When a bank fails it has wider-reaching implications than a failure of another sort of business because people's savings are jeopardised and the stability of the financial system can be jeopardised. Therefore, we have special rules to ensure that banks stay solvent and stay afloat and do not fail, and these rules are designed to protect savers and to maintain financial stability. They are globally agreed in Basel but the current framework is out of date because it requires the same regulatory capital reserves. The same amount of money needs to be put aside for a wide range of different risks. This actually encourages banks to opt for higher risks because it means that a bank can go for a higher premium for the same regulatory capital charge. The Commission's new proposal, the main thrust of which the committee warmly welcomes, is that the lower the risk, the lower the regulatory charge. That means banks will be encouraged and rewarded for minimising risk and maintaining proper reserves of capital against their liabilities. We make a number of political demands in our report from the Committee on Economic and Monetary Affairs. Firstly, that the new rules take account of the diversity of the banking and investment sector in the European Union. These rules apply to many thousands of small and large banks and investment firms and must be designed to suit all their needs. The rules should be as easy as possible for these institutions to use. We are moving to a more sophisticated system. It does not need to be a more bureaucratic and complex system. We, in the committee, cautiously accept the role proposed by the Commission for external ratings, with the reservation that this is a role with limitations – most importantly, small businesses will not need to be rated, nor will businesses without a rating be disadvantaged. Nevertheless we believe it is important to state that banks' internal credit scoring and internal rating systems must be at the centrepiece of the new framework. They offer the best way to deliver a risk-sensitive framework over a wide area of the banking sector, as well as to clients and small businesses. We welcome the enhanced status accorded to credit risk mitigation, particularly the collateral which may be offered by small businesses. We also accept that, in the long term, there is probably a need for a new charge for other risks, but we make the point that there should be no such charge until there is a sensible method of measuring other risks. We also accept that there is a need for regulators to have the power to impose particular and additional charges on particular banks. The new framework puts trust in banks. We are not allowing them to set their own capital charges but we would be getting suspiciously close to that if we did not keep a close eye on their internal systems. That is why supervisors need to have these extra powers to impose individual charges, to make sure individual banks are sticking to the rules. Lastly, and most controversially, the committee strongly called for the use of a fast-track procedure to implement this legislation. Amendments have been tabled which take a more cautious approach, but what unites us all is the knowledge that the last time there was a Basel Accord, the United States took three months to implement it and the European Union took over three years. That was not only three years when EU banks were at a severe competitive disadvantage – and there is evidence that they suffered severely – but also three years when European consumers were denied a modern, state-of-the-art regulatory framework. We need to ask ourselves tough questions as legislators, as to whether we are doing the best for the people who elected us if our regulations and laws are out of date before they hit the statute books. We must review all our options, including comitology, fast-track and other procedures, because it is dangerous to be regulating yesterday's markets. That is what we will be doing unless we review our procedures. What we need to ensure is: that we have legislation which is flexible; that we have a means of implementing it quickly; that we have a means of updating it quickly and easily; that we have a means of ensuring consistency across Member States; and that we have appropriate democratic scrutiny of any new procedures introduced. I would call on Mr Bolkestein, here today, to put forward proposals, that Parliament can consider, to address these vital needs. They are vital for the health of the financial services sector in the European Union. IN THE CHAIR: MR PODESTÀVice-President President. – We shall suspend the debate at this point and resume it after this afternoon's votes.We shall now proceed to the votes.

Political group: PPE-DE