recession scenarios. A credit institution shall assess migration in its ratings under the stress test scenarios. Stressed portfolios shall contain the vast majority of a credit institution's total exposure.

deleted

Or. en


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Justification

Credit institutions are already required to adopt conservative views and stress internal estimations of PD, LGD and exposure at default, including taking into account an economic downturn (Annex VII, part 4, paragraphs 19, 49, 54, 63, 74, 87 & 114). The Commission proposal will make all types of obligor and exposure more capital intensive and therefore more expensive and will particularly affect SMEs and small banks. paragraph 42 relates to Pillar 2 requirements and could be moved to Annex XI paragraph 1(a).


Amendment 665Annex VII, part 4, paragraph 44, point (b), Subparagraphs 4 and 5

Bei Retailforderungen und Forderungen an öffentliche Stellen setzen die zuständigen Behörden die Zahl der Verzugstage gemäß Nummer 48 fest.

entfällt

Bei Unternehmensforderungen können die zuständigen Behörden die Zahl der Verzugstage gemäß Artikel 154 Absatz 4 festsetzen.

Or. de

Justification

Unterschiedliche Ausfallsdefinitionen bedeuten einen zusätzlichen Kostenfaktor für grenzübergreifend tätige Kreditinstitute und können auch zu erheblichen Wettbewerbsverzerrungen führen. Daher erscheint es notwendig, eine einheitliche Definition für das Ereignis "Ausfall" festzulegen.


Amendment 666Annex VII, part 4, paragraph 44, Subparagraph 2

Days past due commence once an obligor has breached an advised limit, has been advised a limit smaller than current

For overdrafts, days past due commence once an obligor has breached an advised limit, has been advised a limit smaller than


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outstandings, or has drawn credit without authorisation.

current outstandings, or has drawn credit without authorisation and the underlying amount is material.

Or. en

Justification

The Commission proposal conflicts with the Basel Framework and the suggested amendment reflects industry practice. There must be a materiality element to the definition of days past due to ensure defaults are not triggered by a small excess, e.g. EUR 1. For credit cards the minimum payment date is embodied in the contractual relationship with the counterparty and therefore the adoption of any other days past due interpretation will conflict with industry practice and potentially impact the terms and conditions for credit cards.


Amendment 667Annex VII, part 4, paragraph 44, Subparagraph 3 a (new)

3a. Days past due for credit cards commence on the minimum payment due date.

Or. en

Justification

The Commission proposal conflicts with the Basel Framework and the suggested amendment reflects industry practice. There must be a materiality element to the definition of days past due to ensure defaults are not triggered by a small excess, e.g. EUR 1. For credit cards the minimum payment date is embodied in the contractual relationship with the counterparty and therefore the adoption of any other days past due interpretation will conflict with industry practice and potentially impact the terms and conditions for credit cards.



48. Bei Retailforderungen und Forderungen gegenüber öffentlichen Stellen setzen die zuständigen Behörden eines jeden Mitgliedstaats die genaue Zahl der

48. Bei Retailforderungen und Forderungen gegenüber öffentlichen Stellen setzen die zuständigen Behörden eines jeden Mitgliedstaats die genaue Zahl der


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Verzugstage fest, an die sich sämtliche Kreditinstitute in ihrem Rechtsgebiet bei der unter Nummer 44 dargelegten Ausfalldefinition für Forderungen an Kontrahenten mit Sitz in diesem Mitgliedstaat zu halten haben. Die Zahl der Verzugstage muss zwischen 90 und 180 liegen und kann für verschiedene Produktlinien unterschiedlich festgesetzt werden. Für Forderungen an Kontrahenten mit Sitz im Hoheitsgebiet anderer Mitgliedstaaten setzen die zuständigen Behörden eine Zahl von Verzugstagen fest, die nicht höher ist als die von den zuständigen Behörden des jeweiligen Sitzstaates festgesetzte Zahl von Verzugstagen.

Verzugstage fest, an die sich sämtliche Kreditinstitute in ihrem Rechtsgebiet bei der unter Nummer 44 dargelegten Ausfalldefinition für Forderungen an Kontrahenten mit Sitz in diesem Mitgliedstaat zu halten haben. Die Zahl der Verzugstage soll generell bei 90 liegen.

Or. de

Justification

Aufstellung einer generellen einheitlichen Anforderung.



48. For Retail and PSE exposures, the competent authorities of each Member States shall set the exact number of days past due that all credit institutions in its jurisdiction shall abide by under the definition of default set out in paragraph 44, for exposures to such counterparts situated within this Member State. The specific number shall fall within 90-180 days and may differ across product lines. For exposures to such counterparts situated in the territories of other Member States, the competent authorities shall set a number of days past due which is not higher than the number set by the competent authority of the respective Member State.

48. For Retail and PSE exposures, the competent authorities of each Member States shall set the exact number of days past due that all credit institutions in its jurisdiction shall abide by under the definition of default set out in paragraph 44, for exposures to such counterparts situated within this Member State. The specific number shall fall within 90-180 days for Retail exposures and within 90-270 days for PSE exposures and may differ across product lines. For exposures to such counterparts situated in the territories of other Member States, the competent authorities shall set a number of days past due which is not higher than the number set by the competent authority of the respective


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Member State.

Or. en

Justification

Those member states whose current practices differ from a limit of 90 days should be allowed to extend the number of days past due up to 180 days for corporate and retail exposures and up to 270 days for PSE exposures. A national discretion providing for this possibility should therefore be maintained throughout the Standardised and the IRB Approaches.



49. A credit institution’s own estimates of the risk parameters PD, LGD, conversion factor and EL shall incorporate all relevant data, information and methods. The estimates shall be derived using both historical experience and empirical evidence, and not based purely on judgemental considerations. The estimates shall be plausible and intuitive and shall be based on the material drivers of the respective risk parameters. The less data a credit institution has, the more conservative it shall be in its estimation.

49. A credit institution’s own estimates of the risk parameters PD, LGD, conversion factor and EL shall incorporate all relevant data, information and methods. The estimates shall be derived using both historical experience and empirical evidence, including statistical models. The estimates shall be plausible and intuitive and shall be based on the material drivers of the respective risk parameters.

Or. en

Justification

The intent is to ensure that a credit institution that has little historical data is not permitted to calculate own estimates of the risk parameters based on such inadequate data. However, the statement on conservatism can be interpreted in such a way as to prevent firms with genuinely high quality business lines, for which extensive default data is unavailable (either internally or across the industry, including Low Default Portfolios) from applying the advanced approach to these exposures.




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78. To the extent, that a credit institution does not meet the minimum requirements for collateral set out in Annex VIII any amount expected to be recovered from such collateral shall not be taken into account in its LGD estimates.

78. To the extent that LGD estimates take into account the existence of collateral, credit institutions must establish internal requirements for collateral management, legal certainty and risk management that are generally consistent with those set out in Annex VIII, part 2.

Or. en

Justification

The Commission’s proposal would severely restrict the use of the Advanced IRB approach and would not be in keeping with the Basel Framework; the suggested changes bring them back in line. The draft proposed by the Commission might imply that if purchased credit risk mitigation does not meet all the requirements throughout Annex VIII, then own-LGD estimates cannot reflect the degree of credit risk mitigation obtained. This is impractical because it will require firms with relatively complex collateralised transactions to distinguish, within the estimated LGD, the cash collected from risk mitigation meeting the requirements and that collected from mitigation that does not meet the requirements. It is also unnecessary because own-LGD estimates must take into consideration any available relevant information, including any instrument that historically can be demonstrated to have an effect on LGD. Moreover, advanced IRB banks started developing their LGD methodologies in the understanding that they could bring in their own internal operational and eligibility requirements for collateral as long as they could base their LGD ratings on historical evidence, i.e. validate them, and as long as those methodologies would be validated by their supervisors. Compared to a previous version of the proposed Directive, the stronger wording of paragraph 78 now suddenly means that what has been developed is not good enough. It would oblige banks to rebuild their models that they have been so far developing to calculate LGD estimates and will not provide any incentives to go for the most advanced approach.




78. To the extent that LGD estimates take into account the existence of collateral, credit institutions must establish internal requirements for collateral management, legal certainty and risk management that are generally consistent with those set out in Annex VIII, part 2.

Or. en


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Justification

The Commission proposal would severely restrict the use of the Advanced IRB approach and would not be in keeping with the Basel Framework. The draft proposed by the Commission might imply that if purchased credit risk mitigation does not meet all the requirements throughout Annex VIII, then own-LGD estimates cannot reflect the degree of credit risk mitigation obtained. This is impractical because it will require firms with relatively complex collateralised transactions to distinguish, within the estimated LGD, the cash collected from risk mitigation meeting the requirements and that collected from mitigation that does not meet the requirements. It is also unnecessary because own-LGD estimates must take into consideration any available relevant information, including any instrument that historically can be demonstrated to have an effect on LGD.

Moreover, advanced IRB banks started developing their LGD methodologies in the understanding that they could bring in their own internal operational and eligibility requirements for collateral as long as they could base their LGD ratings on historical evidence, i.e. validate them, and as long as those methodologies would be validated by their supervisors. Compared to a previous version of the proposed Directive, the stronger wording of paragraph 78 now suddenly means that what has been developed is not good enough. It would oblige banks to rebuild their models that they have been so far developing to calculate LGD estimates and will not provide any incentives to go for the most advanced approach.




78. To the extent that LGD estimates take account the existence of collateral, credit institutions must establish internal requirements for collateral management, legal certainty and risk management that are generally consistent with those set out in Annex VIII, part 2.

Or. en

Justification

The Commission proposal would severely restrict the use of the Advanced IRB approach and would be super-equivalent to the Basel Framework. The Commission draft implies that if purchased credit risk mitigation does not meet all the Annex VIII requirements, then own-LGD estimates cannot reflect the degree of credit risk mitigation obtained. This is unnecessary as own-LGD estimates must take into consideration any available relevant information.


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81. Die den LGD-Schätzungen zugrunde gelegten Daten aus zumindest einer Datenquelle beziehen sich auf einen Beobachtungszeitraum von mindestens sieben Jahren. Umfasst der verfügbare Beobachtungszeitraum eine längere Zeitspanne als sieben Jahre und sind die entsprechenden Daten maßgeblich, so wird dieser längere Beobachtungszeitraum herangezogen.

81. Die den LGD-Schätzungen zugrunde gelegten Daten aus zumindest einer Datenquelle beziehen sich auf einen Beobachtungszeitraum von mindestens vier Jahren. Umfasst der verfügbare Beobachtungszeitraum eine längere Zeitspanne als sieben Jahre und sind die entsprechenden Daten maßgeblich, so wird dieser längere Beobachtungszeitraum herangezogen.

Or. de

Justification

Ziel ist es, ein zu großes Auseinanderlaufen der Anforderungen von Basis-Ansatz und fortgeschrittenem IRB-Ansatz zu vermeiden.



92. Die den Schätzungen der Umrechnungsfaktoren zugrunde gelegten Daten aus zumindest einer Datenquelle beziehen sich auf einen Beobachtungszeitraum von mindestens sieben Jahren. Umfasst der verfügbare Beobachtungszeitraum eine längere Zeitspanne als sieben Jahre und sind die entsprechenden Daten maßgeblich, so wird dieser längere Beobachtungszeitraum herangezogen.

92. Die den Schätzungen der Umrechnungsfaktoren zugrunde gelegten Daten aus zumindest einer Datenquelle beziehen sich auf einen Beobachtungszeitraum von mindestens vier Jahren. Umfasst der verfügbare Beobachtungszeitraum eine längere Zeitspanne als sieben Jahre und sind die entsprechenden Daten maßgeblich, so wird dieser längere Beobachtungszeitraum herangezogen.

Or. de

Justification

Ziel ist es, ein zu großes Auseinanderlaufen der Anforderungen von Basis-Ansatz und fortgeschrittenem IRB-Ansatz zu vermeiden.


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97. Credit institutions shall have clearly specified criteria for the types of guarantors they recognise for the calculation of risk weighted exposures.

97. Credit institutions shall have clearly specified criteria for the types of guarantors they recognise for the calculation of risk weighted exposure amounts.

Or. en

Justification




100. A credit institution shall have clearly specified criteria for adjusting grades, pools or LGD estimates, and in the case of retail and eligible purchased receivables, the process of allocating exposures to grades or pools, to reflect the impact of guarantees for the calculation of risk weighted assets. These criteria shall comply with the minimum requirements set out in paragraphs 18 to 30.

100. A credit institution shall have clearly specified criteria for adjusting grades, pools or LGD estimates, and in the case of retail and eligible purchased receivables, the process of allocating exposures to grades or pools, to reflect the impact of guarantees for the calculation of risk weighted exposure amounts. These criteria shall comply with the minimum requirements set out in paragraphs 18 to 30.

Or. en

Justification



Amendment 678Annex VIII, part 1, paragraph 7, subparagraph 1, point (c a) (new)


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(ca) The competent authorities may recognise as eligible collateral physical items of a type other than those types indicated above if satisfied as to the following:

(i) the existence of liquid markets for disposal of the collateral in an expeditious and economically efficient manner;

(ii) the existence of well-established, publicly available market prices for the collateral. The institution must be able to demonstrate that there is no evidence that the net prices it receives when collateral is realised deviates significantly from these market prices.

Or. en

Justification

The category “other collateral” includes liens on ships and aircraft. The market values of these collateral assets are readily determined, producing effective reduction of risk. But their credit risk mitigation effect is recognised only in the IRB approach. Our hope is that these types of collateral, which are quite widely used in the credit market, can go towards reducing capital charges for banks adopting the Standardised approach as well.


Amendment 679Annex VIII, part 1, paragraph 7, subparagraph 2, point (i a) (new)

(ia) debt securities issued by public sector entities which are treated as exposures to central governments in accordance with paragraph 15a of part 1 of Annex VI.

Or. en

Justification



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Amendment 680Annex VIII, part 1, paragraph 7, subparagraph 2, point (i)

(i) debt securities issued by regional governments or local authorities exposures to which are treated as exposures to the central government in whose jurisdiction they are established under Annex VI;

(i) debt securities issued by regional governments or local authorities exposures to which are treated as exposures to the central government in whose jurisdiction they are established under Articles 78 to 83;

Or. en

Justification



Amendment 681Annex VIII, part 1, paragraph 7, subparagraph 3, point (iii)

(iii) debt securities issued by multilateral development banks other than those to which a 0% risk weight is applied under;

(iii) debt securities issued by multilateral development banks other than those to which a 0% risk weight is applied under Articles 78 to 83;

Or. en

Justification


Amendment by Andreas Schwab

Amendment 682Annex VIII, part 1, paragraph 10 a (new)

Immobiliensicherheiten

10a. Wohnimmobilien, die vom Eigentümer selbst genutzt oder vermietet werden bzw. werden sollen, sowie gewerbliche Immobilien, d.h. Büro- und andere Geschäftsräume, können als Sicherheit


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anerkannt werden, wenn

a) der Wert der Immobilie nicht wesentlich von der Bonität des Schuldners abhängt. Fälle, in denen rein makroökonomische Faktoren sowohl den Wert der Immobilie als auch die Fähigkeit des Kreditnehmers zur Vertragserfüllung beeinträchtigen, sollen durch diese Bestimmung nicht ausgeschlossen werden;

b) das Risiko des Kreditnehmers nicht wesentlich von der Wertentwicklung der Immobilie/des Vorhabens, sondern eher von seiner Fähigkeit, seine Schulden aus anderen Quellen zurückzuzahlen, abhängt. Ob mit der als Sicherheit gestellten Immobilie Cash-Flow erwirtschaftet wird, ist damit für die Rückzahlung nicht wesentlich.

Or. de

Justification

Der Kreis der anerkennungsfähigen Sicherheiten im Standardansatz sollte auch auf Immobiliarsicherheiten, Forderungsabtretungen und sonst. Sachsicherheiten erweitert werden. Nach dem derzeitigen Stand des Richtlinienentwurfs sind diese Sicherheitenarten auf die Nutzung des internen Ratingansatzes beschränkt. In seinem Änderungsantrag Nr. 6 zu Erwägungsgrund 36 schlägt der Berichterstatter folgende Ergänzung vor: "Im Rahmen des Möglichen sind bankübliche Sicherheiten zur Minderung von Kreditrisiken im Standardansatz anzuerkennen." Die Absicht ist zu begrüßen, da sie insbesondere kleineren Kreditinstituten, die den Standardsatz anwenden, die Anerkennung banküblicher Sicherheiten ermöglicht. Allerdings schafft die Erwähnung dieser Absicht in einem Erwägungsgrund noch nicht die konkrete Möglichkeit zur Nutzung dieser Sicherheiten. In dem für Fragen der Anerkennung von Sicherheiten maßgeblichen Anhang VIII sollte deshalb die Erweiterung klargestellt werden.


Amendment 683Annex VIII, part 1, paragraph 10 b (new)

10b. Anteile an finnischen Wohnungsbaugesellschaften im Sinne des finnischen Gesetzes von 1991 über Wohnungsbaugesellschaften oder nachfolgender entsprechender Gesetze


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über Wohnimmobilien, die vom Eigentümer selbst genutzt oder vermietet werden bzw. werden sollen, können von Kreditinstituten unter den genannten Voraussetzungen als Wohnimmobiliensicherheit anerkannt werden.

Or. de

Justification

See justification to Amendment to Annex VIII, part 1, paragraph 10 a (new).


Amendment 684Annex VIII, part 1, paragraph 10 c (new)

10c. Die zuständigen Behörden können ihren Kreditinstituten ferner gestatten, Anteile an finnischen Baugesellschaften im Sinne des finnischen Gesetzes von 1991 über Wohnungsbaugesellschaften oder nachfolgender entsprechender Gesetze unter den genannten Voraussetzungen als gewerbliche Immobiliensicherheit anzuerkennen.

Or. de

Justification



Amendment 685Annex VIII, part 1, paragraph 10 d (new)

10 d. Die zuständigen Behörden können ihre Kreditinstitute in Bezug auf Forderungen, die durch in ihrem Staatsgebiet liegende Wohnimmobilien besichert sind, von der unter Nummer 13


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Buchstabe b) genannten Bedingung freistellen, wenn der betreffende Markt nachweislich gut entwickelt und seit langem etabliert ist und die Verlustraten niedrig genug sind, um dies zu rechtfertigen. Dies hindert die zuständigen Behörden eines Mitgliedstaates, die diese Freistellungsmöglichkeit nicht in Anspruch nehmen, nicht daran, in einem anderen Mitgliedstaat aufgrund einer solchen Freistellung als Sicherheit anerkannte Wohnimmobilien ebenfalls als Sicherheit anzuerkennen. Die Mitgliedstaaten zeigen öffentlich an, inwieweit sie von dieser Möglichkeit Gebrauch machen.

Or. de

Justification



Amendment 686Annex VIII, part 1, paragraph 10 e (new)

10e. Die zuständigen Behörden der Mitgliedstaaten können ihre Institute in Bezug auf in ihrem Staatsgebiet liegende gewerbliche Immobilien von der unter Nummer 13 Buchstabe b) genannten Bedingung freistellen, wenn der betreffende Markt nachweislich gut entwickelt und seit langem etabliert ist und die Verlustraten bei Krediten, die durch gewerbliche Immobilien besichert sind, die folgenden Bedingungen erfüllen:

a) die Verluste, die auf 50 % des Marktwerts (oder gegebenenfalls 60 % des Beleihungswerts, sollte dieser niedriger sein) entfallen, gehen in keinem Jahr über 0,3 % der ausstehenden, durch gewerbliche Immobilien besicherten Kredite hinaus;

b) die Gesamtverluste bei Krediten, die durch gewerbliche Immobilien besichert


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sind, gehen in keinem Jahr über 0,5 % der ausstehenden Kredite hinaus.

Or. de

Justification



Amendment 687Annex VIII, part 1, paragraph 10 f (new)

10f. Wird eine dieser Bedingungen in einem Jahr nicht erfüllt, so ist diese Behandlung so lange auszusetzen, bis die Bedingungen in einem der Folgejahre wieder erfüllt sind.

Or. de

Justification



Amendment 688Annex VIII, part 1, paragraph 10 g (new)

10g. Die zuständigen Behörden eines Mitgliedstaates, die die unter Nummer 15 genannte Freistellungsmöglichkeit nicht in Anspruch nehmen, können gewerbliche Immobilien, die in einem anderen Mitgliedstaat aufgrund einer solchen Freistellung als Sicherheit anerkannt sind, ebenfalls als Sicherheit anerkennen.

Or. de


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Justification



Amendment 689Annex VIII, part 1, paragraph 10 h (new)

Forderungen

10h. Die zuständigen Behörden können Forderungen, die mit einer kommerziellen Transaktion oder mit Transaktionen mit einer ursprünglichen Laufzeit von weniger als einem Jahr oder einem Jahr zusammenhängen, als Sicherheit anerkennen. Nicht anerkennungsfähig sind Forderungen, die mit Verbriefungen, Unterbeteiligungen oder Kreditderivaten zusammenhängen, oder Beträge, die von verbundenen Unternehmen geschuldet werden.

Or. de

Justification



Amendment 690Annex VIII, part 1, paragraph 10 i (new)

Sonstige Sachsicherheiten

10i. Die zuständigen Behörden können neben den unter den Nummern 11 bis 17 genannten Sachsicherheiten Gegenstände als Sicherheit anerkennen, wenn sie sich davon überzeugt haben, dass

a) für eine rasche und wirtschaftliche Verwertung der Sicherheit liquide Märkte existieren und

b) allgemein anerkannte Marktpreise für


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die Sicherheit existieren und diese öffentlich zugänglich sind. Das Institut muss nachweisen können, dass nichts darauf hindeutet, dass die bei der Verwertung der Sicherheit erzielten Nettopreise wesentlich von diesen Marktpreisen abweichen werden.

Or. de

Justification



Amendment 691Annex VIII, part 1, paragraph 10 j (new)

Leasing

10j. Forderungen aus Leasinggeschäften, bei denen ein Kreditinstitut der Leasinggeber und ein Dritter der Leasingnehmer ist, werden – sofern die in Teil 2 Nummer 11 genannten Voraussetzungen erfüllt sind – vorbehaltlich der Bestimmungen der Nummer 73 des Teils 3 wie Kredite behandelt, die als Sicherheit die gleiche Art von Gegenstand haben wie das Leasingobjekt.

Or. de

Justification



Amendment 692Annex VIII, part 1, paragraph 13, introductory part


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13. Residential real estate property which is or will be occupied or let by the owner and commercial real estate i.e. offices and other commercial premises may be recognised as eligible collateral where the following conditions are met:

13. Residential real estate property which is or will be occupied or let by the owner or the beneficial owner in the case of personal investment companies and commercial real estate i.e. offices and other commercial premises may be recognised as eligible collateral where the following conditions are met:

Or. en

Justification





13. Residential real estate property which is or will be occupied or let by the owner or the beneficial owner in case of personal investment companies and commercial real estate i.e. offices and other commercial premises may be recognised as eligible collateral where the following conditions are met:

Or. en

Justification





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13. Residential real estate property which is or will be occupied or let by the owner or the beneficial owner in the case of personal investment companies and commercial real estate i.e. offices and other commercial premises may be recognised as eligible collateral where the following conditions are met:

Or. en

Justification


Amendment 695Annex VIII, part 1, paragraph 13,introductory part

13. Wohnimmobilien, die vom Eigentümer selbst genutzt oder vermietet werden bzw. werden sollen, sowie gewerbliche Immobilien, d.h. Büro- und andere Geschäftsräume, können als Sicherheit anerkannt werden, wenn

13. Wohnimmobilien, die vom Eigentümer bzw. im Falle einer Zweckgesellschaft vom begünstigten Eigentümer selbst genutzt oder vermietet werden bzw. werden sollen, sowie gewerbliche Immobilien, d.h. Büro- und andere Geschäftsräume, können als Sicherheit anerkannt werden, wenn

Or. de

Justification

Personen mit hohem Eigenkapital kaufen Eigentum häufig über Zweckgesellschaften, die aber keine wirklichen Unternehmen sind. Vor allem der private Immobilienkredit stellt unter anderem auch auf den Immobilien Cash-Flow als Tilgungsquelle ab. Dies muss auch weiterhin nach dem IRB-Ansatz möglich sein.


Amendment 696Annex VIII, part 1, paragraph 13, point (a)

(a) The value of the property does not materially depend upon the credit quality of the obligor. This requirement is not intended

(a) The value of the property does not materially depend upon the credit quality of the obligor. This requirement does not


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to preclude situations where purely macro-economic factors affect both the value of the property and the performance of the borrower.

preclude situations where purely macro-economic factors affect both the value of the property and the performance of the borrower.

Or. en

Justification



Amendment 697Annex VIII, part 1, paragraph 13, point (b)

b) das Risiko des Kreditnehmers nicht wesentlich von der Wertentwicklung der Immobilie/des Vorhabens, sondern eher von seiner Fähigkeit, seine Schulden aus anderen Quellen zurückzuzahlen, abhängt. Ob mit der als Sicherheit gestellten Immobilie Cash-Flow erwirtschaftet wird, ist damit für die Rückzahlung nicht wesentlich.

(b) das Risiko des Kreditnehmers nicht wesentlich von der Wertentwicklung der Immobilie/des Vorhabens, sondern eher von seiner Fähigkeit, seine Schulden neben dem Immobilien-Cash-Flow auch aus anderen Quellen zurückzuzahlen, abhängt.

Or. de

Justification

Personen mit hohem Eigenkapital kaufen Eigentum häufig über Zweckgesellschaften, die aber keine wirklichen Unternehmen sind. Vor allem der private Immobilienkredit stellt unter anderem auch auf den Immobilien Cash-Flow als Tilgungsquelle ab. Dies muss auch weiterhin nach dem IRB-Ansatz möglich sein.


Amendment 698Annex VIII, part 1, paragraph 17

17. The competent authorities of the Member States may waive the requirement for their institutions to comply with condition (b) in paragraph 13 for

17. The competent authorities of the Member States may waive the requirement for their credit institutions to comply with condition (b) in paragraph 13 for


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commercial real estate property situated within the territory of that Member State, if the competent authorities have evidence that the relevant market is well-developed and long-established and that loss-rates stemming from lending secured by commercial real estate propery satisfy the following conditions:

commercial real estate property situated within the territory of that Member State, if the competent authorities have evidence that the relevant market is well-developed and long-established and that loss-rates stemming from lending secured by commercial real estate property satisfy the following conditions:

(a) up to 50 % of the market value (or where applicable and if lower 60 % of the mortgage-lending-value) does not exceed 0.3 % of the outstanding loans secured by commercial real estate property in any given year;

(a) losses stemming from lending collateralised by commercial real estate property up to 50 % of the market value (or where applicable and if lower 60 % of the mortgage-lending-value) do not exceed 0.3 % of the outstanding loans collateralised by commercial real estate property in any given year;

(b) overall losses stemming from lending secured by commercial real estate does not exceed 0.5 % of the outstanding loans in any given year.

(b) overall losses stemming from lending collateralised by commercial real estate property do not exceed 0.5 % of the outstanding loans collateralised by commercial real estate property in any given year.

Or. en

Justification




(b) the existence of well-established, publicly available market prices for the collateral. The institution must be able to demonstrate that there is no evidence that the net prices it receives when collateral is realised deviates significantly from these market prices.

(b) the existence of publicly available market prices for the collateral. The institution must be able to demonstrate that there is no evidence that the net prices it receives when collateral is realised deviates significantly from these market prices.

Or. en


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Justification

Theses requirements for physical collateral are in some cases not possible to comply with. Examples of physical collateral where there is not necessary a liquid market or a well-established public market price include jewellery/diamonds, vehicles, aircraft and other tangible assets. For banks being allowed to use their own LGD estimates and once a bank has demonstrated to the satisfaction of its supervisor that a collateral type historically lowered losses in case of default then such a collateral type should qualify as eligible.


Amendment 700Annex VIII, part 1, paragraph 21, points (a) and (b)

(a) the existence of liquid markets for disposal of the collateral in an expeditious and economically efficient manner; and

(i) the existence of liquid markets for disposal of the collateral in an expeditious and economically efficient manner; and

(b) the existence of well-established, publicly available market prices for the collateral. The institution must be able to demonstrate that there is no evidence that the net prices it receives when collateral is realised deviates significantly from these market prices.

(ii) the existence of well-established, publicly available market prices for the collateral. The credit institution must be able to demonstrate that there is no evidence that the net prices it receives when collateral is realised deviates significantly from these market prices.

Or. en

Justification



Amendment 701Annex VIII, part 1, Heading (new) (after paragraph 25)

1.4.4 Commodity warrants and commodities

Or. en


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Justification

It is appropriate to include commodity warrants and commodities in the list of eligible collateral. See also comments re. Annex VIII, part 2, No. 1.8.3 (new) below.



25a. Commodity warrants and commodities may be recognised as eligible credit protection.

Or. en

Justification

It is appropriate to include commodity warrants and commodities in the list of eligible collateral. See also comments re. Annex VIII, part 2, No. 1.8.3 (new) below.



26. The following parties may be recognised as eligible providers of unfunded protection:

26. The following parties may be recognised as eligible providers of unfunded credit protection:

Or. en

Justification



Amendment 704Annex VIII, part 1, paragraph 26, point (e)

(e) public sector entities, claims on which (e) public sector entities, claims on which


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are treated by the competent authorities as claims on institutions under Articles 78 to 83;

are treated by the competent authorities as claims on institutions or central governments under Articles 78 to 83;

Or. en

Justification



Amendment 705Annex VIII, part 1, paragraph 26, point (g a) (new)

(ga) Parent, subsidiary and affiliate corporate entities according to article 41 of the Directive [83/349/EG] for undertakings set out in article 3, lit. (t) of the Directive [93/6/EG].

Or. en

Justification

It is appropriate to recognise the guarantees and warranties from parent undertakings and its subsidiaries that are common in the energy market as eligible collateral to mitigate the capital requirements for the counterparty risk.



(ga) natural persons

Or. en

Justification

As long as private individuals have a rating that has been assigned via a validated model, private individuals should be recognised as eligible providers of unfunded protection.


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(ga) natural persons

Or. en

Justification

As long as private individuals have a rating that has been assigned via a validated model, private individuals should be recognised as eligible providers of unfunded protection.



a) Rechtssicherheit

Die Hypothek oder das Sicherungspfandrecht müssen in allen relevanten Rechtsordnungen rechtlich durchsetzbar sein und ordnungsgemäß und rechtzeitig registriert werden. Das in den Vereinbarungen festgelegte Pfandrecht muss wirksam sein (d.h. alle rechtlichen Anforderungen zum Nachweis des Pfands müssen erfüllt sein). Die Sicherheitenvereinbarung und das ihr zugrunde liegende rechtliche Verfahren müssen das Kreditinstitut in die Lage versetzen, die Sicherheit innerhalb eines angemessenen Zeitraums zu verwerten.

a) Rechtssicherheit

Die Hypothek oder das Sicherungspfandrecht müssen in allen zum Zeitpunkt des Kreditvertragsschlusses relevanten Rechtsordnungen rechtlich durchsetzbar sein und ordnungsgemäß und rechtzeitig registriert werden. Das in den Vereinbarungen festgelegte Pfandrecht muss wirksam sein (d.h. alle rechtlichen Anforderungen zum Nachweis des Pfands müssen erfüllt sein). Die Sicherheitenvereinbarung und das ihr zugrunde liegende rechtliche Verfahren müssen das Kreditinstitut in die Lage versetzen, die Sicherheit innerhalb eines angemessenen Zeitraums zu verwerten.

Or. de

Justification

Die Regelung Buchstabe a) bedarf der Klarstellung, damit Kreditinstitute nicht bereits bei Vertragsschluss alle 25 Rechtssysteme prüfen müssen. Vielmehr müssen sie nur die Rechtssysteme prüfen, die in der jeweiligen Prüfungssituation relevant sind.


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a) Rechtssicherheit

Die Hypothek oder das Sicherungspfandrecht müssen in allen relevanten Rechtsordnungen rechtlich durchsetzbar sein und ordnungsgemäß und rechtzeitig registriert werden. Das in den Vereinbarungen festgelegte Pfandrecht muss wirksam sein (d.h. alle rechtlichen Anforderungen zum Nachweis des Pfands müssen erfüllt sein). Die Sicherheitenvereinbarung und das ihr zugrunde liegende rechtliche Verfahren müssen das Kreditinstitut in die Lage versetzen, die Sicherheit innerhalb eines angemessenen Zeitraums zu verwerten.

a) Rechtssicherheit

Die Hypothek oder das Sicherungspfandrecht müssen in allen zum Zeitpunkt des Kreditvertragsschlusses relevanten Rechtsordnungen rechtlich durchsetzbar sein und ordnungsgemäß und rechtzeitig registriert werden. Das in den Vereinbarungen festgelegte Pfandrecht muss wirksam sein (d.h. alle rechtlichen Anforderungen zum Nachweis des Pfands müssen erfüllt sein). Die Sicherheitenvereinbarung und das ihr zugrunde liegende rechtliche Verfahren müssen das Kreditinstitut in die Lage versetzen, die Sicherheit innerhalb eines angemessenen Zeitraums zu verwerten.

Or. en

Justification



Amendment 710Annex VIII, part 2, paragraph 8, point (b), subparagraph 1

(b) The value of the property shall be monitored on a frequent basis and at a minimum once every year. More frequent monitoring shall be carried out where the market is subject to significant changes in conditions. Statistical methods may be used to monitor the value of the property and to identify property that needs revaluation. The property shall be valued by an independent valuer when information indicates that the value of the property may have declined

(b) The value of the property shall be monitored on a frequent basis and at a minimum once every year for commercial real estate and once every five years for residential real estate. More frequent monitoring shall be carried out where the market is subject to significant changes in conditions. Statistical methods or index based adjustments of original valuations may be used to monitor the value of the property and to identify property that needs


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materially relative to general market prices. For loans exceeding EUR 3 million or 5% of the own funds of the credit institution, the property shall be evaluated by an independent valuer at least every three years

revaluation. The property valuation shall be reviewed by an independent valuer when information indicates that the value of the property may have declined materially relative to general market prices.

Or. en

Justification

The Commission proposal is significantly super-equivalent to the Basel Framework and will put European banks at a serious competitive disadvantage. The thresholds imposed on loan value are far below any realistic measure of materiality for many banks. It will result in material and unjustified implementation costs that will be passed on to consumers. It will particularly impact loans to SMEs secured by real estate and increase the burden and costs for small banks.



Der Wert der Immobilie muss häufig, mindestens jedoch einmal jährlich überprüft werden. Sind die Märkte starken Schwankungen ausgesetzt, so muss diese Überprüfung häufiger stattfinden. Zur Überprüfung des Werts einer Immobilie und zur Ermittlung von Immobilien, die einer Neubewertung bedürfen, können statistische Verfahren verwendet werden. Gibt es Hinweise darauf, dass die Immobilie im Verhältnis zu den allgemeinen Marktpreisen erheblich an Wert verloren haben könnte, so ist die Bewertung von einem unabhängigen Sachverständigen vorzunehmen. Bei Krediten, die über 3 Mio. EUR oder 5 % der Eigenmittel des Kreditinstituts hinausgehen, muss die Immobilie mindestens alle drei Jahre von einem unabhängigen Sachverständigen bewertet werden.

Der Wert der Immobilie muss häufig, mindestens jedoch einmal jährlich bei gewerblich genutzten Immobilien und alle fünf Jahre bei Wohnimmobilien überprüft werden. Sind die Märkte starken Schwankungen ausgesetzt, so muss diese Überprüfung häufiger stattfinden. Zur Überprüfung des Werts einer Immobilie und zur Ermittlung von Immobilien, die einer Neubewertung bedürfen, können statistische Verfahren verwendet werden. Gibt es Hinweise darauf, dass die Immobilie im Verhältnis zu den allgemeinen Marktpreisen erheblich an Wert verloren haben könnte, so ist die Bewertung von einem unabhängigen Sachverständigen zu überprüfen.

Or. de


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Justification

Im Sinne des Grundsatzes der Proportionalität, der Vermeidung überzogener bürokratischer Auflagen und auf Grund der in der Vergangenheit festgestellten Wertbeständigkeit von Wohnimmobilien, ist es gerechtfertigt, den Zeitraum von drei Jahren auf fünf Jahre zu erhöhen. Der Notwendigkeit, Immobilienbewertungen bei Krediten, die über 3 Mio. Euro oder 5 % der Eigenmittel des Kreditinstitutes hinausgehen, mindestens alle drei Jahre von einem unabhängigen Sachverständigen zu überprüfen, ist auch im Basler Papier nicht vorgesehen und sollte daher auch im EU-Eigenkapitalkonzept entfallen.



The value of the property shall be monitored on a frequent basis and at a minimum once every year. More frequent monitoring shall be carried out where the market is subject to significant changes in conditions. Statistical methods may be used to monitor the value of the property and to identify property that needs revaluation. The property shall be valued by an independent valuer when information indicates that the value of the property may have declined materially relative to general market prices. For loans exceeding EUR 3 million or 5% of the own funds of the credit institution, the property shall be evaluated by an independent valuer at least every three years.

The value of the property shall be monitored on a frequent basis and at a minimum once every year for commercial real estate and once every three years for residential real estate. More frequent monitoring shall be carried out where the market is subject to significant changes in conditions. Statistical methods may be used to monitor the value of the property and to identify property that needs revaluation. The property valuation shall be reviewed by an independent valuer when information indicates that the value of the property may have declined materially relative to general market prices. For loans exceeding EUR 3 million or 5% of the own funds of the credit institution, the property valuation shall be reviewed at least every three years

Or. en

Justification

This requirement to have the property evaluated by an independent valuer at least every three years is overly burdensome and goes beyond bank practices. A bank should be allowed to use internal valuers where that facility exists.




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The value of the property shall be monitored on a frequent basis and at a minimum once every year. More frequent monitoring shall be carried out where the market is subject to significant changes in conditions. Statistical methods may be used to monitor the value of the property and to identify property that needs revaluation. The property shall be valued by an independent valuer when information indicates that the value of the property may have declined materially relative to general market prices. For loans exceeding EUR 3 million or 5% of the own funds of the credit institution, the property shall be evaluated by an independent valuer at least every three years.

The value of the property shall be monitored on a frequent basis and at a minimum once every year for commercial real estate and once every three years for residential real estate.. More frequent monitoring shall be carried out where the market is subject to significant changes in conditions. Statistical methods may be used to monitor the value of the property and to identify property that needs revaluation. The property valuation shall be reviewed by an independent valuer when information indicates that the value of the property may have declined materially relative to general market prices. For loans exceeding EUR 3 million or 5% of the own funds of the credit institution, the property valuation shall be reviewed at least every three years.

Or. en

Justification

This requirement to have the property evaluated by an independent valuer at least every three years is overly burdensome and goes beyond bank practices. A bank should be allowed to use internal valuers where that facility exists.


Amendment 714Annex VIII, part 2, paragraph 8, point (d)

(d) InsuranceThe credit institution shall have procedures to monitor that the property taken as protection is adequately insured against damage.

deleted

Or. en

Justification

This requirement to have the property evaluated by an independent valuer at least every three


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years is overly burdensome and goes beyond bank practices. A bank should be allowed to use internal valuers where that facility exists.



(d) InsuranceThe credit institution shall have procedures to monitor that the property taken as protection is adequately insured against damage.

(d) InsuranceThe credit institution shall have procedures to ensure that the property taken as protection is adequately insured against damage when the credit is granted

Or. en

Justification

It should be ascertained that the property is insured at the outset.


Amendment 716Annex VIII, part 2, paragraph 9, point (b) (ii)

(ii) The margin between the amount of the exposure and the value of the receivables must reflect all appropriate factors, including the cost of collection, concentration within the receivables pool pledged by an individual borrower, and potential concentration risk within the credit institution’s total exposures beyond that controlled by the credit institution’s general methodology. The credit institution must maintain a continuous monitoring process appropriate to the receivables. Observance of the credit institution’s overall concentration limits shall be monitored. Additionally, compliance with loan covenants, environmental restrictions, and other legal requirements shall be reviewed on a regular basis.

(ii) The margin between the amount of the exposure and the value of the receivables must reflect all appropriate factors, including the cost of collection, concentration within the receivables pool pledged by an individual borrower, and potential concentration risk within the credit institution’s total exposures beyond that controlled by the credit institution’s general methodology. The credit institution must maintain a continuous monitoring process appropriate to the receivables. Additionally, compliance with loan covenants, environmental restrictions, and other legal requirements shall be reviewed on a regular basis.

Or. en


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Justification

For netting and funded credit protection, it is irrelevant who has provided the collateral. In 99% of cases it will be provided by the client itself. Furthermore, though there can be concentrations in the underlying parties on whom a bank's client has a claim, it is impossible for an international bank with many different legal entities and systems to combine the data of the receivable issuers to identify these concentrations. In addition, this is a double default issue and we note that the issue of double default is being examined by the Basel/IOSCO Trading Book.





Or. en

Justification

Banks normally track (concentrations in) unfunded credit protection providers by adding guarantees and credit derivatives issued by a counterparty to this counterparty's overall exposure level and by managing this overall exposure level. For netting and funded credit protection, it is irrelevant who has provided the collateral (the bank is basically only interested in having a legally effective pledge on the collateral). Also, in 99% of the cases the collateral will be provided by the client itself (exceptionally its parent). There is one important exception: receivables as collateral. There can indeed be concentrations in the underlying parties on whom a bank's client has a claim. It is however impossible for an


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international bank consisting of many different legal entities with different source systems to combine the data of these different receivable issuers so that these concentrations can be identified. Already, matching counterparty identifiers is impossible The operational burden for banks would be enormous. This requirement would only be relevant for specialised banks active in limited industry sectors.

In addition, we note that the issue of double default is being examined by the Basel/IOSCO Trading Book review so we believe that it is premature to include this requirement into Level 1 text at this time. This amendment is linked to the proposed amendment of Annex VIII, paragraph 9.





Or. en

Justification

Banks normally track (concentrations in) unfunded credit protection providers by adding guarantees and credit derivatives issued by a counterparty to this counterparty's overall exposure level and by managing this overall exposure level. For netting and funded credit protection, it is irrelevant who has provided the collateral (the bank is basically only interested in having a legally effective pledge on the collateral). Also, in 99% of the cases the collateral will be provided by the client itself (exceptionally its parent). There are two important exceptions: receivables and securities as collateral. With receivables there can indeed be concentrations in the underlying parties on whom a bank's client has a claim.


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Banks usually monitor concentration of those parties on a counterparty level, which limits the importance of any single underlying party for the respective exposure. Also receivables often have a high turnover, resulting in inconstant composition and overall concentration. For an international bank consisting of many different legal entities with different source systems it is practically impossible to combine the data of these different receivable issuers so that these concentrations can be identified. Already, matching counterparty identifiers is impossible. The additional operational burden for banks would be enormous, while the added value to risk management minimal.


Amendment 719Annex VIII, part 2, paragraph 10, point (c)

(c) The value of the property shall be monitored on a frequent basis and at a minimum once every year. More frequent monitoring shall be required where the market is subject to significant changes in conditions.

(c) The value of the property shall be monitored on a frequent basis. More frequent monitoring shall be required where the market is subject to significant changes in conditions.

Or. en

Justification

The requirements to monitor the value at a minimum once every year is inappropriate and unnecessary. It would lead to substantial additional costs with no benefit in term of risks management and goes beyond the requirements of the revised Basel framework.



(c) The value of the property shall be monitored on a frequent basis and at a minimum once every year. More frequent monitoring shall be required where the market is subject to significant changes in conditions.

(c) The value of the property shall be monitored on a frequent basis. More frequent monitoring shall be required where the market is subject to significant changes in conditions.

Or. en


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Justification

Proper insurance is included in the credit agreement as an obligation of the counterparty and breach of it is usually an event of default. However, it will be therefore impossible to monitor insurance on such properties, particularly for retail mortgages as insurance companies cannot be required to advise credit institutions that such insurance is still in place or has been cancelled. Obligors as consumers will be unwilling to regularly provide such information to credit institutions. As property portfolios are granular and well diversified, the risk arising from not tracking such insurance is minimal. The requirements to monitor the value at a minimum once every year, to have policies in place to physically inspect the property and to monitor the insurance are inappropriate and unnecessary. It would lead to substantial additional costs with no benefit in term of risks management. Only for specialised lending and leasing credit institutions normally rely on guarantying cash flow of the borrower to repay the debt. Theses requirements go also beyond the requirements of the revised Basel framework.


Amendment 721Annex VIII, part 2, paragraph 10, point (f)

(f) The credit institution’s credit policies with regard to the transaction structure shall address appropriate collateral requirements relative to the exposure amount, the ability to liquidate the collateral readily, the ability to establish objectively a price or market value, the frequency with which the value can readily be obtained (including a professional appraisal or valuation), and the volatility of the value of the collateral.

(f) The credit institution’s credit policies with regard to the transaction structure shall address appropriate collateral requirements relative to the exposure amount, the ability to liquidate the collateral readily, the ability to establish objectively a price or market value, the frequency with which the value can readily be obtained (including a professional appraisal or valuation), and the volatility or a proxy of the volatility of the value of the collateral.

Or. en

Justification

While it is common practice for a credit institution’s credit policy to address the type of exposure and to whom it is made, including taking into account collateral values, this requirement may lead to misinterpretation. Indeed, while for some types of assets such as motor cars and aircrafts for example an institution is able to be aware of value fluctuations, for others this is difficult to determine.


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Amendment 722Annex VIII, part 2, paragraph 10, point (h)

(h) The credit institution must have the right to phsically inspect the property. It shall have policies and procedures addressing its exercise of the right to physical inspection.

deleted

Or. en

Justification

Proper insurance is included in the credit agreement as an obligation of the counterparty and breach of it is usually an event of default. However, it will be therefore impossible to monitor insurance on such properties, particularly for retail mortgages as insurance companies cannot be required to advise credit institutions that such insurance is still in place or has been cancelled. Obligors as consumers will be unwilling to regularly provide such information to credit institutions. As property portfolios are granular and well diversified, the risk arising from not tracking such insurance is minimal. The requirements to monitor the value at a minimum once every year, to have policies in place to physically inspect the property and to monitor the insurance are inappropriate and unnecessary. It would lead to substantial additional costs with no benefit in term of risks management. Only for specialised lending and leasing credit institutions normally rely on guarantying cash flow of the borrower to repay the debt. Theses requirements go also beyond the requirements of the revised Basel framework.


Amendment 723Annex VIII, part 2, paragraph 10, point (i)

(i) The credit institution must have procedures to monitor that the property taken as protection is adequately insured against damage.

deleted

Or. en

Justification

Proper insurance is included in the credit agreement as an obligation of the counterparty and breach of it is usually an event of default. However, it will be therefore impossible to monitor insurance on such properties, particularly for retail mortgages as insurance companies


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cannot be required to advise credit institutions that such insurance is still in place or has been cancelled. Obligors as consumers will be unwilling to regularly provide such information to credit institutions. As property portfolios are granular and well diversified, the risk arising from not tracking such insurance is minimal. The requirements to monitor the value at a minimum once every year, to have policies in place to physically inspect the property and to monitor the insurance are inappropriate and unnecessary. It would lead to substantial additional costs with no benefit in term of risks management. Only for specialised lending and leasing credit institutions normally rely on guarantying cash flow of the borrower to repay the debt. Theses requirements go also beyond the requirements of the revised Basel framework.


Amendment 724Annex VIII, part 2, paragraph 10, point (i)

(i) The credit institution must have procedures to monitor that the property taken as protection is adequately insured against damage.

(i) The credit institution must have procedures to ensure that the property taken as protection is adequately insured against damage when the credit is granted.

Or. en

Justification

It should be ascertained that the property is insured at the outset.



(a) The conditions set out in paragraphs 8 or 10 as appropriate for the recognition as collateral of the type of property leased shall be met;

(a) The conditions set out in paragraphs 8 or 10 as appropriate for the recognition as collateral of the type of property leased shall be met, except for paragraphs 8(b) and 10(c);

Or. en

Justification

The monitoring of collateral values by the lessor is an inherent part of the lessor’s risk management and does not warrant separate conditions to ensure this. Therefore, an adequate solution would be to remove the obligation to comply with minimum requirements for


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valuation and to monitore of real estate and other physical collateral and instead to include an explicit reference to monitoring property values as a part of robust risk management in the minimum requirements specific to leasing transactions.



b) der Leasinggeber hinsichtlich der Überwachung von Standort, Verwendungszweck, Alter und geplanter Nutzungsdauer des Gegenstands über ein solides Risikomanagement verfügt,

(b) der Leasinggeber hinsichtlich Verwendungszweck des geleasten Vermögenswertes, seines Alters und seiner geplanten Nutzungsdauer über ein solides Risikomanagement verfügt, einschließlich einer angemessenen Überwachung des Wertes der Sicherheit,

Or. de

Justification

Der Leasinggeber kann den Standort des Leasingobjekts nicht kontinuierlich verfolgen, sondern als Eigentümer des Vermögenswerts den Standort nur innerhalb einer bestimmten Frist ausfindig machen.



(b) There shall be robust risk management on the part of the lessor with respect to the location of the asset, the use to which it is put, its age, and planned obsolescence;

(b) There shall be robust risk management on the part of the lessor with respect to the use to which the leased asset is put, its age, and planned obsolescence and including appropriate monitoring of the collateral value;

Or. en

Justification

It must be clearly understood that it is impossible for a lessor to keep constant track of the location of an asset such a car or container. Furthermore, this requirement has been translated in different ways across the European nations, leading to additional confusion about the intent of the requirements. As described in the justification for the previous


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amendment, it should be highlighted the fact that monitoring collateral values must form an inherent part of the lessor’s risk management.



d) die Differenz zwischen der Abschreibungsquote des Leasinggegenstands und der Amortisationsrate der Leasingzahlungen den kreditrisikomindernden Effekt des Leasingobjektes nicht übersteigt.

(d) soweit nicht bereits bei der Berechnung der LGD-Höhe ermittelt, die Differenz zwischen dem Wert des ungetilgten Betrages und dem Marktwert der Sicherheit den kreditrisikomindernden Effekt des Leaingobjekts nicht übersteigt.

Or. de

Justification

Der Wert des ungetilgten Betrags sollte nicht zu weit vom Marktwert abweichen. Ferner greift die Anforderung nur, wenn das Risiko des Basisvermögenswertes nicht bereits bei der Berechnung des LGDs berücksichtigt wurde.



(d) The difference between the rate of depreciation of the physical asset and the rate of amortisation of the lease payments must not be so large as to overstate the credit risk mitigation attributed to the leased assets.

(d) If not already estimated in the calculation of LGD levels, the difference between the value of the outstanding amount and the market value of the collateral must not be so large as to overstate the credit risk mitigation attributed to the leased assets.

Or. en

Justification

The Commission's text may lead to practical difficulties as it is currently stated. It is felt that is may be more suitable to express this requirement in terms of the value of outstanding amount not being allowed to deviate too far from market value.


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c) Der betreffende Lebensversicherer wurde über die Verpfändung bzw. Abtretung in Kenntnis gesetzt und kann aufgrund dessen nur mit Zustimmung des kreditgebenden Kreditinstitut den Vertrag kündigen oder im Rahmen des Vertrages fällige Beträge auszahlen.

(c) Der betreffende Lebensversicherer wurde über die Verpfändung bzw. Abtretung in Kenntnis gesetzt und kann aufgrund dessen nur mit Zustimmung des kreditgebenden Kreditstitut im Rahmen des Vertrages fällige Beträge auszahlen.

Or. de

Justification

Die Kündigung des Versicherungverhältnisses kann nicht von der Zustimmung des kreditgebenden Kreditinstituts abhängig gemacht werden, denn die Kündigungsgründe werden naturgemäss nur aus dem Verhältnis Versicherungsnehmer-Versicherer abgeleitet.



d) Die Versicherungspolice weist einen nichtreduzierbaren Rückkaufswert aus.

d) Der Rückkaufswert der Versicherung ist nicht reduzierbar.

Or. de

Justification

Eine Änderung von 13 d) ist erforderlich, da die Versicherungspolice in der Regel keine Angaben zum Rückkaufswert enthält.



d) Die Versicherungspolice weist einen nichtreduzierbaren Rückkaufswert aus.

d) Der Rückkaufswert der Versicherung ist nicht reduzierbar.


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Or. deJustification

Eine Änderung von 13 d) ist erforderlich, da die Versicherungspolice in der Regel keine Angaben zum Rückkaufswert enthält.


Amendment 733Annex VIII, part 2, paragraph 13, point (g)

g) Die Sicherheit wird für die Laufzeit des Kredits gestellt.

(g) Die Sicherheit wird für die Laufzeit des Kredits gestellt. Soweit dies nicht möglich ist, weil das Versicherungsverhältnis bereits vor Ablauf des Kreditverhältnisses endet, so muss das Kreditinstitut sicherstellen, dass der aus dem Versicherungsvertrag fliessende Betrag bis zum Ende der Laufzeit des Kreditvertrages dem Kreditinstitut als Sicherheit dient.

Or. de

Justification

In der Regel haben Versicherungsvertrag und Kreditvertrag keine kongruente Laufzeit. Die Ergänzung trägt diesem Umstand Rechnung.



(h) Der Pfand ist in allen relevanten Rechtsordnungen gerichtlich durchsetzbar.

(h). Das Pfand ist in allen zum Zeitpunkt des Kreditvertragsschlusses relevanten Rechtsordnungen gerichtlich durchsetzbar.

Or. de

Justification



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(h) Der Pfand ist in allen relevanten Rechtsordnungen gerichtlich durchsetzbar.

(h) Das Pfand ist in allen zum Zeitpunkt des Kreditvertragsschlusses relevanten Rechtsordnungen gerichtlich durchsetzbar.

Or. de

Justification

Es bedarf der Klarstellung, dass Kreditinstitute nicht bereits bei Vertragsschluss alle 25 Rechtssysteme prüfen müssen. Vielmehr müssen sie nur die Rechtssysteme prüfen, die in der jeweiligen Prüfungssituation relevant sind.



1.8.3 Minimum requirements for the recognition of commodity warrants and commodities:

Or. en

Justification

The amendment stipulates the material prerequisites of collateral in Annex VIII part 2. Thus, common hedging transactions accepted as risk-mitigating in the energy market, may also be recognised as risk-mitigating for hedging positions.



13a. Commodities and commodity warrants may be recognised as eligible collateral if they are readily realisable and if transparent and reliable market prices exist for them.


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Or. enJustification




(d) Die Absicherung ist in allen relevanten Rechtsordnungen gerichtlich durchsetzbar.

(d) Die Absicherung ist in allen zum Zeitpunkt des Kreditvertragsschlusses relevanten Rechtsordnungen gerichtlich durchsetzbar.

Or. de

Justification




(d) Die Absicherung ist in allen relevanten Rechtsordnungen gerichtlich durchsetzbar.

(d) Die Absicherung ist in allen zum Zeitpunkt des Kreditvertragesschlusses relevanten Rechtsordnungen gerichtlich durchsetzbar.

Or. de

Justification

Es bedarf der Klarstellung, dass Kreditinstitute nicht bereits bei Vertragsschluss alle 25 Rechtssysteme prüfen müssen. Vielmehr müssen sie nur die Rechtssysteme prüfen, die in der jeweiligen Prüfungssituation relevant sind.


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2.1.2. Credit protection for energy institutions according to article 3 (t) of the Directive [93/6/EC]:

Or. en

Justification




15a. Guarantees or securities issued by undertakings in the meaning of Annex VIII, part 1, paragraph 26 (h) of this Directive that met the conditions set out in paragraph 14 of part 2.

Or. en

Justification

See comments on Annex VIII, part 1, paragraph 26(ga) (new).



16. Where an exposure is protected by a guarantee which is counter-guaranteed by a central government or central bank, a regional government or local authority claims on which are treated as claims on the sovereign in whose jurisdiction they are

16. Where an exposure is protected by a guarantee which is directly or indirectly counter-guaranteed by a central government or central bank, a regional government or local authority claims on which are treated as claims on the central government in


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established under Articles 78 to 83, a multi-lateral development bank to which a 0% risk weight is applied under or by virtue of Articles 78 to 83, or a public sector entity claims on which are treated as claims on credit institutions under Articles 78 to 83, the exposure may be treated as protected by a guarantee provided by the entity in question provided the following conditions are satisfied:

whose jurisdiction they are established under Articles 78 to 83, a multi-lateral development bank to which a 0% risk weight is applied under or by virtue of Articles 78 to 83, or a public sector entity claims on which are treated as claims on credit institutions under Articles 78 to 83, the exposure may be treated as protected by a guarantee provided by the entity in question provided the following conditions are satisfied:

Or. en

Justification

The way in which eligible counter-guarantors operate in the various Member States is not homogeneous. In some countries the eligible counter-guarantor guarantees directly the guarantor. In others, it guarantees the guarantor indirectly via a technical means which is normally a guarantee fund. It is important that the directive maintains a neutral stance vis à vis the technique eligible guarantors choose to operate with due to the specific conditions prevailing in a given national market. The three conditions specified at the end of the paragraph, and in particular the requirement for competent authorities to be satisfied ensures in all admissible cases that any chosen technical means does not create any prudential concern.



16. Where an exposure is protected by a guarantee which is counter-guaranteed by a central government or central bank, a regional government or local authority claims on which are treated as claims on the sovereign in whose jurisdiction they are established under Articles 78 to 83, a multi-lateral development bank to which a 0% risk weight is applied under or by virtue of Articles 78 to 83, or a public sector entity claims on which are treated as claims on credit institutions under Articles 78 to 83, the exposure may be treated as protected by a guarantee provided by the entity in question provided the following conditions

16. Where an exposure is protected by a guarantee which is counter-guaranteed by a central government or central bank, a regional government or local authority claims on which are treated as claims on the central government in whose jurisdiction they are established under Articles 78 to 83, a multi-lateral development bank to which a 0% risk weight is applied under or by virtue of Articles 78 to 83, or a public sector entity claims on which are treated as claims on credit institutions under Articles 78 to 83, the exposure may be treated as protected by a guarantee provided by the entity in question provided the following conditions


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are satisfied: are satisfied:

Or. en

Justification




(a) On the qualifying default/non-payment of the counterparty, the lending credit institution shall have the right to pursue, in a timely manner, the guarantor for any monies due under the claim in respect of which the protection is provided. Payment by the guarantor shall not be subject to the lending credit institution first having to pursue the obligor.

(a) On the qualifying default/non-payment of the counterparty, the lending credit institution shall have the right to pursue, in a timely manner, the guarantor for any monies due under the claim in respect of which the protection is provided. Payment by the guarantor shall not be subject to the lending credit institution first having to pursue the obligor, unless the guarantor pays for the financial cost subsequent to the delay of payment.

Or. en

Justification

The impossibility for the payment to be subject to the lending credit institution first having to pursue the obligor does not correspond to the practice of some companies providing guarantees to SMEs. This will prejudice SMEs in so far as fewer enterprises could thereon receive guarantees, and, accordingly, financing. It is consequently suggested to make it possible that the payment by the guarantor be subject to the lending credit institution first having to pursue the obligor if the guarantor pays for the financial cost subsequent to the delay of payment.



17a. In the case of unfunded credit protection covering residential mortgage loans, the requirements in paragraph 14(c)


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(iii) and 17(a) shall be deemed applicable at completion by the lender of any legal or other proceedings required to acquire title to or realize the value of mortgage collateral.

Or. en

Justification

The proposed amendment aims at increasing legal certainty regarding the use of unfunded credit protection on loans secured by mortgage collateral. The amendment is consistent with the definition of unfunded credit protection (art. 4) and the provision contained in paragraph 18.



17a. In the case of unfunded credit protection covering residential mortgage loans, the requirements in paragraph 14(c) (iii) and 17(a) shall be deemed applicable at completion by the lender of any legal or other proceedings required to acquire title to or realize the value of mortgage collateral.

Or. en

Justification

The proposed amendment aims at increasing legal certainty regarding the use of unfunded credit protection on loans secured by mortgage collateral. In several EU countries, this type of credit risk mitigation is frequently used to provide lenders with additional security against credit losses. These may indeed occur should the mortgage collateral [the property] fail to cover the entire amount of the loan outstanding at the time of default. In such situations, the execution of the unfunded credit protection is thus subject to the realisation of the value of the loan's collateral, which finally determines the amount of any credit losses. The amendment is consistent with the definition of unfunded credit protection [art. 4] and the provision contained in paragraph 18 for mutual guarantee schemes.


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17a. In the case of unfunded credit protection covering residential mortgage loans, the requirements in paragraph 14(c) (iii) and 17(a) shall be deemed applicable at completion by the lender of any legal or other proceedings required to acquire title to or realize the value of mortgage collateral.

Or. en

Justification

The proposed amendment aims at increasing legal certainty regarding the use of unfunded credit protection on loans secured by mortgage collateral. In several EU countries, this type of credit risk mitigation is frequently used to provide lenders with additional security against credit losses. These may indeed occur should the mortgage collateral [the property] fail to cover the entire amount of the loan outstanding at the time of default. In such situations, the execution of the unfunded credit protection is thus subject to the realisation of the value of the loan's collateral, which finally determines the amount of any credit losses.



16. Where an exposure is protected by a guarantee which is counter-guaranteed by a central government or central bank, a regional government or local authority claims on which are treated as claims on the sovereign in whose jurisdiction they are established under Articles 78 to 83, a multi-lateral development bank to which a 0% risk weight is applied under or by virtue of Articles 78 to 83, or a public sector entity claims on which are treated as claims on credit institutions under Articles 78 to 83, the exposure may be treated as protected by a guarantee provided by the entity in question provided the following conditions are satisfied:

16. Where an exposure is protected by a guarantee which is counter-guaranteed by a central government or central bank, a regional government or local authority or a public sector entity claims on which are treated as claims on the central government in whose jurisdiction they are established under Articles 78 to 83, a multi-lateral development bank to which a 0% risk weight is applied under or by virtue of Articles 78 to 83, or a public sector entity claims on which are treated as claims on credit institutions under Articles 78 to 83, the exposure may be treated as protected by a guarantee provided by the entity in question provided the following conditions


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are satisfied:

Or. en

Follows from Amendment 111 of Radwan draft report.



(b) the competent authorities are otherwise satisfied as to the loss-protecting effects of the guarantee, including losses resulting from the non-payment of interest and other types of payment which the borrower is obliged to make.

(b) the lending credit institution can demonstrate that the loss-protecting effects of the guarantee, including losses resulting from the non-payment of interest and other types of payment which the borrower is obliged to make.

Or. en

Justification

Alignment with Council text (English version). Substitution of amendment 191 of Radwan draft report.


Amendment 750Annex VIII, part 2, paragraph 19, point (a) (i)

(i) the failure to pay the amounts due under the terms of the underlying obligation that are in effect at the time of such failure (with a grace period that is closely in line with or shorter than the grace period in the underlying obligation); and

(i) the failure to pay the amounts due under the terms of the underlying obligation that are in effect at the time of such failure (with a grace period that is closely in line with or shorter than the grace period in the underlying obligation);

Or. en

Justification



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(b) Where the credit events specified under the credit derivative do not include restructuring of the underlying obligation as described in the third indent of (a), the credit protection may nonetheless be recognised subject to a reduction in the recognised value as specified in part 3, paragraph 84.

(b) Where the credit events specified under the credit derivative do not include restructuring of the underlying obligation as described in point (iii) of subparagraph (a), the credit protection may nonetheless be recognised subject to a reduction in the recognised value as specified in part 3, paragraph 84.

Or. en

Justification




1. Subject to parts 4 to 6, where the provisions in parts 1 and 2 are satisfied, the calculation of risk-weighted exposure amounts under Subsection 1 Articles 78 to 83 and the calculation of risk-weighted exposure amounts and expected loss amounts under Articles 84 to 89 may be modified in accordance with the provisions of this part.

1. Subject to parts 4 to 6, where the provisions in parts 1 and 2 are satisfied, the calculation of risk-weighted exposure amounts under Articles 78 to 83 and the calculation of risk-weighted exposure amounts and expected loss amounts under Articles 84 to 89 may be modified in accordance with the provisions of this part.

Or. en

Justification

Cross reference / Typographical error..


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12. As an alternative to using the Supervisory volatility adjustments approach or the Own Estimates volatility adjustments approach in calculating the fully adjusted exposure value (E*) resulting from the application of an eligible master netting agreement covering repurchase transactions, securities or commodities lending or borrowing transactions, and/or other capital market driven transactions other than derivative transactions, credit institutions may be permitted to use an internal models approach which takes into account correlation effects between security positions subject to the master netting agreement as well as the liquidity of the instruments concerned. Internal models used in this approach shall provide estimates of the potential change in value of the unsecured exposure amount (∑E - ∑C).

12. As an alternative to using the Supervisory volatility adjustments approach or the Own Estimates volatility adjustments approach in calculating the fully adjusted exposure value (E*), credit institutions may be permitted to use an internal models approach for repurchase transactions, securities or commodities lending or borrowing transactions, and/or other capital market driven transactions other than derivative transactions. Internal models must assess potential change in exposure subject to minimum standards set out below and in particular should take into account correlation effects between security positions as well as the liquidity of the instruments concerned. Models may reflect netting, but only where such netting is permissible in view of master netting agreements covering the positions.

Or. en

Justification

The draft proposed by the Commission could imply that internal models can only be used if all transactions are covered by a netting agreement. Credit institutions should be allowed to take account of diversification across their market risk positions with a given counterparty regardless of the applicability of netting. Netting and diversification are distinct concepts. The existence of a netting agreement reduces both the current and future exposure to a counterparty. Diversification, which is recognised in internal models, limits future exposure without the need for a netting agreement being in place.



13. A credit institution may choose to use an internal models approach independently of the choice it has made between the

13. A credit institution may choose to use an internal models approach independently of the choice it has made between the


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Standardised Approach and the IRB Foundation Approach to credit risk. However, if a credit institution seeks to use an internal models approach, it must do so for all the counterparties and securities, excluding immaterial portfolios where it may use the Supervisory volatility adjustments approach or the Own estimates volatility adjustments approach as set out in paragraphs 5 to 11.

Standardised Approach and the IRB Foundation Approach to credit risk.

Or. en

Justification

This is super equivalent to the Basel Framework. It also suggests a major difference between own estimates of volatility and the use of internal models.



13. A credit institution may choose to use an internal models approach independently of the choice it has made between the Standardised Approach and the IRB Foundation Approach to credit risk. However, if a credit institution seeks to use an internal models approach, it must do so for all counterparties and securities, excluding immaterial portfolios where it may use the Supervisory volatility adjustments approach or the Own estimates volatility adjustments approach as set out in paragraphs 5 to 11.

13. A credit institution may choose to use an internal models approach independently of the choice it has made between Articles 78 to 83 and Articles 84 to 89 for the calculation of risk-weighted exposure amounts. However, if a credit institution seeks to use an internal models approach, it must do so for all counterparties and securities, excluding immaterial portfolios where it may use the Supervisory volatility adjustments approach or the Own estimates volatility adjustments approach as set out in paragraphs 5 to 11.

Or. en

Justification



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19. The competent authorities may allow credit institutions to use empirical correlations within risk categories and across risk categories if they are satisfied that the institution's system for measuring correlations is sound and implemented with integrity`.

19. The competent authorities may allow credit institutions to use empirical correlations within risk categories and across risk categories if they are satisfied that the credit institution's system for measuring correlations is sound and implemented with integrity`.

Or. en

Justification



Amendment 757Annex VIII, part 3, paragraph 21, subparagraph 3

Where risk-weighted exposure amounts are calculated under Subsection 1 Articles 78 to 83, E is the exposure value for each separate exposure under the agreement that would apply in the absence of the credit protection.

Where risk-weighted exposure amounts are calculated under Articles 78 to 83, E is the exposure value for each separate exposure under the agreement that would apply in the absence of the credit protection.

Or. en

Justification




27. The risk weight that would apply under Articles 78 to 83 if the lender had a direct exposure to the collateral instrument shall apply to those portions of claims

27. The risk weight that would apply under Articles 78 to 83 if the lender had a direct exposure to the collateral instrument shall apply to those portions of claims


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collateralised by the market value of recognised collateral. The risk weight on the collateralised portion shall be a minimum of 20% except as specified in paragraphs 28 to 30. The remainder of the exposure shall receive the risk weight that would be applied to an unsecured exposure to the counterparty under Articles 78 to 83.

collateralised by the market value of recognised collateral. The risk weight of the collateralised portion shall be a minimum of 20% except as specified in paragraphs 28 to 30. The remainder of the exposure shall receive the risk weight that would be applied to an unsecured exposure to the counterparty under Articles 78 to 83.

Or. en

Justification



Amendment 759Annex VIII, part 3, paragraph 37, Table 5, column 2, row 2

20 day liquidation period (%) 10 day liquidation period (%)

Or. en

Justification




43. The competent authorities may permit institutions complying with the requirements set out in paragraphs 48 to 57 to use their own estimates of volatility for calculating the volatility adjustments to be applied to collateral and exposures.

43. The competent authorities shall permit credit institutions complying with the requirements set out in paragraphs 48 to 57 to use their own estimates of volatility for calculating the volatility adjustments to be applied to collateral and exposures.

Or. en


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Justification

Alignment with Council proposal. Replaces amendment 200 of the Radwan draft report.



43. The competent authorities may permit institutions complying with the requirements set out in paragraphs 48 to 57 to use their own estimates of volatility for calculating the volatility adjustments to be applied to collateral and exposures.

43. The competent authorities shall permit credit institutions complying with the requirements set out in paragraphs 48 to 57 to use their own estimates of volatility for calculating the volatility adjustments to be applied to collateral and exposures.

Or. en

Justification

Cross reference / Typographical error. Replaces Amendment 200 of Radwan draft report.



71. Where the ratio of the value of the collateral to the exposure value exceeds a second, higher threshold level of C** (i.e. the required level of collateralisation to receive full LGD recognition) as laid down in Table 6, LGD* shall be that prescribed in the following table.

71. Where the ratio of the value of the collateral to the exposure value exceeds a second, higher threshold level of C** (i.e. the required level of collateralisation to receive full LGD recognition) as laid down in Table 6, LGD* shall be that prescribed in Table 6.

Or. en

Justification



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Amendment 763Annex VIII, part 3, paragraph 73, Table 6, column 5, row3

140% 100%

Or. en

Justification

This requirement will have a negative impact on individual borrowers or SMEs. Indeed, these types of borrowers often receive finance in cases where the amount of the exposure is the same as the value of the collateral, i.e. 100% of the purchase price of an asset is often financed by the credit institution. Given a degree of collateralisation of 140%, the institution may only grant a part of the necessary sum. The borrower would therefore either be faced with a higher cost of lending or have to provide other types of collateral.


Amendment 764Annex VIII, part 3, paragraph 73, Table 6, column 5, row3

140% 100%

Or. en

Justification

The minimum collateralisation level of exposures has a negative impact on the financing of SMEs. Indeed, the financing of movable assets is often the only opportunity for those companies to invest (generally 100% of the purchase price) in working capital. Furthermore, this condition is an inadequate duplication of the provisioning which is already inherent in the levels of LGD with the result of severely increasing the level of capital a lessor would have to hold under the IRBF approach in comparison with the other approaches.



140% 100%

Or. en


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Justification




140% 100%

Or. en

Justification

The minimum collateralisation level of exposures has a negative impact on the financing of SMEs. Indeed, the financing of movable assets is often the only opportunity for those companies to invest (generally 100% of the purchase price) in working capital. Furthermore, this condition is an inadequate duplication of the provisioning which is already inherent in the levels of LGD with the result of severely increasing the level of capital a lessor would have to hold under the IRBF approach in comparison with the other approaches.


Amendment 767Annex VIII, part 3, paragraph 73, subparagraph 2, introductory part

By way of derogation, until 31 December 2012 the competent authorities may, subject to the indicated levels of collateralization

By way of derogation, until 31 December 2012, subject to the indicated levels of collateralization

Or. en

Justification

This requirement will have a negative impact on individual borrowers or SMEs. Indeed, these types of borrowers often receive finance in cases where the amount of the exposure is the same as the value of the collateral, i.e. 100% of the purchase price of an asset is often financed by the credit institution. Given a degree of collateralisation of 140%, the institution


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may only grant a part of the necessary sum. The borrower would therefore either be faced with a higher cost of lending or have to provide other types of collateral.


Amendment 768Annex VIII, part 3, paragraph 73, subparagraph 2, , introductory part

By way of derogation, until 31 December 2012 the competent authorities may, subject to the indicated levels of collateralization

By way of derogation, until 31 December 2012, subject to the indicated levels of collateralization

Or. en

Justification

In order to ensure consistent application of LGD levels throughout the EU, the LGD levels of 30% for commercial real estate leasing exposures and senior exposures secured by residential and commercial real estate and 35% for equipment leasing exposures should not be a matter of national discretion. Indeed, this would lead to competitive distoritions if certain members states chose to apply the discretion while others do not.


Amendment 769Annex VIII, part 3, paragraph 73, subparagraph 2, point (a)

(a) allow credit institutions to assign a 30% LGD for senior exposures in the form of Commercial Real Estate leasing; and

(a) credit institutions may assign a 30% LGD for senior exposures in the form of Commercial Real Estate leasing; and

Or. en

Justification



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Amendment 770Annex VIII, part 3, paragraph 73, subparagraph 2, point (a)

(a) allow credit institutions to assign a 30% LGD for senior exposures in the form of Commercial Real Estate leasing; and

(a) credit institutions may assign a 30% LGD for senior exposures in the form of Commercial Real Estate leasing; and

Or. en

Justification



Amendment 771Annex VIII, part 3, paragraph 73, subparagraph 2, point (b)

(b) allow credit institutions to assign a 35% LGD for senior exposures in the form of equipment leasing.

(b) credit institutions may assign a 35% LGD for senior exposures in the form of equipment leasing.

Or. en

Justification



Amendment 772Annex VIII, part 3, paragraph 73, subparagraph 2, point (b)


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(b) allow credit institutions to assign a 35% LGD for senior exposures in the form of equipment leasing.

(b) credit institutions may assign a 35% LGD for senior exposures in the form of equipment leasing.

Or. en

Justification



Amendment 773Annex VIII, part 3, paragraph 73, subparagraph 2, point (b a) (new)

(ba) credit institution may assign a 30% LGD for senior exposures secured by residential or commercial real estate.

Or. en

Justification



Amendment 774Annex VIII, part 3, paragraph 73, subparagraph 2, point (b a) (new)

(ba) credit institution may assign a 30% LGD for senior exposures secured by residential or commercial real estate.

Or. en


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Justification



Amendment 775Annex VIII, Part 3, paragraph 73, subparagraph 4 a (new)

In both cases, the required minimum collateralisation level of the exposure (C*) will be 100%.

Or. en

Justification

The draft directive allow credit institutions, until 31/12/2012, to apply a LGD of 30% to real estate leasing exposures and of 35% to equipment leasing exposures (instead of 40% for other collaterals).

These LGD’s remain nonetheless notably higher than those that are shown by the industry statistics. It would therefore be justified to bring the over-collateralisation requirement from 140% to 100% for leasing exposures.

This ownership grants the lessor a level of security unknown in any other type of finance contract



74. Subject to the requirements of this paragraphs and paragraph 75 and as an alternative to the treatment in paragraphs 69 to 73, the competent authorities of a Member State may authorise credit institutions to apply a 50% risk weighting to the part of the

74. Subject to the requirements of this paragraph and paragraph 75 and as an alternative to the treatment in paragraphs 69 to 73, the competent authorities of a Member State may authorise credit institutions to apply a 50% risk weighting to the part of the


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exposure fully collateralised by residential real estate property or commercial real estate property situated within the territory of the Member State if they have evidence that the relevant markets are well-developed and long-established with loss-rates from lending collateralised by residential real estate property or commercial real estate property respectively that do not exceed the following limits:

exposure fully collateralised by residential real estate property or commercial real estate property situated within the territory of the Member State if they have evidence that the relevant markets are well-developed and long-established with loss-rates from lending collateralised by residential real estate property or commercial real estate property respectively that do not exceed the following limits:

(a) up to 50 % of the market value (or where applicable and if lower 60 % of the mortgage-lending-value) must not exceed 0.3 % of the outstanding residential real estate and/or commercial real estate loans in any given year.

(a) losses stemming from lending collateralised by residential real estate property or commercial real estate property respectively up to 50 % of the market value (or where applicable and if lower 60 % of the mortgage-lending-value) do not exceed 0.3 % of the outstanding loans collateralised by that form of real estate property in any given year.

(b) overall losses stemming from lending collateralised by residential real estate property or commercial real estate property respectively must not exceed 0.5 % of the outstanding loans collateralised by that form of real estate property in any given year.

(b) overall losses stemming from lending collateralised by residential real estate property or commercial real estate property respectively do not exceed 0.5 % of the outstanding loans collateralised by that form of real estate property in any given year.

Or. en

Justification




76. The competent authorities, which do not authorise the treatment in paragraph 73, may authorise credit institutions to apply the risk weights permitted under this treatment in respect of exposures collateralised by residential real estate property of commercial real estate property respectively located in the territory of those Member States the competent authorities of which

76. The competent authorities which do not authorise the treatment in paragraph 74, may authorise credit institutions to apply the risk weights permitted under this treatment in respect of exposures collateralised by residential real estate property of commercial real estate property respectively located in the territory of those Member States the competent authorities of which


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authorise this treatment subject to the same conditions as apply in that Member State.

authorise this treatment subject to the same conditions as apply in that Member State.

Or. en

Justification




90. The competent authorities may extend the treatment provided for in Annex VI, paragraphs 4 to 6 to exposures or portions of exposures guaranteed by the central government or central bank, where the guarantee is denominated in the domestic currency of the borrower and the exposure is funded in that currency.

90. The competent authorities may extend the treatment provided for in Annex VI, part 1, paragraphs 4 to 6 to exposures or portions of exposures guaranteed by the central government or central bank, where the guarantee is denominated in the domestic currency of the borrower and the exposure is funded in that currency.

Or. en

Justification



Amendment 779Annex IX, part 1, heading

part 1 - Definitions for purposes of Annex X part 1 - Definitions for purposes of Annex IX

Or. en

Justification



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Amendment 780Annex IX, part 2, paragraph 4

4. For clarity, paragraph 3 refers to the entire pool of exposures included in the securitisation. Subject to paragraphs 5 to 8, the originator credit institution is required to calculate risk-weighted exposure amounts in respect of all tranches in the securitisation in accordance with the provisions of part IV including those relating to the recognition of credit risk mitigation. For example, where a tranche is transferred by means of unfunded credit protection to a third party, the risk weight of that third party shall be applied to the tranche in the calculation of the originator credit institution’s risk-weighted exposure amounts.

4. For clarity, paragraph 3 refers to the entire pool of exposures included in the securitisation. Subject to paragraphs 5 to 8, the originator credit institution is required to calculate risk-weighted exposure amounts in respect of all tranches in the securitisation in accordance with the provisions of part 4 including those relating to the recognition of credit risk mitigation. For example, where a tranche is transferred by means of unfunded credit protection to a third party, the risk weight of that third party shall be applied to the tranche in the calculation of the originator credit institution’s risk-weighted exposure amounts.

Or. en

Justification




5. For the purposes of calculating risk-weighted exposure amounts in accordance with paragraph 3, any maturity mismatch between the credit protection by which the tranching is achieved and the securitised exposures shall be taken into consideration in accordance with paragraphs 6 to 8. The maturity of the securitised exposures shall be taken to be the longest maturity of any of those exposures subject to a maximum of five years.

5. For the purposes of calculating risk-weighted exposure amounts in accordance with paragraph 3, any maturity mismatch between the credit protection by which the tranching is achieved and the securitised exposures shall be taken into consideration in accordance with paragraphs 6 to 8. The maturity of the securitised positions shall be taken to be the weighted average maturity of those exposures subject to a maximum of five years.

Or. en


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Justification

Both average and maximum maturity are approximations, but by using the average the calculation will not be sensitive to individual long dated assets and will be more consistent with market practice. The five year cap should remain to retain consistency with the single name case of maturity mismatch. This will still be prudent, especially for sponsors, where the maturity of the exposure can be considerably less than the maturity of the underlying assets.



5. For the purposes of calculating risk-weighted exposure amounts in accordance with paragraph 3, any maturity mismatch between the credit protection by which the tranching is achieved and the securitised exposures shall be taken into consideration in accordance with paragraphs 6 to 8. The maturity of the securitised exposures shall be taken to be the longest maturity of any of those exposures subject to a maximum of five years.

5. For the purposes of calculating risk-weighted exposure amounts in accordance with paragraph 3, any maturity mismatch between the credit protection by which the tranching is achieved and the securitised exposures shall be taken into consideration in accordance with paragraphs 6 to 8. The maturity of the securitised positions shall be taken to be the weighted average maturity of those exposures subject to a maximum of five years.

Or. en

Justification

Both average and maximum maturity are approximations, but by using the average the calculation will not be sensitive to individual long dated assets and will be more consistent with market practice. The five year cap should remain to retain consistency with the single name case of maturity mismatch. This will still be prudent, especially for sponsors, where the maturity of the exposure can be considerably less than the maturity of the underlying assets.



5. For the purposes of calculating risk-weighted exposure amounts in accordance with paragraph 3, any maturity mismatch between the credit protection by which the

5. For the purposes of calculating risk-weighted exposure amounts in accordance with paragraph 3, any maturity mismatch between the credit protection by which the


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tranching is achieved and the securitised exposures shall be taken into consideration in accordance with paragraphs 6 to 8. The maturity of the securitised exposures shall be taken to be the longest maturity of any of those exposures subject to a maximum of five years.

tranching is achieved and the securitised exposures shall be taken into consideration in accordance with paragraphs 6 to 8.

Or. en

Justification




6. The maturity of the securitied exposures shall be taken to be the longest maturity of any of those exposures subject to a maximum of five years. The maturity of the credit protection shall be determined in accordance with Annex VIII .

6. The maturity of the securitised exposures shall be taken to be the weighted average maturity of those exposures subject to a maximum of five years. The maturity of the credit protection shall be determined in accordance with Annex VIII.

Or. en

Justification

See justification for amendment to Annex IX, part 2, paragraph 5.



6. The maturity of the securitied exposures shall be taken to be the longest maturity of any of those exposures subject to a maximum of five years. The maturity of the credit protection shall be determined in accordance with Annex VIII .

6. The maturity of the securitised exposures shall be taken to be the weighted average maturity of those exposures subject to a maximum of five years. The maturity of the credit protection shall be determined in accordance with Annex VIII.


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Or. enJustification

See justification for amendment to Annex IX, part 2, paragraph 5.


Amendment 786Annex IX, part 2, paragraph 7, introductory part

7. Greift ein Originator auf Teil 4 Absätze 6 bis 35 für die Berechnung der risikogewichteten Forderungsbeträge zurück, kann er jede Laufzeitinkongruenz bei der Berechnung der risikogewichteten Forderungsbeträge für Tranchen außer Acht lassen, die kein Rating oder ein Rating unter Investment Grade erhalten haben. Für alle anderen Tranchen erfolgt die Behandlung im Sinne der Laufzeitinkongruenz, die Gegenstand von Anhang VIII ist, gemäß der folgenden Formel:

7. Ein Originator hat jede Laufzeitinkongruenz bei der Berechnung der risikogewichteten Forderungsbeträge für Tranchen außer Acht zu lassen, die im Rahmen von Teil 4 mit einem Risikogewicht von 1250% belegt werden. Für alle anderen Tranchen erfolgt die Behandlung im Sinne der Laufzeitinkongruenz, die Gegenstand von Anhang VIII ist, gemäß der folgenden Formel:

Or. de

Justification

Diese Änderung ist eine Folge des ECOFIN-Vorschlages, den Absatz 8 in Anhang IX Teil 4 ersatzlos zu streichen. Dadurch werden Tranchen unterhalb von Investment Grade nicht mehr automatisch mit einem Risikogewicht von 1250% versehen. Daher sollte auch die Frage der Notwendigkeit der Berechnung einer Laufzeitinkonkruenz nicht mehr von dem Kriterium "Investment Grade" abhängen. Statt dessen sollte sich die (verschärfende) Ausnahme im Sinne der ursprünglichen Absicht und in Analogie zur Behandlung im IRB-Ansatz nur auf Tranchen mit einem Risikogewicht von 1250% beziehen. Durch die Änderung im ersten Satz wird eine Gleichbehandlung von Verbriefung im Standardansatz und IRB-Ansatz bewirkt. Die deutsche Übersetzung von "shall" ist "hat ... zu" statt "kann".



8. Greift ein Originator auf Teil 4 Absätze 36 bis 74 für die Berechnung der risikogewichteten Forderungsbeträge

entfällt


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zurück, kann er jede Laufzeitinkongruenz bei der Berechnung der risikogewichteten Forderungsbeträge für Tranchen oder Teile von Tranchen außer Acht lassen, die im Rahmen dieser Absätze mit einem Risikogewicht von 1250% belegt werden. Für alle anderen Tranchen oder Teile von Tranchen erfolgt die Behandlung der Laufzeitinkongruenz gemäß Anhang VIII und der Formel in Absatz 7.

Or. de

Justification

Durch die Änderung in Anhang IX Teil 2 Nummer 7 kann die Anforderungen in Nummer 8 in Nummer 7 integriert werden und Nummer 8 daher gestrichen werden.


Amendment 788Annex IX, part 3, paragraph 1, point (b)

(b) Es ist auf dem Markt öffentlich verfügbar. Ratings werden nur dann als öffentlich verfügbar angesehen, wenn sie im Rahmen eines öffentlich zugänglichen Forums veröffentlicht wurden und sie in die Übergangsmatrix der ECAI eingeflossen sind. Ratings, die nur einem begrenzten Kreis von Unternehmen zur Verfügung gestellt werden, gelten nicht als öffentlich verfügbar.

(b) Wenn die Verbriefung über ein öffentliches Angebot an Wertpapieren verläuft, soll die Bonitätsprüfung der ECAI öffentlich verfügbar sein. Ratings werden nur dann als öffentlich verfügbar angesehen, wenn sie im Rahmen eines öffentlich zugänglichen Forums veröffentlicht wurden und sie in die Übergangsmatrix der ECAI eingeflossen sind. Ratings, die als Teil einer privaten Abwicklung erstellt werden und die nur einem begrenzten Kreis von Unternehmen zur Verfügung gestellt werden, gelten als nur öffentlich verfügbar, falls Ratings von der ECAI auf eine Art und Weise erstellt und überprüft werden, die mit öffentlich bekanntgemachten Geschäften vergleichbar ist.

Or. de

Justification

Wenn die Verbriefung nicht über ein öffentliches Angebot verläuft, besteht keine


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Notwendigkeit, dass die Bonitätsprüfung öffentlich bekannt gegeben wird. Dennoch gewährleistet die Formulierung die notwendige Transparenz und Zuverlässigkeit der Bonitätsprüfung für Investoren.



4. Subject to paragraphs 5 and 6, a credit institution may not use an ECAI’s credit assessments for its positions in some tranches and another ECAI’s credit assessments for its positions in other tranches within the same structure that may or may not be rated by the first ECAI.

deleted

Or. en

Justification

This requirement may have the unintended consequence of reducing the competitive landscape of the ECAI market. Competition adds depth to market expertise and helps enhance best practice standards. The use of different ECAIs for different tranches should not be construed as evidence of cherry picking, rather reflective of the economics of transactions, the dynamic nature of the securitisation market and differentiated expertise of ECAIs.



5. In cases where a position has two credit assessments by nominated ECAIs, the credit institution shall use the less favourable credit assessment.

5. In cases where a tranche has two credit assessments by nominated ECAIs, the credit institution shall use the less favourable credit assessment.

Or. en

Justification

This requirement may have the unintended consequence of reducing the competitive landscape of the ECAI market. Competition adds depth to market expertise and helps enhance best practice standards. The use of different ECAIs for different tranches should not be construed as evidence of cherry picking, rather reflective of the economics of transactions, the


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dynamic nature of the securitisation market and differentiated expertise of ECAIs.



6. In cases where a position has more than two credit assessments by nominated ECAIs, the two most favourable credit assessments shall be used. If the two most favourable assessments are different, the least favourable of the two shall be used.

6. In cases where a tranche has more than two credit assessments by nominated ECAIs, the two most favourable credit assessments shall be used. If the two most favourable assessments are different, the least favourable of the two shall be used.

Or. en

Justification

This requirement may have the unintended consequence of reducing the competitive landscape of the ECAI market. Competition adds depth to market expertise and helps enhance best practice standards. The use of different ECAIs for different tranches should not be construed as evidence of cherry picking, rather reflective of the economics of transactions, the dynamic nature of the securitisation market and differentiated expertise of ECAIs.



11. A credit institution may apply the weighted-average risk weight that would be applied to the securitised exposures Articles 78 to 83 by a credit institution holding the exposures multiplied by a concentration ratio. This concentration ratio is equal to the sum of the nominal amounts of all the tranches divided by the sum of the nominal amounts of the tranches junior to or pari passu with the tranche in which the position is held including that tranche itself. The resulting risk weight shall not be higher than 1250% or lower than any risk weight applicable to a rated more senior tranche. Where the credit institution is unable to determine the risk weights that would be applied to the securitised exposures under

11. A credit institution may apply the weighted-average risk weight that would be applied to the securitised exposures Articles 78 to 83 by a credit institution holding the exposures multiplied by a concentration ratio. This concentration ratio is equal to the sum of the nominal amounts of all the tranches divided by the sum of the nominal amounts of the tranches junior to or pari passu with the tranche in which the position is held including that tranche itself. The resulting risk weight shall not be higher than 1250% or lower than any risk weight applicable to a rated more senior tranche. Where the credit institution is unable to determine the risk weights that would be applied to the securitised exposures under


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Articles 78 to 83, it shall apply a risk weight of 1250% to the position.

Articles 78 to 83, it shall apply a risk weight of 1250% to the position. A credit institution will apply to the super senior tranches of synthetic securitisation exposures, the same risk weight as that of the most senior tranche position.

Or. en

Justification

As regards the use of the look-through approach for unrated super senior tranches, we consider the application of an average risk weight for the underlying exposures (multiplied, moreover, by a concentration coefficient) to be highly penalising. Ordinarily this tranche has higher seniority than AAArated tranches. Such a rule introduces a disincentive for a bank using the Standardized Approach to purchase a super senior tranche. Further, the super senior tranche, which is highly subordinated, is contained within the AAA tranche, and tranching is effected strictly for the marketing convenience of the originator. That means that formally the risk is actually within the AAA tranche. This super senior tranche is not given a because it is pointless to assign a rating to a class that has a higher rank than the AAA tranche). There would have to be a problem visible in the more junior tranches before there could ever be something wrong in the AAA+ tranche. Therefore, the same risk weighting should be applied to both.



16. To determine its exposure value, a conversion figure of 0% may be applied to the nominal amount of a liquidity facility that is unconditionally cancellable provided that the conditions set out at paragraph 14 are satisfied and that repayment of draws on the facility are senior to any other claims on the cash flows arising from the securitised exposures.

16. To determine its exposure value, a conversion figure of 0% may be applied to the nominal amount of a liquidity facility that is unconditionally cancellable provided that repayment of draws on the facility are senior to any other claims on the cash flows arising from the securitised exposures.

Or. en

Justification

The Commission proposal requires cash advance facilities to meet all the requirements of eligible liquidity facilities. This will cause many cash advance facilities to be ineligible; it is super-equivalent to paragraph 582 of the Basel Framework and creates an un-level playing


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field.



20. For these purposes, ‘originator’s interest’ means the nominal amount of that notional part of a pool of drawn amounts sold into a securitisation, the proportion of which in relation to the amount of the total pool sold into the structure determines the proportion of the cashflows generated by principal and interest collections and other associated amounts which are not available to make payments to those having securitisation positions in the securitisation.

20. For these purposes, ‘originator’s interest’ means the exposure value of that notional part of a pool of drawn amounts sold into a securitisation, the proportion of which in relation to the amount of the total pool sold into the structure determines the proportion of the cashflows generated by principal and interest collections and other associated amounts which are not available to make payments to those having securitisation positions in the securitisation.

To qualify as such the originator’s interest may not be subordinate to the investors’ interest.

To qualify as such the originator’s interest may not be subordinate to the investors’ interest.

‘Investors’ interest’ means the nominal amount of the remaining notional part of the pool of drawn amounts.

‘Investors’ interest’ means the exposure value of the remaining notional part of the pool of drawn amounts.

Or. en

Justification

Alignment with amendment of Annex IX, part 4, para 68


Amendment 795Annex IX, part 4, paragraph 22, point (a)

(a) Securitisations of revolving exposures whereby investors remain fully exposed to all future draws by borrowers so that the risk on the underlying facilities does not return to the originator credit institution even after an early amortisation event has occurred are exempt from the early amortisation

(a) Securitisations of revolving exposures whereby investors remain fully exposed to all future draws by borrowers so that the risk on the underlying facilities does not return to the originator credit institution even after an early amortisation event has occurred, and


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treatment, and

Or. en

Justification



Amendment 796Annex IX, part 4, paragraph 26, point (b)

(b) Throughout the duration of the transaction there is pro-rata sharing between the originator’s interest and the investor’s interest of payments of interest and principal, expenses, losses and recoveries based on the beginning of the month balance of receivables outstanding.

(b) Throughout the duration of the transaction there is pro-rata sharing between the originator’s interest and the investor’s interest of payments of interest and principal, expenses, losses and recoveries based on the balance of receivables outstanding at one or more reference points during each month.

Or. en

Justification

Sharing between originator and investor is based on the balance of receivables outstanding each month, but not necessarily at the beginning of each month. The proposed change is more in line with general market practice.



36. For the purposes of Article 96, the risk-weighted exposure amount of a securitisation positions shall be calculated in accordance with paragraphs 36 to 74.

36. For the purposes of Article 96, the risk-weighted exposure amount of a securitisation positions shall be calculated in accordance with paragraphs 37 to 74.

Or. en


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Justification



Amendment 798Annex IX, part 4, paragraph 42, point (d)

(d) In developing its internal assessment methodology the credit institution shall take into consideration all published ratings methodologies of eligible ECAIs for the rating of securities backed by the exposures of the type securitised. This consideration shall be documented by the credit institution and updated at least once a year.

(d) In developing its internal assessment methodology the credit institution shall take into consideration relevant published ratings methodologies of the eligible ECAIs that rate the commercial paper of the ABCP programme. This consideration shall be documented by the credit institution and updated regularly, as outlined in paragraph 42(g).

Or. en

Justification

It would be virtually impossible to take “all” ratings methodologies into consideration in the development of an internal assessment methodology. At the very least it should be limited to ECAIs that rate the ABCP programme’s commercial paper.


Amendment 799Annex IX, part 4, paragraph 45, subparagraph 1 a (new) (after Table 5)

Once new empirical data become available the risk weight associated with the credit quality step must be recalibrated and changed accordingly in the tables 4 and 5 .

Or. en

Justification

The risk weight in tables 4 and 5 have been calibrated against US high yield bond spreads, which has no connection with securitised asset transactions. Therefore once EU competent authorities have more empirical evidence on history of securitised asset the risk weight must be recalibrated and reinserted in the annex.


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46. Subject to paragraph 47, the risk weights in column A of each table shall be applied where the position is in the most senior tranche of a securitisation. When determining whether a tranche is the most senior for these purposes, it is not required take into consideration amounts due under interest rate or currency derivative contracts, fees due, or other similar payments.

46. Subject to paragraphs 46a and 47, the risk weights in column A of each table shall be applied where the position is in the most senior tranche of a securitisation. When determining whether a tranche is the most senior for these purposes, it is not required take into consideration amounts due under interest rate or currency derivative contracts, fees due, or other similar payments.

Or. en


Amendment 801Annex IX, part 4, paragraph 46 a (new)

46a. A risk weight of 1% may be applie to a position which is a position in the most senior tranche of a securitisation and that tranche is senior in all respects to another tranche of the securitised positions which would receive a risk weight of 7% under paragraph 45, provided that:

(a) the competent authority is satisfied that this is justified due to the loss absorption qualities of subordinate tranches in the securitisation; and

(b) either the position has an external credit assessment which has been determined to be associated with credit quality step 1 in Table 4 or 5 or, if it is unrated, requirements (a) to (c) in paragraph 41 are satisfied where ‘reference positions’ are taken to mean positions in the subordinate tranche which would receive a risk weight of 7% under paragraph 45.

Or. en


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Justification

The current proposed risk weight floor of 7% is not consistent with the level of risk taken and it is penalising securitisation against other types of position with the same risk profile. The suggested paragraph 46A is the same as agreed by ECOFIN, except for the risk weight. Calculations made by major European banks indicate that a risk weight lower than 1% is appropriate for super senior tranches in synthetic securitisations.



54. A conversion figure of 20% may be applied to the nominal amount of a liquidity facility that may only be drawn in the event of a general market disruption and that meets the conditions to be an ‘eligible liquidity facility’ set out in paragraph 14.


Or. en

Justification

By applying a higher conversion factor under IRB/SF than under the standardised approach, the directive will discourage the adoption or the evolution towards the most sophisticated risk management methods. A zero % should also apply to the most advanced approaches as it applies to the standardised approach. It will re-establish the incentive to evolve towards the most sophisticated approaches.





Or. en


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Justification

BBy applying a higher conversion factor under IRB/SF than under the standardised approach, the directive will discourage the adoption or the evolution towards the most sophisticated risk management methods.

A zero % should also apply to the most advanced approaches as it applies to the standardised approach. It will re-establish the incentive to evolve towards the most sophisticated approaches.



57. The highest risk weight that would be applied under Articles 78 to 83 to any of the securitised exposures had they not been securitised may be applied to the securitisation position represented by the liquidity facility. To determine the exposure value of the position a conversion figure of 50% may be applied to the nominal amount of the liquidity facility if the facility has an original maturity of one year or less. If the liquidity facility complies with the conditions in paragraph 54 a conversion figure of 20% may be applied.

57. The average risk weight that would be applied under Articles 78 to 83 to any of the securitised exposures had they not been securitised may be applied to the securitisation position represented by the liquidity facility. To determine the exposure value of the position a conversion figure of 50% may be applied to the nominal amount of the liquidity facility if the facility has an original maturity of one year or less. If the liquidity facility complies with the conditions in paragraph 54 a conversion figure of 20% may be applied.

Or. en

Justification

The highest risk is not representative of the real risk. The average risk is a better reflection of the diversification of the portfolio.



57. The highest risk weight that would be applied under Articles 78 to 83 to any of the securitised exposures had they not been securitised may be applied to the

57. The average risk weight that would be applied under Articles 78 to 83 to any of the securitised exposures had they not been securitised may be applied to the


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securitisation position represented by the liquidity facility. To determine the exposure value of the position a conversion figure of 50% may be applied to the nominal amount of the liquidity facility if the facility has an original maturity of one year or less. If the liquidity facility complies with the conditions in paragraph 54 a conversion figure of 20% may be applied.

securitisation position represented by the liquidity facility. To determine the exposure value of the position a conversion figure of 50% may be applied to the nominal amount of the liquidity facility if the facility has an original maturity of one year or less. If the liquidity facility complies with the conditions in paragraph 54 a conversion figure of 20% may be applied.

Or. en

Justification

The highest risk is not representative of the real risk. The average risk is a better reflection of the diversification of the portfolio.


Amendment 806Annex IX, part 4, paragraph 68, subparagraph 1, point (a)

(a) the nominal amount of that notional part of a pool of drawn amounts sold into a securitisation, the proportion of which in relation to the amount of the total pool sold into the structure determines the proportion of the cashflows generated by principal and interest collections and other associated amounts which are not available to make payments to those having securitisation positions in the securitisation; plus

(a) the exposure value of that notional part of a pool of drawn amounts sold into a securitisation, the proportion of which in relation to the amount of the total pool sold into the structure determines the proportion of the cashflows generated by principal and interest collections and other associated amounts which are not available to make payments to those having securitisation positions in the securitisation; plus

Or. en

Justification

Würde hier bezüglich nicht gezogener Beträge, wie im Kommissionsvorschlag vorgesehen, auf den Nennwert abgezielt, führte dies im Vergleich zu dem in Basel vorgeschlagenen Text zu einer nicht gerechtfertigten erhöhten Kapitalanforderung, da man die Umrechnungsfaktoren gemäß Anhang VII, Teil 3, Nummer 11 nicht berücksichtigen würde. Dies kann verhindert werden, indem nicht auf den Nennwert, sondern auf den Forderungswert (entspricht dem Exposure at Default in der Baseler Rahmenvereinbarung) abstellt wird, der auch eventuelle Umrechnungsfaktoren berücksichtigt.


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Amendment 807Annex IX, part 4, paragraph 68, subparagraph 1, point (b)

(b) the nominal amount of that part of the pool of undrawn amounts of the credit lines, the drawn amounts of which have been sold into the securitisation, the proportion of which to the total amount of such undrawn amounts is the same as the proportion of the nominal amount described in point (a) to the nominal amount of the pool of drawn amounts sold into the securitisation.

(b) the exposure value of that part of the pool of undrawn amounts of the credit lines, the drawn amounts of which have been sold into the securitisation, the proportion of which to the total amount of such undrawn amounts is the same as the proportion of the exposure value described in point (a) to the exposure value of the pool of drawn amounts sold into the securitisation.

Or. en

Justification

See justification to amendment to paragraph 68, subparagr. 1, point (a) by A. Radwan.


Amendment 808Annex IX, part 4, paragraph 68, subparagraph 3

“Investors’ interest” means the nominal amount of the notional part of the pool of drawn amounts not falling within point (a) plus the nominal amount of that part of the pool of undrawn amounts of credit lines, the drawn amounts of which have been sold into the securtisation, not falling within point (b).

“Investors’ interest” means the exposure value of the notional part of the pool of drawn amounts not falling within point (a) plus the exposure value of that part of the pool of undrawn amounts of credit lines, the drawn amounts of which have been sold into the securitisation, not falling within point (b).

Or. en

Justification

See justification to amendment to paragraph 68, subparagr. 1, point (a) by A. Radwan.


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73. For the purposes of paragraph 73 73. For the purposes of paragraph 72

Or. en

Justification



Amendment 810Annex X, part 1, paragraph 1 a (new)

1a. For undertakings according to Article 3 (t) of the Directive [93/6/EC], the capital requirement for operational risk is equal to 12% of the relevant indicator defined below.

Or. en

Justification

The additional requirements for the backing of operational risk for financial service providers in the energy market present a substantial financial burden. Therefore, the factors for operational risk should be kept on a lower level, in order not to de facto nullify any own funds mitigations which might have been realised otherwise.


Amendment 811Annex X, part 2, paragraph 1

1. Under the Standardised Approach, the capital requirement for operational risk is the simple sum of the capital requirements calculated for each of the business lines in table 2.

1. Under the Standardised Approach, the capital requirement for operational risk is the simple sum of the capital requirements calculated for each of the business lines in table 2. In each year, a negative capital


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requirement in one business line, resulting from a negative gross yield, may be imputed to the whole. However, where the aggregate capital charge across all business lines within a given year is negative, then the input to the numerator for that year shall be zero .

Or. en

Justification




1. Under the Standardised Approach, the capital requirement for operational risk is the simple sum of the capital requirements calculated for each of the business lines in table 2 .

1. Under the Standardised Approach, the capital requirement for operational risk is calculated by adding together the annual capital requirement of each individual business line in Table 2. Every year, negative capital requirements resulting from negative gross income in a particular business line may be offset. If the total annual capital requirements result in a negative amount, this amount is set at zero.

Or. en

Justification

The intention of the original proposal was to allow gross income to be offset in line with the Basel rules. However, the Commission’s proposed text will not produce the desired result. It must be clarified that where the offsetting results in a negative capital requirement, it must be clear that the capital requirement will be set to zero.



1. Under the Standardised Approach, the 1. Under the Standardised Approach, the


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capital requirement for operational risk is the simple sum of the capital requirements calculated for each of the business lines in table 2 .

capital requirement for operational risk is the simple sum of the capital requirements calculated for each if the business lines in table 2. Thereby negative capital charges in any business line may offset positive charges in other business lines without limit.

Or. en

Justification

It is not sufficiently clear whether the possibility, provided for in the New Basel Capital Accord, to offset positive capital charges from one business line by negative charges in other business lines has been taken up in the Commission's proposal. In order to avoid difficulties in interpretation, the Basel formulation should be used. The inability to offset positive by negative capital charges would reduce the credit institutions’ incentives to apply the Standardised Approach and would also put credit institutions located in the EU at a competitive disadvantage vis-à-vis their global competitors.



4. For each business line, the relevant indicator is the average over three years of the sum of net interest income, and annual net non-interest income, as defined in part 1, paragraphs 5 to 9.

4. For each business line, the relevant indicator is the average over three years of the sum of net interest income, and net non-interest income, as defined in part 1, paragraphs 5 to 9.

Or. en

Justification




If for any given observation the sum of net deleted


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interest income and net non-interest income is negative, this figure shall be assigned the value zero.

Or. en

Justification

The provision would not allow for a negative gross income in any business line. The deletion is necessary to compliment amendment of paragraph 1.


Amendment 816Annex X, part 2, paragraph 6, Table 2, column 1, row 4

Retail brokerage

(Activities with a individual physical persons or with small and medium sized entities meeting the criteria set out in Article 55 for the retail exposure class)

Retail brokerage(Activities with a individual physical persons or with small and medium sized entities meeting the criteria set out in Article 79 for the retail exposure class)

Or. en

Justification



Amendment 817Annex X, part 2, paragraph 6, Table 2, columns 1 to 3, row 10 a (new)

Energy trading

Activities that are solely in energy and energy derivatives

12%

Or. en


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Justification

See comments regarding Annex X, part 1, paragraph 1.1.



16. The credit institution is able to demonstrate to the competent authorities that the significant proportion of its retail and/or commercial banking activities comprise loans associated with high probability of default, and that the alternative standardised approach provides an improved basis for assessing the operational risk.

16. The credit institution is able to demonstrate to the competent authorities that the alternative standardised approach provides an improved basis for assessing the operational risk.

Or. en

Justification

For determination of capital cost's operational risk the Directive allows to use bank's income indicator, and - if necessary- credit volume indicator, as an alternative indicator. Application of income indicator leads unfair results for CEE-banks, but the current 16th paragraph preclude the use of alternative indicator.



11. Correlations in operational risk losses across individual operational risk estimates may be recognised only if credit institutions can demonstrate to the satisfaction of the competent authorities that their systems for measuring correlations are sound, implemented with integrity, and take into account the uncertainty surrounding any such correlation estimates, particularly in periods of stress. The credit institution must validate its correlation assumptions using appropriate quantitative and qualitative

11. Correlations between operational risks of business lines and loss event categories may be recognised if the correlations are based on suitable estimates, implemented with integrity and the process of derivation can be demonstrated.


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techniques.

Or. en

Justification

The assumption of a correlation of < 1 is essential if the AMA approach is to be economically viable and it is an integral part of the internal risk management of operational losses. In the absence of available data, however, this assumption cannot be demonstrated using conventional mathematical and statistical methods. The current wording of § 11 would require such a demonstration. This would mean that none of the AMA models now in use could be approved. As a result, a correlation of 1 would always have to be assumed. But this assumption is based on a scenario in which all the worst possible individual losses occur simultaneously in one year. This is unrealistic and not empirically verifiable. The verification system outlined above would allow the results of the model to be presented in a realistic manner.



14. Credit institutions must be able to map their historical internal loss data into the business lines defined in part 2 and into the event types defined in part 5, and to provide these data to competent authorities upon request. There must be documented, objective criteria for allocating losses to the specified business lines and event types. The operational risk losses that are related to credit risk and have historically been included in the internal credit risk databases must be recorded in the operational risk databases and be separately identified. Such losses will not be subject to the operational risk charge, as long as they continue to be treated as credit risk for the purposes of calculating minimum capital requirements. Operational risk losses that are related to market risks shall be included in the scope of the capital requirement for operational risk.

14. Credit institutions must be able to map their historical internal loss data into the business lines defined in part 2 and into the event types defined in part 5, and to provide these data to competent authorities upon request. There must be documented, objective criteria for allocating losses to the specified business lines and event types. The operational risk losses that are related to credit risk, which are material and have historically been included in the internal credit risk databases must be separately identified. Such losses will not be subject to the operational risk charge, as long as they continue to be treated as credit risk for the purposes of calculating minimum capital requirements. Operational risk losses that are related to market risks shall be included in the scope of the capital requirement for operational risk.

Or. en


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Justification

There is no need to require credit risk related losses to be entered in the operational riskdata base, where it is ignored for capital calculation. It could be a flag on the event in the credit risk data base. IT system design should be left to firms.



15. The credit institution’s internal loss data must be comprehensive in that it captures all material activities and exposures from all appropriate sub-systems and geographic locations. Credit institutions must be able to justify that any excluded activities or exposures, both individually and in combination, would not have a material impact on the overall risk estimates. An appropriate minimum loss threshold for internal loss data collection must be defined.

15. The credit institution’s internal loss data must be comprehensive in that it captures all material activities and exposures from all appropriate sub-systems and geographic locations. Credit institutions must be able to justify that any excluded activities or exposures, both individually and in combination, would not have a material impact on the overall risk estimates. Appropriate minimum loss thresholds for internal loss data collection must be defined.

Or. en

Justification

The draft proposed by the Commission only allows for a single threshold which is impractical. The approach in the Basel Framework, which allows for variable thresholds, is preferred.


Amendment 822Annex X, part 3, Title 2 (after paragraph 24)

2. Impact of insurance 2. Impact of insurance and other risk transfer mechanisms

Or. en

Justification

The management of operational risks is still a domain in rapid evolution and generally accepted best practices are still to be defined. Therefore, the title should allow for new risk


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mitigation techniques or risk transfer mechanisms.



25. Credit institutions shall be able to recognise the impact of insurance subject to the conditions set out in paragraphs 26 to 29.

25. Credit institutions shall be able to recognise the impact of insurance subject to the conditions set out in paragraphs 26 to 29 and other risk transfer mechanisms in their internal AMA model provided a noticeable risk mitigating effect is achieved.

Or. en

Justification

The management of operational risks is still a domain in rapid evolution and generally accepted best practices are still to be defined. There, overprescriptive rules will restrain a constant improvement in the risk management technique. Risk mitigation will not be limited to insurance products. For instance, financial market products will probably be created, which have a return associated to the non-materialisation of operational risks. Therefore, the title “Impact of insurance” should be amended to “Risk mitigation” or to “Impact of insurance and other risk transfer mechanisms”, and paragraph 25 should be enlarged, aiming not to inhibit market developments, and to allow new risk mitigation techniques or risk transfer mechanisms.



25. Credit institutions shall be able to recognise the impact of insurance subject to the conditions set out in paragraphs 26 to 29.

25. Credit institutions shall be able to recognise the impact of insurance set out in paragraphs 26 to 29 and other risk transfer mechanisms in their internal AMA model provided a noticeable risk mitigating effect is achieved.

Or. en

Justification

The management of operational risks is still a domain in rapid evolution and generally


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accepted best practices are still to be defined. There, overprescriptive rules will restrain a constant improvement in the risk management technique. Risk mitigation will not be limited to insurance products.



26. The provider is authorised to provide insurance and re-insurance.

deleted

Or. en

Justification




26. The provider is authorised to provide insurance or re-insurance.

26. The provider is authorised to provide insurance or re-insurance and the provider has a minimum claims paying ability rating by an eligible ECAI which has been determined by the competent authority to be associated with credit quality step 3 or above under the rules for the risk weighting of exposures to credit institutions under Articles 78 to 83.

Or. en


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Justification



Amendment 827Annex X, part 3, paragraph 27, introductory part

27. The provider has a minimum claims paying ability rating of A (or equivalent);

27. The insurance and the credit institutions' insurance framework shall meet the following conditions:

Or. en

Justification



Amendment 828Annex X, part 3, paragraph 27, point (a)

(a) The insurance policy must have an initial term of no less than one year. For policies with a residual term of less than one year, the credit institution must make residual term of the policy, up to a full 100% haircut for policies with a residual term of 90 days or less.

(a) The insurance policy must have an initial term of no less than one year. For policies with a residual term of less than one year, the credit institution must make residual term of the policy, up to a full 100% haircut for policies with a residual term of 90 days or less. The above provision shall not apply in the case of policies subjected to an automatic and irrevocable renewal at maturity.

Or. en

Justification

In respect of lower capital charges by virtue of insurance policies of more than a year’s duration, it is standard practice to renew operational risk insurance annually. Thus on any given observation date for the capital requirement, the residual life of a policy may be less than a year. For policies that are not one-off, but stipulated on a continuing basis, the provision in point a) of paragraph 27 with less than one year of residual life should not apply.


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(a) The insurance policy must have an initial term of no less than one year. For policies with a residual term of less than one year, the credit institution must make appropriate haircuts reflecting the declining residual term of the policy, up to a full 100% haircut for policies with a residual term of 90 days or less.

(a) The insurance policy must have an initial term of no less than one year. For policies with a residual term of less than one year, the credit institution must make appropriate haircuts reflecting the declining residual term of the policy, up to a full 100% haircut for policies with a residual term of 90 days or less. The above provision has not to be applied in the case of policies subjected to an automatic renewal at maturity.

Or. en

Justification

As to the possibility of a lower capital charge by virtue of insurance policies of more than a year’s duration, we would like to point out that the normal operating practice is to renew operational risk insurance annually, and their expiration dates may coincide with a variety of different renewal dates. Thus on any given observation date for the capital requirement, the residual life of a policy may be less than a year. It therefore seems illogical to pro-rate diminishing the mitigation effect simply because the policy is subject to renewal. We request, consequently, that for policies that are not one-off but stipulated on a continuing basis, the provision in the point a) of §27 on policies with less than a year of residual life should not apply.



(a) The insurance policy must have an initial term of no less than one year. For policies with a residual term of less than one year, the credit institution must make appropriate haircuts reflecting the declining residual term of the policy, up to a full 100% haircut for policies with a residual term of 90 days or less.

(a) The insurance policy must have an initial term of no less than one year. For policies with a residual term of less than one year, the credit institution must make appropriate haircuts reflecting the declining residual term of the policy, up to a full 100% haircut for policies with a residual term of 90 days or less. The above provision has not to be applied in the case of policies subjected to an automatic renewal at maturity.


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Or. enJustification



Amendment 831Annex X, part 3, paragraph 27, point (e)

(e) The insurance is provided by a third party entity. In the case of insurance through captives and affiliates, the exposure has to be laid off to an independent third party entity, for example through re-insurance, that meets the eligibility criteria.

(e) The insurance is provided by a third party entity. In the case of insurance through captives and affiliates, the exposure has to be laid off to an independent third party entity, for example through re-insurance, that meets the eligibility criteria. In the event that capital invested in the captive is deducted from the capital of the parent, then risk transfer should be recognised subject to the captive meeting the eligibility criteria;

Or. en

Justification

The Commission's wording penalises firms twice - deduction of capital in the captive and non-recognition of risk transfer.


Amendment 832Annex X, part 3, paragraph 27, point (e)

(e) The insurance is provided by a third (e) The insurance is provided by a third


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party entity. In the case of insurance through captives and affiliates, the exposure has to be laid off to an independent third party entity, for example through re-insurance, that meets the eligibility criteria.

party entity. In the case of insurance through captives and affiliates, the exposure has to be laid off to an independent third party entity, for example through re-insurance, that meets the eligibility criteria. In the event that capital invested in the captive is deducted from the capital of the parent, then risk transfer should be recognised subject to the captive meeting the eligibility criteria;

Or. en

Justification



Amendment 833Annex XI, paragraph 1, point (d a) (new)

(da) the impact of diversification effects and how such effects are factored into the risk measurement system;

Or. en

Justification

Diversification is one of the key principles in risk and portfolio management and a crucial factor for determining economic capital. Since there is no recognition of diversification effects in the calculation of regulatory capital requirements, diversification effects should be recognized within the Supervisory Review Process.


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Amendment 834Annex XI, paragraph 1, point (d a) (new)

(da) the impact of diversification effects and how such effects are factored into the risk measurement system;

Or. en

Justification

Diversification is one of the key principles in risk and portfolio management, and diversification recognition is an existing practice in market risk models, and a crucial factor for determining economic capital. Since there is no recognition of diversification effects in the calculation of regulatory capital requirements, there is a need to recognise diversification effects when evaluating regulatory capital requirements within the Supervisory Review Process (SRP).


Amendment 835Annex XII, part 1, paragraph 4

4. Competent authorities shall require credit institutions to assess the need to publish some or all disclosures more frequently than annually in the light of relevant characteristics of their business such as scale of operations, range of activities, presence in different countries, involvement in different financial sectors, and participation in international financial markets and payment, settlement and clearing systems. That assessment shall pay particular attention to the possible need for more frequent disclosure of items of information laid down in part 2, paragraphs 3(b) and 3(e), and 4(b) to 4(f), and information on risk exposure and other items prone to rapid change.

4. Competent authorities shall require credit institutions to assess the need to publish some or all disclosures more frequently than annually in the light of relevant characteristics of their business that are prone to rapid change.

Or. en


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Justification

The intention in paragraph 818 of the Basel Framework is to highlight the consideration of increased frequency of disclosure on areas prone to rapid change. Furthermore, the list of examples included in the Commission draft could be too prescriptive for a framework directive. We would prefer this to be covered, if need be, in level 3 work.


Amendment 836Annex XII, part 2, paragraph 3, point (c)

(c) the total amount of additional own funds, and own funds as defined in [Annex V of Directive 93/6/EEC];

(c) the total amount of additional own funds, and own funds as defined in [Chapter IV of Directive 93/6/EEC];

Or. en

Justification



Amendment 837Annex XII, part 2, paragraph 4, point (c) (i)

(i) each of the approaches provided in Annex VII, part 1, paragraphs 15 to 25;

(i) each of the approaches provided in Annex VII, part 1, paragraphs 15 to 24;

Or. en

Justification



Amendment 838Annex XII, part 2, paragraph 9, introductory part


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9. The following information shall be disclosed by each credit institution which calculates its capital requirements in accordance with [Annex VIII of Directive 93/6/EEC]:

9. The following information shall be disclosed by each credit institution which calculates its capital requirements in accordance with [Annex V of Directive 93/6/EEC]:

Or. en

Justification



Amendment 839Annex XII, part 3, paragraph 14, point (f)

(f) for the retail exposure class and for each of the categories as defined under (c) above, either the disclosures outlined under (e) above (if applicable, on a pooled basis), or an analysis of exposures (outstanding loans and exposure values for undrawn commitments) against a sufficient number of EL grades to allow for a meaningful differentiation of credit risk (if applicable, on a pooled basis);

(f) for the retail exposure class and for each of the categories as defined under (c)(iv) above, either the disclosures outlined under (e) above (if applicable, on a pooled basis), or an analysis of exposures (outstanding loans and exposure values for undrawn commitments) against a sufficient number of EL grades to allow for a meaningful differentiation of credit risk (if applicable, on a pooled basis);

Or. en

Justification



Amendment 840Annex XII, part 3, paragraph 14, point (g)

(g) the actual value adjustments in the preceding period for each exposure class (for retail, for each of the categories as defined under (c) above) and how this differs from past experience;

(g) the actual value adjustments in the preceding period for each exposure class (for retail, for each of the categories as defined under (c)(iv) above) and how this differs from past experience;


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Or. enJustification



Amendment 841Annex XII, part 3, paragraph 14, point (i)

(i) the credit institution’s estimates against actual outcomes over a longer period. At a minimum, this shall include information on estimates of losses against actual losses in each exposure class (for retail, for each of the categories as defined under (c) above) over a period sufficient to allow for a meaningful assessment of the performance of the internal rating processes for each exposure class (for retail for each of the categories as defined under (c) above). Where appropriate, the credit institutions shall further decompose this to provide analysis of PD and, for the credit institutions using own estimates of LGDs and/or conversion factors, LGD and conversion factor outcomes against estimates provided in the quantitative risk assessment disclosures above.

(i) the credit institution’s estimates against actual outcomes over a longer period. At a minimum, this shall include information on estimates of losses against actual losses in each exposure class (for retail, for each of the categories as defined under (c)(iv) above) over a period sufficient to allow for a meaningful assessment of the performance of the internal rating processes for each exposure class (for retail for each of the categories as defined under (c)(iv) above). Where appropriate, the credit institutions shall further decompose this to provide analysis of PD and, for the credit institutions using own estimates of LGDs and/or conversion factors, LGD and conversion factor outcomes against estimates provided in the quantitative risk assessment disclosures above.

Or. en

Justification



Amendment 842Annex XIV, Correlation Table

Text proposed by the Commission

This Directive

Directive 2000/12/EC




Directive 2004/xx/EC

Article 1 Article 2(1)


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and (2)Article 2(1) Article 2(3)

Act of Accession

Article 2(2) Article 2(4)Article 3 Article 2(5)

and (6)Article 3 (1) final sentence

Article 3.2

Article 4.1 (1)

Article 1(1)

Article 4.1 (2) to (5)

Article 1(2) to (5)

Article 4.1 (7) to (9)

Article 1(6) to (8)

Article 4 .1 (10)

Article 29.1 (a)

Article 4.1 (11) to (14)

Article 1 (10), (12) and (13)

Article 4.1 (21) and (22)

Article 29.1 (b)

Article 4.1 (23)

Article 1 (23)

Article 4.1 (45) to (47)

Article 1 (25) to (27)

Article 4 .2 Article 1(1) second sub-paragraph

Article 5 Article 3Article 6 Article 4Article 7 Article 8Article 8 Article 9Article 9 (1) Article 5(1)

and 1(11)Article 9 (2) Article 5(2)Article 10 Article 5 (3)

to (7)Article 11 Article 6Article 12 Article 7Article 13 Article 10Article 14 Article 11Article 15 (1) Article 12Article 15 (2) and (3)

Article 29.2

Article 16 Article 13Article 17 Article 14Article 18 Article 15


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Article 19 (1) Article 16 (1)

Article 19 (2) Article 29.3Article 20 Article

16(3)Article 21 Article 16

(4) to (6)Article 22 Article 17Article 23 Article 18Article 24 (1) Article 19

paragraphs (1) to (3)

Article 24 (2) Article 19 paragraph (6)



Article 20 (1) to (3) 1 and 2 sub-paragraph


Article 25 (4) Article 20 (3) 3 sub-paragraph

Article 26 Article 20 (4) to (7)

Article 27 Article 1 (3) final clause


(2) to (4)Article 31 Article 22

(5)Article 32 Article 22





(10)


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Article 37 Article 22 (11)

Article 38 Article 24Article 39 (1) and (2)

Article 25

Article 39 (2) Article 3.8Article 40 Article 26Article 41 Article 27Article 42 Article 28Article 43 Article 29Article 44 Article

30(1) to (3)Article 45 Article

30(4)Article 46 Article



30(6) and (7)


Article 50 Article 30(9) 1 and 2 paragraphs

Article 51 Article 30(9) 3 paragraph


Article 53 Article 31Article 54 Article 32Article 55 Article 33Article 56 Article


34(2) 1 paragraphArticle 34(1) point 2 final sentence

Article 29.4(a)

Article 58 Article 29.4 (b)



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Article 61 Article 34(3) and (4)

Article 63 Article 35Article 64 Article 36Article 65 Article 37Article 66 (1) and (2)

Article 38 (1) and (2)

Article 67 Article 39Article 73 Article


1(24)Article 107 Article 1(1)

3 sub-paragraph


Article 109 Article 48 (4) 1 paragraph

Article 110 Article 48(2) to (4)2 sub-paragraph



Article 49 (4) (6) and (7)


Article 49(8) and (9)




51(1)(2)(5)Article 121 Article

51(4)Article 122 (1) and (2)

Art. 51 (6) Article 29(5)

Article 125 Article 53(1) and


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(3)Article 128 Article

53(5)Article 133 (1)

Article 54(1)

Article 29(7)(a)



Article 134(1)

Article 54(4) first paragraph

Article 134 (2)

Article 54(4) second paragraph




Article 139 Article 56(1) to (3)



Article 29(10)



Art. 3.10



Art. 3.10

Article 158 Art. 67Article 159 Art. 68Article 160 Article 69Annex I Annex IAnnex I final clause

Article 68

Annex II Annex IIAnnex III Annex IIIAnnex IV Annex IV


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Amendment by Parliament

This Directive





Directive 2004/xx/EC


Article 2 Article 2(3)Act of Accession

Article 2 Article 2(4)Article 3 Article 2(5)

and (6)Article 3 (1) final sentence

Article 3.2

Article 4 (1) Article 1(1)Article 4 (2) to (5)

Article 1(2) to (5)


Article 1(6) to (8)

Article 4 (10) Article 29.1 (a)


Article 1 (10), (12) and (13)


Article 29.1 (b)

Article 4 (23) Article 1 (23)



deleted deletedArticle 5Article 6 Article 4Article 7 Article 8Article 8 Article 3Article 9 (1) Article 5(1)

and 1(11)Article 9 (2) Article 5(2)Article 10 Article 5 (3)

to (7)Article 11 Article 6Article 12 Article 7Article 13 Article 10Article 14 Article 11Article 15 (1) Article 12Article 15 (2) and (3)

Article 29.2

Article 16 Article 13


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Article 17 Article 14Article 18 Article 15Article 19 (1) Article 16

(1)Article 19 (2) Article 29.3Article 20 Article

16(3)Article 21 Article 16

(4) to (6)Article 22 Article 17Article 23 Article 18Article 24 (1) Article 19

paragraphs (1) to (3)




Article 20 (1) to (3) 1 and 2 sub-paragraph


Article 25 (4) Article 20 (3) 3 sub-paragraph


Article 27 Article 1 (3) final clause


(2) to (4)Article 31 Article 22





(9)


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Article 38 Article 24Article 39 (1) and (2)

Article 25

Article 39 (2) Article 3.8Article 40 Article 26Article 41 Article 27Article 42 Article 28Article 43 Article 29Article 44 Article

30(1) to (3)Article 45 Article




30(6) and (7)


Article 50 Article 30(9) 1 and 2 paragraphs

Article 51 Article 30(9) 3 paragraph


Article 53 Article 31Article 54 Article 32Article 55 Article 33Article 56 Article


34(2) 1 paragraphArticle 34(2) point 2 final sentence

Article 29.4(a)



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Article 63 Article 35Article 64 Article 36Article 65 Article 37Article 66 (1) and (2)




1(24)Article 107 Article 1(1)

3 sub-paragraph


Article 109 Article 48 (4) 1 paragraph

Article 110 Article 48(2) to (4)2 sub-paragraph



Article 49 (4) (6) and (7)


Article 49(8) and (9)




51(1)(2)(5)Article 121 Article

51(4)Article 122 (1) and (2)

Art. 51 (6) Article 29(5)


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Article 133 (1)

Article 54(1)

Article 29(7)(a)



Article 134(1)

Article 54(4) first paragraph

Article 134 (2)

Article 54(4) second paragraph







Article 29(10)



Art. 3.10



Art. 3.10

Article 158 Art. 67Article 159 Art. 68Article 160 Article 69Annex I Annex IAnnex I final clause

Article 68

Annex II Annex IIAnnex III Annex IIIAnnex IV Annex IV


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Or. en


Recast of Directive 93/6/EEC

Text proposed by the Commission Amendments by Parliament



1. This directive lays down the capital adequacy requirements applying to investment firms and credit institutions, the rules for their calculation and the rules for their prudential supervision. Member States shall apply the requirements of this Directive to investment firms and credit institutions as defined in Article 2.

1. This directive lays down the capital adequacy requirements applying to investment firms and credit institutions, the rules for their calculation and the rules for their prudential supervision. Member States shall apply the requirements of this Directive to investment firms and credit institutions as defined in Article 3.

Or. en

Justification



Amendment 844Article 3, paragraph 1, point (s a) (new)

(sa) energy institution means an investment firm whose main business is in transactions regarding investment services or investment advice related to the financial instruments set out in Annex I Section C points 5, 6, 7,


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9 and 10 of Directive 2004/39/EC.

Or. en

Justification

The introduction of the term „energy institution“ is appropriate in order to take the specific regulations into account that are relevant for the energy market.


Amendment 845Article 3, paragraph 1, point (s b) (new)

(sb) Commodities means commodities as defined in [article xx of Directive 2005/yy/EC (Implementation Directive) according to the comitology procedure set out in article 4 (1), point 2 of Directive 2004/39/EC].

Or. en

Justification

Currently, the proposals for the Directives 93/6/EC and 2000/12/EC do not provide a definition for commodities. For consistency reasons it is important to guarantee that the relevant definition as set out in Directive 2004/39/EC will also be applied in the Directives 93/6/EC and 2000/12/EC.


Amendment 846Article 3, paragraph 1, point (s c) (new)

(sc) Commodity derivatives mean derivative contracts related to the financial instruments set out in Annex I Section C points 5, 6, 7, 9 and 10 of Directive 2004/39/EC.

Or. en


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Justification

Currently, the proposals for the Directives 93/6/EC and 2000/12/EC do not provide a definition for commodities. For consistency reasons it is important to guarantee that the relevant definition as set out in Directive 2004/39/EC will also be applied in the Directives 93/6/EC and 2000/12/EC.



Illiquid assets as referred to in point (d) of Article 12(2) shall include the following:

Illiquid assets as referred to in point (d) of Article 13(2) shall include the following:

Or. en

Justification



Amendment 848Article 15, subparagraph 1, point (b)

(b) holdings in, including subordinated claims on, credit or financial institutions which may be included in the own funds of those institutions, unless they have been deducted under points (l) to (p) of Article 57 of Directive [2000/12/EC] or under Article 15(d) of this Directive;

(b) holdings in, including subordinated claims on, credit or financial institutions which may be included in the own funds of those institutions, unless they have been deducted under points (l) to (p) of Article 57 of Directive [2000/12/EC] or under Article 16(d) of this Directive;

Or. en

Justification



Amendment 849Article 15, subparagraph 1, point (g)


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(g) physical stocks, unless they are already subject to capital requirements at least as stringent as those set out in Articles 18 to 20.

(g) physical stocks, unless they are already subject to capital requirements at least as stringent as those set out in Articles 18 and 20.

Or. en

Justification



Amendment 850Article 16, point (b)

(b) the exclusion referred to in point (a) of Article 12(2) shall not cover those components of points (l) to (p) of Article 57 of Directive [2000/12/EC] which an investment firm holds in respect of undertakings included in the scope of consolidation as defined in Article 2 (1) of this Directive;

(b) the exclusion referred to in point (a) of Article 13(2) shall not cover those components of points (l) to (p) of Article 57 of Directive [2000/12/EC] which an investment firm holds in respect of undertakings included in the scope of consolidation as defined in Article 2 (1) of this Directive;

Or. en

Justification




1. Subject to paragraphs 2, 3 and 4 of this Article, and Article 34 of this Directive, the requirements in Article 75 of Directive [2000/12/EC] shall apply to investment firms.

1. Subject to paragraphs 2, 3, 3a and 4 of this Article, and Article 34 of this Directive, the requirements in Article 75 of Directive [2000/12/EC] shall apply to investment firms.

Or. en


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Justification

To include reference to new paragraph 3a.



3a. By derogation to paragraph 1, competent authorities may apply the requirements in Article 75 of Directive [2000/12/EC] to investment firms so the capital requirement contained in point (d) of Article 75 of Directive [2000/12/EC] does not exceed 12/88 parts of the sum of the capital requirements contained in points (a) to (c) of Article 75.

Or. en

Justification

The proposition aims at ensuring the maximum the capital requirement may go up is linked to the Basle calibration.



4. Investment firms referred to in paragraphs 2 and 3 shall remain subject to all other provisions regarding operational risk set out in Annex V of Directive [2000/12/EC].

4. Investment firms referred to in paragraphs 2, 3 and 3a shall remain subject to all other provisions regarding operational risk set out in Annex V of Directive [2000/12/EC].

Or. en

Justification

To include reference to new paragraph 3a.


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2. Par dérogation au paragraphe 1, les autorités compétentes peuvent autoriser toute compagnie financière qui est l'entreprise mère d'une entreprise d'investissement appartenant à un tel groupe d'utiliser une valeur inférieure à celle calculée en application du paragraphe 1, point d), mais en aucun cas inférieure à la somme des exigences imposées sur une base individuelle par les articles 18 et 20 aux entreprises d'investissement, établissements financiers, sociétés de gestion de portefeuille et entreprises de services auxiliaires, qui seraient consolidés dans d'autres circonstances, et du total des passifs éventuels envers des entreprises d'investissement, des établissements financiers, des sociétés de gestion de portefeuille ou des entreprises de services auxiliaires, qui seraient consolidés dans d'autres circonstances. Aux fins du présent paragraphe, l'exigence de fonds propres imposée aux établissements financiers, sociétés de gestion de portefeuille et entreprises de services auxiliaires est une exigence notionnelle.

2. Par dérogation au paragraphe 1, les autorités compétentes peuvent autoriser toute compagnie financière qui est l'entreprise mère d'une entreprise d'investissement d'un tel groupe à utiliser une valeur inférieure à celle calculée en application du paragraphe 1, point d), mais en aucun cas inférieure à la somme des exigences imposées sur une base individuelle par les articles 18 et 20 aux entreprises d'investissement, établissements financiers, sociétés de gestion de portefeuille et entreprises de services auxiliaires, qui seraient sans cela consolidés, et du total des engagements éventuels envers des entreprises d'investissement, des établissements financiers, des sociétés de gestion de portefeuille ou des entreprises de services auxiliaires, qui seraient sans cela consolidés dans d'autres circonstances. Aux fins du présent paragraphe, les entreprises d'investissement de pays tiers, les établissements financiers, les sociétés de gestion de portefeuille et les entreprises de services auxiliaires sont soumis à une exigence de fonds propres notionnels.

Or. fr

Justification

Translation error in the French version. See last sentences: ...... les entreprises d'investissement de pays tiers, ...



In addition, they may allow foreign-exchange positions in one institution to offset foreign-exchange positions in another

In addition, they may allow foreign-exchange positions in one institution to offset foreign-exchange positions in another


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institution in accordance with the rules set out in Annex III and/or Annex V. They may also allow commodities positions in one institution to offset commodities positions in another institution in accordance with the rules set out in Annex IV and/or Annex V.

institution in accordance with the rules set out in Annex III and/or Annex V. They may also allow commodities or commodity derivatives positions in one institution to offset commodities or commodity derivatives positions in another institution in accordance with the rules set out in Annex IV and/or Annex V.

Or. en

Justification

Institutions that are part of a group of institutions are generally obliged to fulfil the capital requirements on a consolidated basis. However, according to article 22 of the Directive [93/6/EC], the competent authorities may waive the application of this capital requirement. In this case it is important that commodities or commodity derivatives positions in one institution are eligible to offset commodities or commodity derivatives positions in another institution; this avoids an unequal treatment of commodities/commodity derivatives in respect to the netting possibility of positions.



Other than in relation to repurchase transactions, securities or commodities lending or borrowing transactions, the calculation of large exposures to clients and groups of connected clients for reporting purposes shall not include the recognition of credit risk mitigation.

Other than in relation to repurchase transactions, securities or commodities lending or borrowing transactions, the reporting of large exposures to clients and groups of connected clients should be submitted gross and net of credit risk mitigation.

Or. en

Justification

The requirement to report trading book exposures at their exposure gross exposure value is an excessively costly burden to be placed upon firms. As CRM techniques will be eligible to be used in mitigation of large exposures in the Trading Book (in keeping with the treatment for the non trading book exposures) there is already a requirement that will ensure appropriate monitoring of exposures against the limits established in the large exposure regime.


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4. By derogation to paragraph 3 competent authorities may allow assets constituting claims and other exposures on recognised third-country investment firms and recognised clearing houses and exchanges in financial instruments to be subject to the same treatment accorded to those on institutions laid out in Articles 113(2)(i), 115(2) and 116 of Directive [2000/12/EC].

4. By derogation to paragraph 3 competent authorities may allow assets constituting claims and other exposures on recognised third-country investment firms and recognised clearing houses and exchanges in financial instruments to be subject to the same treatment accorded to those on institutions laid out in Articles 113(3)(i), 115(2) and 116 of Directive [2000/12/EC].

Or. en

Justification



Amendment 858Article 31, subparagraph 1, introductory part

The competent authorities may authorize the limits laid down in Article Articles 111 to 117 of Directive [2000/12/EC] to be exceeded if the following conditions are met:

The competent authorities may authorize the limits laid down in Article Articles 111 to 117 of Directive [2000/12/EC] to be exceeded if either the conditions (a) to (e) are met or the condition (ea) is met:

Or. en

Justification

For consistency reasons, it is appropriate to also include in this section the additional possibility to exempt institutions from large exposure requirements, as proposed in the draft report of the Rapporteur in the new article 45a of the Directive 93/6/EC.


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Amendment 859Article 31, subparagraph 1, point (e a) (new)

(ea) the conditions of Article 45a are met.

Or. en

Justification

For consistency reasons, it is appropriate to also include in this section the additional possibility to exempt institutions from large exposure requirements, as proposed in the draft report of the Rapporteur in the new article 45a of the Directive 93/6/EC.



1. Die Artikel 124 bis 132, 136 und 144 der Richtlinie [2000/12/EG] gelten mutatis mutandis für die Beaufsichtigung von Wertpapierfirmen in Übereinstimmung mit dem nachfolgend Gesagten:

1. Titel V Kapitel 4 der Richtlinie [2000/12/EG] gilt mutatis mutandis für die Beaufsichtigung von Wertpapierfirmen in Übereinstimmung mit dem nachfolgend Gesagten:

Or. en

Justification

Cross reference error in the German version of the draft report. The English translation already anticipated the mistake. Therefore, no change in the English version is needed.



Where an EU parent financial holding company has as subsidiary both a credit institution and an investment firm, one competent authority responsible for supervision of the credit institution shall be identified to be responsible for consolidated

If a group has both investment firms and credit institutions, Title V, Chapter 4 of Directive [2000/12/EC] shall apply to the supervision of institutions as if references to credit institutions were institutions.


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supervision of the entities controlled by that parent.

Or. en

Justification

The Commission text would require a consolidated group with a financial holding company parent to be subject to lead regulation by the supervisor of the bank within a group irrespective of the overall composition of the financial group. The automatic primacy of the banking regulator neglects the fact that in some groups the overwhelming balance of business will be towards the investment firms. It is inappropriate for this outcome to be applied automatically.

In keeping with the principle of the Financial Conglomerates Directive [2002/87/EC] the regulations for consolidation and the allocation of responsibility for consolidated supervision to the competent authority should reflect the composition of the group on a case by case basis where a financial holding company has both a credit institution and investment firm as subsidiaries.



Where an EU parent financial holding company has as subsidiary both a credit institution and an investment firm, one competent authority responsible for supervision of the credit institution shall be identified to be responsible for consolidated supervision of the entities controlled by that parent.

If a group has both investment firms and credit institutions, Title V, Chapter 4 of Directive [2000/12/EC] shall apply to the supervision of institutions as if references to credit institutions were institutions.

Or. en

Justification

The Commission text would require a consolidated group with a financial holding company parent to be subject to lead regulation by the supervisor of the bank within a group irrespective of the overall composition of the financial group. The automatic primacy of the banking regulator neglects the fact that in some groups the overwhelming balance of business will be towards the investment firms. It is inappropriate for this outcome to be applied automatically.


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Hat eine EU-Mutterfinanzholdinggesellschaft sowohl ein Kreditinstitut als auch eine Wertpapierfirma zur Tochter, so wird eine für die Überwachung des Kreditinstituts zuständige Behörde als für die Beaufsichtigung auf konsolidierter Basis der von dieser Muttergesellschaft kontrollierten Institute zuständig benannt.

Wenn es in einem Konzern fast ausschließlich Wertpapierfirmen und nur vereinzelt Kreditinstitute gibt, ist Titel V, Kapitel 4 der Richtlinie 2002/12/EG für die Beaufsichtigung von Instituten so anwendbar, als ob Bezugnahmen auf Kreditinstitute Bezugnahmen auf Institute wären.

Or. de

Justification

Bei manchen Konzernen fällt der weit überwiegende Teil des Geschäfts auf Wertpapierfirmen und nur ein kleiner Teil auf Kreditinstitute. Es ist daher nicht sinnvoll, dass ein Konzern mit einer Finanzholding als Mutter unabhängig von der Gesamtzusammenschau des Konzerns der Hauptaufsicht durch die Aufsichtsbehörde der Bank innerhalb des Konzerns unterliegt.


Amendment 864Article 45 a (new)

Article 45a

1. Competent authorities may permit investment firms to exceed the limits concerning large exposures in Article 111 of Directive [2000/12/EC]. Any excesses need not be included by the investment firms in their calculation of capital requirements exceeding such limits, as set out in Article 75(b) of Directive [2000/12/EC]. This discretion is available until 31 December 2010 or the date of coming into force of any modifications consequent on the treatment of large exposures, pursuant to Article 119 of Directive [2000/12/EC], whichever is the earlier. For this discretion to be exercised, the following conditions, (a) to (d) or


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condition (e) only, must be met:

(a) the investment firm provides investment services or investment activities related to the financial instruments listed in points 5, 6, 7, 9 and 10, Section C, Annex I of Directive 2004/39 EC;

(b) the investment firm does not provide such investment services or undertake such investment activities for, or on behalf of, retail clients;

(c) breaches of the limits referred to in paragraph 1 arise in connection with exposures resulting from contracts that are financial instruments listed in point (a) and relate to commodities or underlyings within the meaning of point 10, Section C, Annex I of Directive 2004/39/EC (MiFID) and are calculated in accordance with Annex III and IV of Directive [2000/12/EC], or from contracts concerning the delivery of commodities or emission allowances;

(d) the investment firm has a documented strategy for managing and, in particular, for controlling and limiting risks arising from the concentration of exposures. The investment firm must inform the competent authorities of this strategy and all material changes to this strategy without delay. The investment firm must make appropriate arrangements to ensure a continuous monitoring of the creditworthiness of borrowers, according to their impact on concentration risk. These arrangements must enable the investment firm to react adequately and sufficiently promptly to any deterioration in that creditworthiness;

(e) exposures exceeding the large exposure limits are cleared through a recognised clearing-house.

2. Where an investment firm exceeds the internal limits set according to the strategy referred to in paragraph 1 point (d), it must notify the competent authority without delay of the size and nature of the excess


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and the counterparty.

Or. en

Justification

Translation error in para 1(c):"Basiswerte" means "underlyings" not "basic dimensions".


Amendment 865Article 45 b (new)

45b. The competent authorities in the Committee of European Banking Supervisors may, at their discretion, lay down a common ceiling, to apply until 30 December 2010, for the increase in capital requirements resulting from the obligations to meet operational risks. Where necessary, the above arrangement shall cover investment firms to which Article 20(2) and (3) do not apply. After the expiration of the term, the European Commission shall review whether this provision needs to be prolongated.

Or. en

Justification

Replaces am 278 of the Radwan draft report.


Amendment 866Article 45 c (new)

1. By 31 December 2009, the Commission shall, on the basis of public consultations and in the light of discussions with the competent authorities, report to the European Parliament and Council on:

(a) the impact of the requirement to provide own funds according to this Directive on


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energy institutions;

(b) the continued appropriateness of the application of the requirement to provide own funds according to this Directive for energy institutions.

2. On the basis of the reports referred to in paragraph 1, the Commission may submit proposals for related amendments to this Directive.

Or. en

Justification

The inclusion of a review period of the newly introduced regulations is appropriate in order to account for the specifics of the energy market when calculating capital requirements for energy institutions.



(b) Annex II, paragraph 4.1, shall apply as it stood prior to the date referred to in Article 46.

(b) Annex II, paragraph 4.1 of Directive [93/6/EEC], shall apply as it stood prior to the date referred to in Article 46.

Or. en

Justification



Amendment 868Annex 1, Title (new) (before paragraph 8)

(a) Treatment of the protection seller

Or. en


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Justification

Re-ordering is required to clarify the treatment of the main forms of credit derivatives, distinguishing between the capital charge applied to the protection seller and that applied to the protection buyer, as well as between single name and multiple name credit linked notes.


Amendment 869Annex 1, paragraph 8, subparagraph 1

8. For credit derivatives, unless specified differently, the notional amount of the credit derivative contract must be used. When calculating the capital requirement for the market risk of the party who assumes the credit risk (the “protection seller”), positions are determined as follows:

8. When calculating the capital requirement for market risk of the party who assumes the credit risk (the “protection seller”), unless specified differently, the notional amount of the credit derivative contract must be used. For the purpose of calculating the specific risk charge, other than for total return swaps, the maturity of the credit derivative contract is applicable instead of the maturity of the obligation. Positions are determined as follows:

Or. en

Justification

Change necessary to ensure clarity and consistency between the Directive and the Basel Accord.



A total return swap creates a long position in the general market risk of the reference obligation and a short position in the general market risk of a government bond which is assigned a 0% risk weight under Annex VI of Directive [2000/12/EC]. It also creates a long position in the specific risk of the reference obligation.

(i) A total return swap creates a long position in the general market risk of the reference obligation and a short position in the general market risk of a government bond with a maturity equivalent to the period until the next interest fixing and which is assigned a 0% risk weight under Annex VI of Directive [2000/12/EC]. It also creates a long position in the specific risk of the reference obligation.


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Or. enJustification




A credit default swap does not create a position for general market risk. For the purposes of specific risk, the institution must record a synthetic long position in an obligation of the reference entity. If premium or interest payments are due under the product, these cash flows must be represented as notional positions in a government bond with the appropriate fixed or floating rate.

(ii) A credit default swap does not create a position for general market risk. For the purposes of specific risk, the institution must record a synthetic long position in an obligation of the reference entity, unless the derivative is rated and meets the conditions for qualifying debt, in which case a long position in the derivative is recorded. If premium or interest payments are due under the product, these cash flows must be represented as notional positions in a government bonds.

Or. en

Justification




A credit linked note creates a long position in the general market risk of the note itself, as an interest product. For the purpose of specific risk, a synthetic long position is created in an obligation of the reference entity. In addition, a long position is created in the specific risk of the issuer of the note.

(iii) A single name credit linked note creates a long position in the general market risk of the note itself, as an interest rate product. For the purpose of specific risk, a synthetic long position is created in an obligation of the reference entity. An additional long position is created in the issuer of the note. Where the credit linked note has an external rating and meets the conditions for a qualifying debt item, a single long


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position with the specific risk of the note need only be recorded.

Or. en

Justification




A first-asset-to-default basket creates a position for the notional amount in an obligation of each reference entity. If the size of the maximum credit event payment is lower than the capital requirement under the method in the first sentence of this sub-paragraph, the maximum payment amount may be taken as the capital requirement for specific risk.

deleted

Or. en

Justification




A second-asset-to-default basket product creates a position for the notional amount in an obligation of each reference entity less one (that with the lowest specific risk capital requirement). If the size of the maximum credit event payment is lower than the capital requirement under the method in the first sentence of this sub-

deleted


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paragraph, this amount may be taken as the capital requirement for specific risk.

Or. en

Justification




Where a credit linked note basket product has an external rating and meets the conditions for a qualifying debt item, a single long position with the specific risk of the note issuer may be recorded instead of the specific risk positions for all reference entities.

deleted

Or. en

Justification




A basket product providing proportional protection creates a position in each reference entity for the purposes of specific risk, with the total notional amount of the contract assigned across the positions according to the proportion of the total notional amount that each exposure to a reference entity represents. Where more than one obligation of a reference entity can be selected, the obligation with the highest risk

(iv) In addition to a long position in the specific risk of the issuer of the note, a multiple name credit linked note providing proportional protection creates a position in each reference entity, with the total notional amount of the contract assigned across the positions according to the proportion of the total notional amount that each exposure to a reference entity represents. Where more than one obligation of a reference entity can be


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weighting determines the specific risk. The maturity of the credit derivative contract is applicable instead of the maturity of the obligation.

selected, the obligation with the highest risk weighting determines the specific risk.

Where a multiple name credit linked note has an external rating and meets the conditions for a qualifying debt item, a single long position with the specific risk of the note need only be recorded.

Or. en

Justification



Amendment 877Annex 1, paragraph 8, subparagraph 8 a (new)

(v) A first-asset-to-default credit derivative creates a position for the notional amount in an obligation of each reference entity. If the size of the maximum credit event payment is lower than the capital requirement under the method in the first sentence of this sub-paragraph, the maximum payment amount may be taken as the capital requirement for specific risk.

A second-asset-to-default credit derivative creates a position for the notional amount in an obligation of each reference entity less one (that with the lowest specific risk capital requirement). If the size of the maximum credit event payment is lower than the capital requirement under the method in the first sentence of this sub-paragraph, this amount may be taken as the capital requirement for specific risk.

If a first or second-asset to default derivative is externally rated and meets the conditions for a qualifying debt item, then the protection seller need only calculate


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one specific risk charge reflecting the rating of the derivative.

Or. en

Justification



Amendment 878Annex 1, paragraph 8, Title (new) (before paragraph 9),

(b) Treatment of the protection buyer

Or. en

Justification

Re-ordering is required to clarify the treatment of the main forms of credit derivatives, distinguishing between the capital charge applied to the protection seller and that applied to the protection buyer, as well as between single name and multiple name credit linked notes.


Amendment 879Annex 1, paragraph 14, Table 1, column 1, row 2

Debt securities issued or guaranteed by central governments, issued by central banks, international organisations, multilateral development banks or Member States’ regional government or local authorities which would receive a 0% risk weighting under the RSA or IRB approaches.

Debt securities issued or guaranteed by central governments, issued by central banks, international organisations, multilateral development banks or Member States’ regional government or local authorities which would receive a 0% risk weighting under the Standardised Approach or IRB approaches.

Or. en


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Justification



Amendment 880Annex 1, paragraph 14, Table 1, column 1, row 3, sentence 1

Debt securities issued or guaranteed by central governments, issued by central banks, international organisations, multilateral development banks or Member States’ regional governments or local authorities which would receive a 20% or 50% risk weighting under the RSA

Debt securities issued or guaranteed by central governments, issued by central banks, international organisations, multilateral development banks or Member States’ regional governments or local authorities which would receive a 20% or 50% risk weighting under the Standardised Approach.

Or. en

Justification



Amendment 881Annex II, paragraph 8

For the purposes of paragraph 5, in the case of repurchase transactions and securities or commodities lending or borrowing transactions, all financial instruments and commodities that are eligible to be included in the trading book may be recognised as eligible collateral. For exposures due to OTC derivative instruments booked in the trading book, commodities that are eligible to be included in the trading book may also be recognised as eligible collateral. For the purposes of calculating volatility adjustments where such financial

For the purposes of paragraph 5, in the case of repurchase transactions and securities or commodities lending or borrowing transactions booked in the trading book, all financial instruments and commodities that are eligible to be included in the trading book may be recognised as eligible collateral. For exposures due to OTC derivative instruments booked in the trading book, commodities that are eligible to be included in the trading book may also be recognised as eligible collateral. For the purposes of calculating volatility


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instruments or commodities are lent, sold or provided, or borrowed, purchased or received by way of collateral or otherwise under such a transaction such instruments and commodities shall be treated in the same way as non-main index equities listed on a recognised exchange.

adjustments where such financial instruments or commodities which are not eligible under Annex VIII of Directive [2000/12/EC] are lent, sold or provided, or borrowed, purchased or received by way of collateral, or otherwise under such a transaction, and the institution is using the Supervisory volatility adjustments approach under Annex VIII, part 3 of Directive [2000/12/EC], such instruments and commodities shall be treated in the same way as non-main index equities listed on a recognised exchange.

Where institutions are using the Own estimates of volatility adjustments approach under Annex VIII, part 3 of Directive [2000/12/EC] in respect of financial instruments or commodities which are not eligible under Annex VIII of Directive [2000/12/EC] volatility adjustments must be calculated for each individual item. Where institutions are using the Internal Models Approach defined at Annex VII, Part 3 of Directive [2000/12/EC], they may also apply this approach in the trading book.

Or. en

Justification

The proposed amendment makes the Directive consistent with paragraph 703 of the Basel Framework, which provides firms with the option to apply haircutting methodologies to collateral in the trading book. The ECOFIN supported the inclusion of the own estimates approach, but not the recognition of the Internal Models Approach. Although this area will probably be revisited by the Trading Book Review, it is important that this methodology should be an option available to firms.


Amendment 882Annex II, paragraph 8

8. For the purposes of paragraph 5, in the case of repurchase transactions and securities or commodities lending or borrowing transactions, all financial

8. For the purposes of paragraph 5, in the case of repurchase transactions and securities or commodities or commodity derivatives lending or borrowing


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instruments and commodities that are eligible to be included in the trading book may be recognised as eligible collateral. For exposures due to OTC derivative instruments booked in the trading book, commodities that are eligible to be included in the trading book may also be recognised as eligible collateral. For the purposes of calculating volatility adjustments where such financial instruments or commodities are lent, sold or provided, or borrowed, purchased or received by way of collateral or otherwise under such a transaction such instruments and commodities shall be treated in the same way as non-main index equities listed on a recognised exchange.

transactions, all financial instruments and commodities and commodity derivatives that are eligible to be included in the trading book may be recognised as eligible collateral. For exposures due to OTC derivative instruments booked in the trading book, commodities that are eligible to be included in the trading book may also be recognised as eligible collateral. For the purposes of calculating volatility adjustments where such financial instruments or commodities are lent, sold or provided, or borrowed, purchased or received by way of collateral or otherwise under such a transaction such instruments and commodities and commodity derivatives shall be treated in the same way as non-main index equities listed on a recognised exchange.

However, where institutions are using their own estimates of volatility adjustments as set out in Annex VIII, part 3, 1.4.2 (b) (ii) of the Directive [2000/12/EC], they may also use these adjustments in the trading book. For instruments counting as eligible collateral in the trading book but not in the non-trading book, these adjustments must be calculated for each individual instrument. Where institutions are using the Internal Models Approach as set out in Annex VIII, part 3, 1.3.1 (b) of the Directive [2000/12/EC], they may also apply this approach in the trading book.

Or. en

Justification

When calculating the capital requirements for free delivery settlement and delivery risk, it is appropriate also to apply the credit mitigation possibility for certain trading book position also for commodity derivatives (as for commodities). Otherwise there would be an unequal treatment. The additional amendment proposed, links the Directive [93/6/EG] with paragraph 703 of the Basle Capital Accord. Following this para. 703, undertakings are allowed to apply one of three haircutting methodologies to collateral in the trading book: (a) the supervisory collateral haircuts (non-main equity); (b) own haircuts; (c) VaR internal models. For consistency reason, this option should also be given in this Directive [93/6/EG].


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Amendment 883Annex IV, paragraph 6, subparagraph 1

6. For the purpose of paragraph 19, the excess of an institution's long (short) positions over its short (long) positions in the same commodity and identical commodity futures, options and warrants shall be its net position in each commodity.

6. For the purpose of paragraph 19, the excess of an institution's long (short) positions over its short (long) positions in the same commodity and identical commodity derivatives shall be its net position in each commodity.

Or. en

Justification

It is appropriate to extent the application of the netting possibility to all commodity derivatives (open category) when calculating the capital requirements for the position risk.


Amendment 884Annex IV, paragraph 7 a (new)

7a. By way of derogation to paragraph 18 and 20, competent authorities may, in respect of financial instruments listed in points 5, 6, 7, 9 and 10, Section C, Annex 1 of Directive 2004/39/EC, permit investment firms to use alternative approaches to those set out in paragraphs 13 to 20 of this Annex.

Or. en

Justification

The proposed change is intended to open up the rules on commodity risk for a risk-adequate treatment for novel financial products such as weather or electricity derivatives. The current rules on commodity risk do not adequately deal for such derivatives. Following the principle of subsidiary, competent authorities may allow alternative approaches that account for the specific attributes of the energy market and hence may deliver more risk-adequate rules on capital.


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Amendment 885Annex IV, paragraph 20 a (new)

20a. Competent authorities may allow positions which are, or are regarded pursuant to paragraph 7 as, positions in the same commodity to be offset and assigned to the simplified approach.

Or. en

Justification

For consistency reasons, it is appropriate to allow the netting possibility (as set out for the maturity ladder approach) also for the Simplified Approach.


Amendment 886Annex V, paragraph 14 a (new)

14a. The competent authorities may allow energy institutions to use methods of standard deviation on the basis of historical simulation, when calculating capital requirements for its position risk according to Annex IV, paragraph 6 of this Directive as well as emission allowances.

Or. en

Justification

It is appropriate to allow methods of standard deviation on the basis of historical simulation, when calculating capital requirements for its position risk. Risks arising for electricity traders due to price fluctuations of electricity, are not comparable with market risks of securities and other financial instruments, including commodity derivatives relating to common underlings such as precious metals or agricultural products. Hence, the calculation of capital requirements according to the standard deviation of market value changes on the basis of a historical simulation (thus basing the capital requirement on the historical price development) reflect a more risk-adequate treatment of electricity.


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Amendment 887Annex VII, Part B, paragraph 2, point (b)

(b) clear and independent (i.e. independent of front office) reporting lines for the department accountable for the valuation process.

(b) clear reporting lines for the department accountable for the verification process.

Or. en

Justification

The requirement that there should be independent reporting lines appears to contradict the process whereby traders are responsible for marking positions in the first instance with independent price verification being carried out by a separate department as recognised in paragraph 7. The core concept is that a clear and robust verification process should exist. The requirement to demonstrate independence may compromise the ability of traders to function, without enhancing the risk management of the environment.


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