### (7) in the context of the indirect subscription of internal mrel eligible instruments by resolution entities pursuant to the revised union bank resolution framework , intermediate parents should be required to deduct from their own internal mrel eligible resources the full holding of own funds and eligible liabilities issued by their subsidiaries belonging to the same resolution group. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of the subsidiary for the purposes of compliance by the intermediate parent with its own internal mrel. additionally , without those deductions , the individual solvency ratios of intermediate parents would not reflect appropriately and prudently their actual loss-absorbing capacity , as those ratios would also include the loss-absorbing capacity of their subsidiaries. this could compromise the proper implementation of the chosen resolution strategy , as the intermediate parent could use up not only its own loss absorption capacity but also that of its subsidiary , before the intermediate parent or the subsidiary are no longer viable. the deductions should first be applied to the eligible liabilities items of the intermediate parents. in case the amount to be deducted would exceed the amount of the eligible liabilities items of the intermediate parents , the remaining amount should be deducted from their tier 2 items. to ensure that the deduction regime remains proportionate , that regime should not be applicable in the exceptional cases where internal mrel is applied on a consolidated basis only. ### (7) in the context of the indirect subscription of internal mrel eligible resources by resolution entities pursuant to the revised union bank resolution framework , intermediate entities should be required to deduct their full holding of internal mrel eligible resources issued by entities that are not themselves resolution entities and which belong to the same resolution group up to an amount equivalent to the internal mrel requirements of such entities. this ensures the proper functioning of the internal loss-absorbing and recapitalisation mechanisms within a group and avoids the double-counting of the internal mrel eligible resources of those entities for the purposes of compliance by the intermediate entity with its own internal mrel. without those deductions , the proper implementation of the chosen resolution strategy could be compromised , as the intermediate entity could use up not only its own loss absorption and recapitalisation capacity but also that of other entities that are not themselves resolution entities and which belong to the same resolution group , before the intermediate entity or those other entities are no longer viable. to ensure that the obligation to deduct is aligned with the scope of entities that may be used by the resolution entity for the indirect subscription of internal mrel eligible resources , and to avoid regulatory arbitrage , intermediate entities should deduct their holdings of internal mrel eligible resources issued by all entities belonging to the same resolution group and that may be subject to compliance with internal mrel , and not just the holdings of resources issued by their subsidiaries. the same obligations should apply in the case of indirect issuance of resources eligible for compliance with the requirement for own funds and eligible liabilities for material subsidiaries of non-eu g-siis laid down in article 92b of regulation (eu) no575/2013 , where relevant.


### 5. institutions and entities required to comply with article 45c of directive 2014/59/eu that are not themselves resolution entities shall deduct from eligible liabilities items their holdings of own funds and eligible liabilities that meet the conditions of article 45f(2) of that directive of their subsidiaries that belong to the same resolution group. ### 5. institutions and entities shall deduct from eligible liabilities items their holdings of own funds instruments and eligible liabilities instruments where all of the following conditions are met:


### (4) to ensure a comprehensive approach , the rules should apply to all undertakings in the union which are taxable in a member state , regardless of their legal form and status , as long as they have their residence for tax purposes in a member state and are eligible to obtain a certificate of tax residence in that member state. ### (4) to ensure a comprehensive approach , the rules should apply to all undertakings in the union which are taxable in a member state , regardless of their legal form and status.


### (4) to ensure a comprehensive approach , the rules should apply to all undertakings in the union which are taxable in a member state , regardless of their legal form and status , as long as they have their residence for tax purposes in a member state and are eligible to obtain a certificate of tax residence in that member state. ### (4) to ensure a comprehensive and proportionate approach , the rules should apply to undertakings in the union which are taxable in a member state , regardless of their legal form and status , as long as they have their residence for tax purposes in a member state and are eligible to obtain a certificate of tax residence in that member state.


### (5) to ensure the proper functioning of the internal market , the proportionality and effectiveness of potential rules , it would be desirable to limit their scope to undertakings which are at risk of being found to lack minimal substance and used with the main objective of obtaining a tax advantage. it would therefore be important to establish a gateway criterion , in the form of a set of three cumulative , indicative conditions , in order to conclude which undertakings are sufficiently at risk as aforementioned to justify that they be subjected to reporting requirements. a first condition should enable the identification of undertakings presumably engaged mainly in geographically mobile economic activities , as the place where such activities are actually carried out is usually more challenging to identify. such activities normally give rise to important passive income flows. hence , undertakings , which income consists predominantly of passive income flows would meet this condition. it should also be taken into account that entities holding assets for private use , such as real estate , yachts , jets , artworks , or equity alone , may have no income for longer periods of time , but still enable significant tax benefits by way of owning those assets. as purely domestic situations would not pose a risk for the good functioning of the internal market and would be best addressed at domestic level , a second condition should focus on undertakings engaged in cross-border activities. engagement in cross-border activities should be established having regard , on the one hand , to the nature of the transactions of the undertaking , domestic or foreign , and on the other , to its property , given that entities that only hold assets for private , non-business , use may not engage in transactions for a considerable time. additionally , a third condition should point out to those undertakings which have no or inadequate own resources to perform core management activities. in this regard , undertakings that do not have adequate own resources tend to engage third party providers of administration , management , correspondence and legal compliance services or enter into relevant agreements with associated enterprises for the supply of such services in order to set up and maintain a legal and tax presence. outsourcing of certain ancillary services only , such as bookkeeping services alone , while core activities remain with the undertaking , would not suffice in itself for an undertaking to meet this condition. while such service providers might be regulated for other , non-tax purposes , their obligations for such other purposes cannot always mitigate the risk that they enable the set up and maintenance of undertakings misused for tax avoidance and evasion practices. ### (5) to ensure the proper functioning of the internal market , the proportionality and effectiveness of potential rules , it would be desirable to limit their scope to undertakings which are at risk of being found to lack minimal substance and used with the main objective of obtaining a tax advantage. it would therefore be important to establish a gateway criterion , in the form of two cumulative , indicative conditions , in order to conclude which undertakings are sufficiently at risk as aforementioned to justify that they be subjected to reporting requirements. a first condition should enable the identification of undertakings presumably engaged mainly in geographically mobile economic activities , as the place where such activities are actually carried out is usually more challenging to identify. such activities normally give rise to important passive income flows. hence , undertakings , which income consists predominantly of passive income flows would meet this condition. it should also be taken into account that entities holding assets for private use , such as real estate , yachts , jets , artworks , or equity alone , may have no income for longer periods of time , but still enable significant tax benefits by way of owning those assets. as purely domestic situations would not pose a risk for the good functioning of the internal market and would be best addressed at domestic level , a second condition should focus on undertakings engaged in cross-border activities. engagement in cross-border activities should be established having regard , on the one hand , to the nature of the transactions of the undertaking , domestic or foreign , and on the other , to its property , given that entities that only hold assets for private , non-business , use may not engage in transactions for a considerable time.


### (6) it would be fair to exclude from the envisaged rules undertakings whose activities are subject to an adequate level of transparency and therefore do not present a risk of lacking substance for tax purposes. companies having a transferable security admitted to trading or listed on a regulated market or multilateral trading facility as well as certain financial undertakings which are heavily regulated in the union , directly or indirectly , and subject to increased transparency requirements and supervision , should equally be excluded from the scope of this directive. pure holding undertakings which are situated in the same jurisdiction as the operational subsidiary and their beneficial owner(s) are not likely to serve the objective of obtaining a tax advantage either. similar is the case of sub-holding undertakings which are situated in the same jurisdiction as their shareholder or ultimate parent entity. on this basis , they should also be excluded. undertakings that engage an adequate number of persons , full-time and exclusively , in order to carry out their activities should equally not be considered to lack minimal substance. while they are not reasonably expected to pass the gateway criterion , they should be excluded explicitly for purposes of legal certainty. ### (6) it would be fair to exclude from the envisaged rules undertakings whose activities are subject to an adequate level of transparency and tax supervision and therefore do not present a risk of lacking substance for tax purposes. companies having a transferable security admitted to trading or listed on a regulated market or multilateral trading facility as well as certain financial undertakings which are heavily regulated in the union , directly or indirectly , and subject to increased transparency requirements and supervision , should equally be excluded from the scope of this directive. pure holding undertakings which are situated in the same jurisdiction as the operational subsidiary and their beneficial owner(s) are not likely to serve the objective of obtaining a tax advantage either. similar is the case of sub-holding undertakings which are situated in the same jurisdiction as their shareholder or ultimate parent entity. on this basis , they should also be excluded. undertakings that engage an adequate number of persons , full-time and exclusively , in order to carry out their activities should equally not be considered to lack minimal substance. while they are not reasonably expected to pass the gateway criterion , they should be excluded explicitly for purposes of legal certainty. exclusion from the envisaged rules should however only apply to undertakings that do not benefit from the parent subsidiary directive and the royalties and interest directive.


### (8) to facilitate implementation of this directive , undertakings at risk of being found to lack substance and used with the main objective of obtaining a tax advantage should declare , in their annual tax return , that they possess a minimum level of resources such as people and premises in the member state of tax residence and provide documentary evidence if that is the case. while it is recognised that different activities may require a different level or type of resources , a common minimum level of resources would be expected under all circumstances. this assessment should solely aim at identifying the substance of undertakings for tax purposes and does not question the role that “trust or company service providers” , as defined in directive (eu) 2015/849 of the european parliament and of the council12 , have in the identification of money laundering , its predicate offences and terrorist financing. conversely , the absence of a minimum level of resources may be considered to indicate a lack of substance where an undertaking is already at risk of being found to lack substance for tax purposes. to ensure compatibility with relevant international standards , a common minimum level should draw on the existing union and international standards on substantial economic activity in the context of preferential tax regimes or in the absence of corporate taxation13 , as developed in the context of the forum on harmful tax practices. it is necessary to provide for submission of documentary evidence with the tax return in support of the declaration of the undertaking that it disposes a minimum of resources. it is also necessary in order to allow the administration to form a view based on the facts and circumstances of the undertaking and decide whether to initiate an audit procedure. ### (8) to facilitate implementation of this directive , undertakings at risk of being found to lack substance and used with the main objective of obtaining a tax advantage should declare , in their annual tax return , that they possess a minimum level of resources such as people and premises in the member state of tax residence and provide documentary evidence if that is the case. the requirement relating to premises in a member state has to take into account the growing prevalence of remote working , for which legitimate enterprises downscale their premises and move away from retaining exclusive premises. while it is recognised that different activities may require a different level or type of resources , a common minimum level of resources would be expected under all circumstances. this assessment should solely aim at identifying the substance of undertakings for tax purposes and does not question the role that “trust or company service providers” , as defined in directive (eu) 2015/849 of the european parliament and of the council12 , have in the identification of money laundering , its predicate offences and terrorist financing. conversely , the absence of a minimum level of resources may be considered to indicate a lack of substance where an undertaking is already at risk of being found to lack substance for tax purposes. to ensure compatibility with relevant international standards , a common minimum level should draw on the existing union and international standards on substantial economic activity in the context of preferential tax regimes or in the absence of corporate taxation13 , as developed in the context of the forum on harmful tax practices. it is necessary to provide for submission of documentary evidence with the tax return in support of the declaration of the undertaking that it disposes a minimum of resources. it is also necessary in order to allow the administration to form a view based on the facts and circumstances of the undertaking and decide whether to initiate an audit procedure.


### this directive applies to all undertakings that are considered tax resident and are eligible to receive a tax residency certificate in a member state. ### this directive applies to all undertakings that are considered tax resident and are eligible to receive a tax residency certificate in a member state including permanent establishments .


### (5) ‘beneficial owner’ means beneficial owner as defined in article 3 , point (6) , of directive (eu) 2015/849 of the european parliament and of the council; ### (5) ‘beneficial owner’ means beneficial owner as defined in article 1 , point 4 , of directive 2003/49/ec;


### more than 75% of the revenues accruing to the undertaking in the preceding two tax years is relevant income; ### more than 50% of the revenues accruing to the undertaking in the preceding two tax years is relevant income;


### more than 60% of the book value of the undertaking’s assets that fall within the scope of article 4 , points (e) and (f) , was located outside the member state of the undertaking in the preceding two tax years; ### more than 55% of the book value of the undertaking’s assets that fall within the scope of article 4 , points (e) and (f) , was located outside the member state of the undertaking in the preceding two tax years;


### (ii) at least 60% of the undertaking’s relevant income is earned or paid out via cross-border transactions; ### (ii) at least 55% of the undertaking’s relevant income is earned or paid out via cross-border transactions;


### in the preceding two tax years , the undertaking outsourced the administration of day-to-day operations and the decision-making on significant functions. ### deleted


### 2. by derogation from paragraph 1 , member states shall ensure that the undertakings falling within any of the following categories are not subject to requirements of article 7: ### 2. by derogation from paragraph 1 , member states shall ensure that the undertakings falling within any of the following categories are not subject to requirements of article 7 , unless they benefit from the provisions of either directive 2011/96/eu or directive 2003/49/ec:


### undertakings that have the main activity of holding shares in operational businesses in the same member state while their beneficial owners are also resident for tax purposes in the same member state; ### deleted


### undertakings with holding activities that are resident for tax purposes in the same member state as the undertaking’s shareholder(s) or the ultimate parent entity , as defined in section i , point 7 , of annex iii to directive 2011/16/eu; ### deleted


### undertakings with at least five own full-time equivalent employees or members of staff exclusively carrying out the activities generating the relevant income; ### deleted


### undertakings with at least five own full-time equivalent employees or members of staff exclusively carrying out the activities generating the relevant income; ### undertakings with a reasonably adequate number of full-time employees or members of staff exclusively carrying out the activities generating the relevant income;


### 1. member states shall require that undertakings meeting the criteria laid down in article 6(1) declare in their annual tax return , for each tax year , whether they meet the following indicators of minimum substance: ### 1. member states shall require that undertakings within the scope of this directive in accordance with article 2 declare in their annual tax return , for each tax year:


### the undertaking has at least one own and active bank account in the union; ### the undertaking has at least one own and active bank account or e-money account in the union;


### (4) are not employees of an enterprise that is not an associated enterprise and do not perform the function of director or equivalent of other enterprises that are not associated enterprises; ### (4) are not employees of an enterprise that is not an associated enterprise and do not perform the function of director or equivalent of other enterprises that are not associated enterprises , except under article 5(1) , point (a);


### 2. undertakings referred to in paragraph 1 shall accompany their tax return declaration with documentary evidence. the documentary evidence shall include the following information: ### 2. undertakings that fulfil the conditions referred to in paragraph 1 , points (b) and (c) , shall accompany their declaration referred to in paragraph 1 with documentary evidence. the documentary evidence shall include the following information:


### outsourced business activities; ### outsourced business activities , such as accounting , sales , marketing , logistics , consulting etc.;


### bank account number , any mandates granted to access the bank account and to use or issue payment instructions and evidence of the account’s activity. ### bank account number , any mandates granted to access the bank account and to use or issue payment instructions and evidence of the account’s activity such as aggregate inflows and outflows;


### information about the employee profiles , including the level of their experience , their decision-making power in the overall organisation , role and position in the organisation chart , the type of their employment contract , their qualifications and duration of employment; ### information about the full-time , part-time , and freelance employee profiles , including the level of their experience , their decision-making power in the overall organisation , role and position in the organisation chart , the type of their employment contract , their qualifications and duration of employment;


### 2. a member state may grant that exemption for one tax year if the undertaking provides sufficient and objective evidence that its interposition does not lead to a tax benefit for its beneficial owner(s) or the group as a whole , as the case may be. that evidence shall include information about the structure of the group and its activities. that evidence shall allow to compare the amount of overall tax due by the beneficial owner(s) or the group as a whole , as the case may be , having regard to the interposition of the undertaking , with the amount that would be due under the same circumstances in the absence of the undertaking. ### 2. a member state may grant that exemption for one tax year if the undertaking provides sufficient and objective evidence that its interposition does not lead to a tax benefit for its beneficial owner(s) or the group as a whole , as the case may be. that evidence shall include information about the structure of the group and its activities , including a list of its employees working on full-time equivalence. that evidence shall allow to compare the amount of overall tax due by the beneficial owner(s) or the group as a whole , as the case may be , having regard to the interposition of the undertaking , with the amount that would be due under the same circumstances in the absence of the undertaking.


### where the undertaking’s shareholder(s) is not resident for tax purposes in a member state , the member state of the payer of this income shall apply withholding tax in accordance with its national law , without prejudice to any agreement or convention that provides for the elimination of double taxation of income , and where applicable , capital , in force with the third country jurisdiction of the undertaking’s shareholder(s). ### where the undertaking’s shareholder(s) is not resident for tax purposes in a member state , the member state of the payer of this income shall apply a withholding tax , without prejudice to any agreement or convention that provides for the elimination of double taxation of income , and where applicable , capital , in force with the third country jurisdiction of the undertaking’s shareholder(s).


### summary of the evidence provided by the undertaking in accordance with article 7(2). ### summary of the declaration and , where appropriate the evidence provided by the undertaking in accordance with article 7(2).


### member states shall ensure that those penalties include an administrative pecuniary sanction of at least 5% of the undertaking’s turnover in the relevant tax year , if the undertaking that is required to report pursuant to article 6 does not comply with such requirement for a tax year within the prescribed deadline or makes a false declaration in the tax return under article 7. ### member states shall ensure that those penalties include an administrative pecuniary sanction of at least one time the tax benefit obtained by the undertaking in the relevant tax year , if the undertaking that is required to report pursuant to article 6 does not comply with such requirement for a tax year within the prescribed deadline and an administrative pecuniary sanction of at least 3 times the tax benefit obtained by the undertaking in the relevant tax year , if the undertaking that is required to report pursuant to article 6 makes a false declaration in the tax return under article 7. these pecuniary sanctions shall be in addition to the repayment of any tax benefit obtained.


### a. whereas the banking union (bu) currently consists of the single supervisory mechanism (ssm) and the single resolution mechanism (srm); ### a. whereas the banking union (bu) currently consists of the single supervisory mechanism (ssm) and the single resolution mechanism (srm) , ensuring full alignment between supervision and management of banking crises; whereas the bu still lacks completion with the establishment of an european deposit insurance scheme (edis) and the implementation of the backstop for the single resolution fund;


### c. whereas the problems of the banking sector may worsen after the temporary support measures introduced during the covid-19 crisis are lifted; ### c. whereas an early or uncoordinated withdrawal of the temporary measures introduced during the covid-19 crisis could see the re-emergence of some pre-crisis deficiencies and vulnerabilities of the banking sector;


### d. whereas some financial institutions in the bu are heavily invested in the debt of their own home sovereign; ### d. whereas financial institutions in the bu have invested in the debt of their own home sovereign;


### e. whereas the role of the banking sector is crucial to the recovery and transition to a low-carbon economy; ### e. whereas the role of the banking sector is crucial to the recovery and transition to a low-carbon economy; whereas climate change , environmental degradation and the transition to a low-carbon economy are factors to be taken into account when assessing the sustainability of banks’ balance sheets , as a source of risk potentially impacting investments across regions and sectors; whereas further assessment needs to be conducted on the best way on how to internalise these potential risks;


### f. whereas there are numerous challenges to the digitalisation of finance; ### f. whereas there are numerous challenges to the digitalisation of finance; whereas same risks should be subject to the same prudential rules;


### g. whereas there is a need for effective anti-money laundering supervision; ### g. whereas there is a need for effective anti-money laundering supervision; whereas the further strengthening and harmonisation of eu prudential and anti-money laundering supervision and enforcement , which are necessary to protect the integrity of the eu’s financial system , are a priority;


### h. whereas consumers , investors and all depositors should be well protected; ### h. whereas consumers , investors and depositors should be properly protected;


### 1. recalls that one goal of the bu is the security of the banking system and the prevention of bank bailouts by taxpayers; supports efforts to strengthen the bu; stresses that a solid bu will result in increased confidence in the banking sector; ### 1. recalls that the bu aims to ensure that the banking sector in the euro area and the wider eu is stable , safe and reliable , thus contributing to financial stability as wells as to promote the security of the banking system and the prevention of bank bailouts by tax payers; supports efforts to strengthen and complete the bu; stresses that a solid and complete bu will result in increased confidence in the banking sector;


### 3. stresses that the relatively good performance of banks during the covid-19 crisis is related to the policies implemented by the member states during the pandemic , as well as to temporary measures under regulation (eu) 575/2013 (capital requirements regulation); ### 3. welcomes the temporary relief measures put in place as an initial containment measure to limit economic damage caused by the pandemic and protecting the performance of banks during the covid-19 crisis; notes that economic support measures must remain in place as long as necessary , and should be tailored to current and expected economic circumstances;


### 4. recalls the key role of the eu banking sector in financing the recovery of the european economy; ### 4. recalls that a strong , resilient , well-regulated and well-capitalised eu banking sector is vital to support and finance the recovery of the european economy;


### 5. notes that the eba , the ecb and the srb still see many problems in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these problems are likely to increase after the withdrawal of the emergency measures; ### 5. notes that the eba , the ecb and the srb still see many challenges in the banking system , such as high stocks of non-performing loans (npls) , exposures to sectors which are sensitive to the covid-19 crisis , deficiencies in risk management , and discrepancies in the implementation of international financial reporting standard 9 (ifrs 9); underlines with concern that these challenges are likely to increase after the withdrawal of the emergency measures;


### 6. supports ongoing work on the implementation of the basel iii rules; ### 6. supports the ongoing work on the implementation of the basel iii rules; recalls that the transposition of these rules into eu law should be basel compliant , although taking into account the principle of proportionality , and respect , where appropriate , the specificities and diversity of the eu banking sector; stresses that deviations from the internationally agreed rules should be temporary and eu regulation should converge to full compliance with basel iii standards over time;


### 7. notes that the banking sector is adapting to the challenges of digitalisation; stresses the need for further investments , research and adequate regulations; appreciates the work on the digital finance package; considers that the priority should be customer safety , inclusiveness and technological neutrality; observes with interest the work on the digital euro; ### 7. welcomes the accelerated pace of digitalisation in the banking sector , allowing banks to better serve clients remotely and offer new products and providing opportunities for increased cost-efficiency; stresses the need for further investments ,research and adequate regulations; calls for full respect for consumers’ rights and considers of outmost importance to promote financial inclusion , especially for vulnerable groups with low digital or financial literacy levels; appreciates the work on the digital finance package;


### 8. recalls that the basis for the cooperation between the ssm and the uk financial conduct authority is the memorandum of understanding between the ecb and the uk authorities , which entered into force on 1 january 2021; ### 8. recalls that the basis for the cooperation between the ssm and the uk financial conduct authority is the memorandum of understanding between the ecb and the uk authorities , which entered into force on 1 january 2021; notes that the european commission has recently announced the extension of its temporary permit allowing european banks and fund managers to use uk clearing houses , thereby avoiding any short-term cliff-edge effects;


### 10. considers the reduction of npls should remain a priority; warns that their number is likely to increase rapidly after the withdrawal of emergency support measures; draws attention to the importance of prudential compliance , early identification and proactive management of npls; ### 10. considers that credit risk management and the continuation of reduction of npls should remain one of the key priorities; notes , however , that the aggregate non-performing loans ratio decreased further to 2.17% in the third quarter of 2021 , despite the challenges caused by the pandemic thus confirming a downward trend; draws attention to the importance of prudential compliance , early identification and proactive management of npls;


### 11. is concerned about the rising level of sovereign debt on the balance sheets of banks in the bu; notes that government bonds are not risk-free assets and that risks are differentiated; emphasises that the issue of regulatory treatment of sovereign exposures requires an in-depth examination of the consequences of different approaches; ### 11. notes that the need to respond to the unexpected and serious challenges caused by the pandemic crisis has originated a rise of the share of sovereign debt on the balance sheets of banks; welcomes the creation of next generation eu and considers that it will provide high-quality , low-risk european assets , allowing for a rebalancing of sovereign bonds on banks’ balance sheets; emphasises that next generation eu will play an important role in supporting the recovery and must serve as an opportunity to enhance public and private investments and support the modernisation of the economy; notes that the issue of regulatory treatment of sovereign exposures requires an in-depth examination of the consequences of different approaches and be conducted within international fora;


### 12. notes that the transition to a low-carbon economy presents new challenges and risks related to the preference for sustainable investments; stresses the need for an in-depth analysis of the economic efficiency of sustainable investments in order to avoid a future bubble of green assets; calls for clear guidelines for banks based on economic data; ### 12. notes that the transition to a low-carbon economy presents new challenges and risks related to the need for sustainable investments; recalls that the ecb has concluded its first ever large-scale assessment of climate and environmental (c&e) risks management of eu banks in 2021 , and concluded that while initial steps have been taken towards incorporating c&e risks , further progress is still warranted; emphasises therefore that further supervisory pressure is required for banks to disclose and address climate-related and environmental risks appropriately;


### 12. notes that the transition to a low-carbon economy presents new challenges and risks related to the preference for sustainable investments; stresses the need for an in-depth analysis of the economic efficiency of sustainable investments in order to avoid a future bubble of green assets; calls for clear guidelines for banks based on economic data; ### 12. notes that the transition to a low-carbon economy presents new challenges and risks related to the preference for sustainable investments; stresses that the risks of transition become higher the longer we wait with necessary fossil fuel divestments; underlines that the ecb found that 'climate change represents a major source of system risk' and that the economic cost of inaction is some 8pp of gdp higher than the cost of transition;


### 13. recalls that the impact of special measures during the pandemic should be taken into account in the assessment of the current condition of banks; stresses that these measures distort the picture , as the decline in real economic activity does not fully translate into banks’ balance sheets; ### deleted


### 14. draws attention to the dangers of a very loose monetary policy stimulating inflation; points out the need for the gradual tightening of monetary policy; ### 14. notes president lagarde’s recent remarks before the econ committee stating that 'energy prices continue to be the main reason for the elevated inflation rates' and that 'is likely to remain elevated for longer than previously expected , but to decline in the course of this year'; also recalls the european economic winter forecast 2022 of the european commission stating that 'inflation is expected to decline markedly in the final quarter of the year and settle at below 2% next year';


### 16. notes the problems and challenges related to home/host issues; points out that greater market integration requires credible safeguards in eu law for host member states; ### 16. notes the problems and challenges related to home/host issues; points out that greater market integration requires credible safeguards in eu law for host member states; stresses that the completion of the banking union is of the utmost importance to solve the home/host concerns;


### 17. stresses the need for effective anti-money laundering supervision; notes the commission’s adoption of the anti-money laundering (aml) package of proposals; ### 17. welcomes the commission’s action plan for a comprehensive union policy on preventing money laundering and terrorism financing , published on 7 may 2020; stresses the need for effective anti-money laundering supervision and enforcement; welcomes the commission’s adoption of the anti-money laundering package of proposals , in particular the proposal to establish a new european authority on anti-money laundering (amla) as a single supervisor of selected obliged entities and as the host of a coordination and support mechanism for fius in the eu; stresses that the new authority amla should be equipped with adequate resources;


### 19. welcomes the activities of the srb in 2021 , including the further completion of the single resolution fund; takes note of the srb’s work programme for the coming years , which includes making the effective resolution of all banks under the srb possible by 2023; ### 19. welcomes the activities of the srb in 2021; takes note of the srb’s work programme for the coming years , which includes making the effective resolution of all banks under the srb possible by 2023;


### 22. recalls that the ssm and the srm operate at eu level , while deposit guarantee schemes (dgss) are operated at national level; recognises that a european deposit insurance scheme (edis) would improve protection for depositors in the eu; ### 22. recalls that the ssm and the srm operate at eu level , while deposit guarantee schemes (dgss) are operated at national level; recognises that a european deposit insurance scheme (edis) is a key element of the bu's completion and will ensure a greater protection of depositors in the eu , reduce home/host challenges and foster deeper integration;


### 23. notes the ongoing discussion of various concepts for the edis; ### 23. notes the ongoing discussion of various concepts for the edis; considers , nonetheless , that any short-term solution found should not prevent the establishment of a fully mutualised edis as soon as possible;


### 24. considers that the main obstacles for edis are concerns about risks in some banking systems; stresses that the implementation of credible and effective risk reduction measures could enable an agreement on edis; ### 24. recalls that there has been considerable risk reduction in the banking sector over the past years , also as a result of targeted ecb banking supervision policies; supports the analysis of the ssm in this respect stating that "the implementation of edis should not be linked to further risk reduction benchmarks";


### (26) in order to avoid settlement risks due to the insolvency of the settlement agent , a csd should settle , whenever practical and available , the cash leg of the securities transaction through accounts opened with a central bank. where that option is not practical and available , including where a csd does not meet the conditions to access a central bank other than that of its home member state , that csd should be able to settle the cash leg of transactions in foreign currencies through accounts opened with institutions authorised to provide banking services under the conditions provided in regulation (eu) no 909/2014. the efficiency of the settlement market would be better served by enhancing the possibilities for csds to provide settlement in foreign currencies through the use of accounts opened with institutions authorised to provide banking services , within appropriate risk limits , with a view to deepen capital markets and enhance cross-border settlement. for that purpose , csds authorised to provide banking-type ancillary services in accordance with regulation (eu) no 909/2014 and for which the relevant risks are already monitored , should be able to offer such services to other csds that do not hold such license irrespective if the latter are part of the same group of companies. ### (26) in order to avoid settlement risks due to the insolvency of the settlement agent , a csd should settle , whenever practical and available , the cash leg of the securities transaction through accounts opened with a central bank. where that option is not practical and available , including where a csd does not meet the conditions to access a central bank other than that of its home member state , that csd should be able to settle the cash leg of transactions in foreign currencies through accounts opened with institutions authorised to provide banking services under the conditions provided in regulation (eu) no 909/2014. the efficiency of the settlement market would be better served by enhancing the possibilities for csds to provide settlement in foreign currencies through the use of accounts opened with institutions authorised to provide banking services , within appropriate risk limits , with a view to deepen capital markets and enhance cross-border settlement. for that purpose , csds authorised to provide banking-type ancillary services in accordance with regulation (eu) no 909/2014 and for which the relevant risks are already monitored , should be able to offer such services to other csds that do not hold such license irrespective if the latter are part of the same group of companies. designated credit institutions and csds authorised to provide banking-type ancillary services should only be authorised to provide such services for the purposes of settlement of the cash leg of the transactions in the securities settlement system of the csd seeking to use the banking-type ancillary services in a currency or currencies other than that of the country where the settlement takes place , and not to carry out any other activities.


### eba shall , in close cooperation with esma and the members of the escb , develop draft regulatory technical standards to determine the maximum amount referred to in paragraph 5 , taking into account the need to balance the credit and liquidity risks for csds that result from the settlement of cash payments through accounts opened with credit institutions and the need to allow csds to settle in foreign currencies through accounts opened with such credit institutions. when developing these draft regulatory technical standards the eba shall also determine , where necessary , any accompanying appropriate risk management and prudential mitigating requirements. ### eba shall , in close cooperation with esma and the members of the escb , develop draft regulatory technical standards to determine the maximum amount referred to in paragraph 5 , taking into account:


### (iii) the following point (k) is added: ### deleted


### a. whereas the use of new technologies in the eu single market and the digitalisation of tax administrations across europe is transforming relations between citizens and companies , as taxpayers , along with national tax authorities , are facilitating better compliance; ### a. whereas the use of new technologies in the eu single market and the digitalisation of tax administrations across europe is transforming relations between citizens and companies with national tax authorities , and facilitating better compliance;


### b. whereas tax authorities face many challenges nowadays regarding effective cross-border cooperation , given the acceleration of digital transactions , the increasing mobility of taxpayers , the number of cross-border transactions and the internationalisation of economic operations and business models; ### b. whereas tax authorities face many challenges nowadays regarding effective tax collection and cross-border cooperation , given the acceleration of digital transactions , the increasing mobility of taxpayers , the number of cross-border transactions , the internationalisation of economic operations and business models and the design of complex aggressive tax planning schemes by an industry of enablers;


### d. whereas new technological solutions , such as blockchain , can be used by tax administrations to better serve the needs of tax payers while such technologies can also be abused and serve as a vehicle for illicit activities , with the criminal intent to avoid paying taxes; ### d. whereas new technological solutions , such as blockchain , can be used by tax administrations to better serve the needs of tax payers while such technologies can also be abused and serve as a vehicle for illicit activities;


### e. whereas tax administrations across europe , within different degrees , are taking important steps towards the digitalisation of processes , making tax compliance easier , faster and more effective; whereas the use of new technologies is significantly different between member states; whereas national tax administrations , in general , need a further push to realise the potential in the field of technological and digital transformation; ### e. whereas tax administrations across europe , although to varying degrees , are taking important steps towards the digitalisation of processes , making tax compliance easier , faster and more effective; whereas the use of new technologies is significantly different between member states; whereas national tax administrations , in general , need a further push to realise the potential in the field of technological and digital transformation;


### f. whereas the increasing use of crypto-assets is forcing tax administrations to adapt current taxing practices within the single market; ### f. whereas the increasing use of crypto-assets is forcing tax administrations to adapt current taxing practices within the single market; whereas the crypto-asset market makes the identification of tax-relevant activities very difficult because it relies less on traditional financial intermediaries , who typically provide information for tax purposes;


### g. whereas there is an international effort and commitment to better regulate the fair taxation of the digital economy; whereas , in this context , it is crucial that the eu take a leading role , namely on strong cooperation between member states to tax , in a fair and transparent way , crypto-assets; ### g. whereas there is an international effort and commitment to better regulate the fair taxation of the digital economy; whereas crypto-assets could be exploited to undermine existing international tax transparency initiatives , as recognised by the oecd; whereas , in this context , it is crucial that the eu take a leading role , namely on strong cooperation between member states to tax crypto-assets in a fair and transparent way;


### h. whereas the union has already taken important steps towards a clear definition of crypto-assets and this definition must facilitate the fair and simple taxation of these assets; and whereas definitions of such crypto-assets must be highly aligned with international standards , namely with the financial action task force; ### h. whereas the union has already taken important steps towards a clear definition of crypto-assets and this definition must facilitate the fair and simple taxation of these assets;


### i. whereas tax policy is a national competence , but strong cooperation between member states is essential to respond to the challenges posed to the integrity of the single market , namely by the increasing the use of crypto-assets; whereas a framework of 27 significantly different approaches to crypto-assets taxation could lead to significant obstacles for the fulfilment of the objectives of the european digital single market; ### i. whereas certain fields of tax policy remain a national competence , strong cooperation and coordination between member states in those fields is essential to mitigate distortions to the single market and prevent tax evasion and avoidance; whereas a framework of 27 significantly different approaches to crypto-assets taxation could lead to significant obstacles to the fulfilment of the objectives of the european digital single market;


### 1. considers that national tax administrations should be better equipped with the adequate resources to better serve taxpayers and ensure compliance and that , in the context of digital transition , this means proper commitment from member states with investment in human resources training , digital infrastructures and specialised personnel and equipment; ### 1. considers that national tax administrations should be better equipped with the adequate resources to facilitate efficient tax collection , better serve taxpayers and ensure compliance and that , in the context of digital transition , this means proper commitment from member states with investment in human resources training , digital infrastructures and specialised personnel and equipment;


### 2. points out that adapting the it capacities of tax authorities through new emerging technologies , such as potential distributed ledger technologies like blockchain or artificial intelligence , promises to foster intelligent , effective and efficient tax and administrative procedures , facilitate tax compliance by citizens and businesses , and increase the traceability and identification of taxable transactions in a globalised environment where cross-border transactions have increased; ### 2. points out that adapting the it capacities of tax authorities through new emerging technologies , such as potential distributed ledger technologies like blockchain or artificial intelligence , promises to foster intelligent , effective and efficient tax and administrative procedures , facilitate tax compliance by citizens and businesses , and increase the traceability and identification of taxable transactions in a globalised environment where cross-border transactions have increased; asks the commission to analyse and evaluate the possibility of implementing a tax on personal data storage in order to protect the european citizens’ privacy and to reduce the leverage of companies over consumers;


### 4. calls on the commission to promote an assessment of the different national policies regarding the combat against tax fraud and evasion in the field of crypto-assets , underlining best practices and potential loopholes , and taking advantage of cooperation platforms in the field of taxation , namely the fiscalis programme; ### 4. calls on the commission to promote an assessment of the ways in which different member states tax crypto-assets and of different national policies regarding the fight against tax fraud and evasion in the field of crypto-assets , underlining best practices and potential loopholes , and taking advantage of cooperation platforms in the field of taxation , namely the fiscalis programme;


### 5. invites the commission to evaluate the creation of a new platform for training and best-practice sharing between national tax authorities in the field of combat against tax fraud and evasion in the digital economy , notably the use of crypto-assets; understands that this new platform could be integrated in current initiatives , such the fiscalis programme; ### 5. invites the commission to evaluate the creation of a new platform for training and best-practice sharing between national tax authorities in the field of combatting against tax fraud and evasion in the digital economy , notably the use of crypto-assets; understands that this new platform could be integrated in current initiatives , such the fiscalis programme;


### 6. invites the commission to continue evaluating the operational impact and tax governance aspects of blockchain technology , notably through the fiscalis programme; ### 6. invites the commission to continue evaluating the operational impact and tax governance aspects of blockchain and other distributed ledger technology , notably through the fiscalis programme;


### 7. considers that crypto-assets must be subject to fair , transparent and effective taxation , in order to guarantee fair competition between businesses in the area of financial services; understands that decisions on the taxation of crypto-assets lie with member states , according to the treaties; stands for an innovation-friendly environment in the digital single market , where entrepreneurs , smes and start-ups can thrive , generate growth , create jobs and contribute to economic recovery through tax revenues; ### 7. considers that crypto-assets must be subject to fair , transparent and effective taxation , in order to guarantee a level playing field , prevent a race to the bottom and ensure fair competition between businesses in the area of financial services;; stands for an innovation-friendly environment in the digital single market , where entrepreneurs , smes and start-ups can thrive , generate growth , create jobs and contribute to economic recovery through tax revenues under an effective regulatory framework;


### 9. notes that each country tends to use their own terminology when designing their national regulatory solutions to crypto-assets , which could cause legal uncertainty for citizens and companies , at the same time emerge as a threat to the integrity of the european single market; ### 9. notes that each country tends to use their own terminology when designing their national regulatory solutions to crypto-assets , which could cause legal uncertainty for citizens and companies , and at the same time in advertently create loopholes , providing opportunities for tax abuse and avoidance in the european single market;


### 11. points out that the taxation of crypto-assets in cross-border situations is linked to several dimensions of tax policy and that such dimensions are distributed between national and european competences , but the benefit of a european approach is concentrated in instruments linked to administrative cooperation and corporate taxation; ### 11. points out that the taxation of crypto-assets in cross-border situations is linked to several dimensions of tax policy and that currently such dimensions are distributed between national and european competences , but that the benefit of a common european approach is concentrated in instruments linked to administrative cooperation and corporate taxation;


### 13. calls on the member states to consider the dimension of crypto-assets in their national tax reforms , and to consider implementing more effective systems that ensure less compliance costs and administrative burden , but that guarantee , at the same time , the fair , transparent and effective taxation of crypto-assets; underlines the role of tax incentives and exemptions in promoting technological innovation and development; ### 13. calls on the member states to consider the specificities of the use of crypto-assets in their national tax reforms , and to consider implementing more effective systems that ensure less compliance costs and administrative burden , but that guarantee , at the same time , the fair , transparent and effective taxation of crypto-assets;


### 14. points out that the crypto-asset landscape is global and requires an international approach; understands , in this regard , the need to further negotiate international instruments on the matter; ### 14. points out that the crypto-asset landscape is global and requires a coordinated international approach; understands , in this regard , the need to further negotiate international instruments on the matter;


### 16. believes that it is necessary to amend the scope of the directive on administrative cooperation5 (dac8) so that european legislators can further assess if other categories of income and assets such as crypto-assets are to be included; ### 16. believes that it is necessary to amend the scope of the directive on administrative cooperation (dac8) so that the exchange of information framework in the field of taxation can include crypto-assets and e-money;


### 17. calls on the commission and national public authorities to ensure that blockchain technology develops in compliance with the rules on the processing of personal data , on cybersecurity and on anti-money laundering/combating the financing of terrorism; ### 17. calls on the commission and national public authorities to ensure that the use of blockchain technology can be further developed in full compliance with fundamental rights , cybersecurity and anti-money laundering/combatting the financing of terrorism standards;


### 18. encourages the commission to take account of existing digital solutions , legal provisions and administrative guidance used in member states in order to assess how to leverage blockchain technologies and to prevent tax fraud and avoidance; supports the development of a european blockchain services infrastructure; ### 18. encourages the commission to take account of existing digital solutions , legal provisions and administrative guidance used in member states in order to assess how to leverage blockchain and other distributed ledger technologies and to prevent tax fraud and avoidance; supports the development of a european blockchain services infrastructure;


### a. whereas according to the ecb projections of september 2022 , economic growth will decline from 3.1 % in 2022 to 0.9 % in 2023 , before recovering to 2.3 % in 2024; whereas the outlook for euro area activity is surrounded by a high degree of uncertainty , related to the development of the war in ukraine and the energy crisis , with a number of independent forecasts predicting a recession; ### a. whereas according to the ecb projections of september 2022 , economic growth will decline from 3.1 % in 2022 to 0.9 % in 2023 , before recovering to 2.3 % in 2024; whereas the outlook for euro area activity is surrounded by a high degree of heterogeneity across countries and uncertainty , related to the development of the war in ukraine and the energy crisis , with a number of independent forecasts predicting a recession;


### c. whereas according to the ecb projections of september 2022 , headline inflation is expected to fall from 8.1 % in 2022 to 2.3 % in 2024; ### c. whereas according to the ecb projections of september 2022 , headline inflation is expected to fall from 8.1 % in 2022 , 5 ,5% in 2023 to 2.3 % in 2024;


### 1. is deeply concerned by the unprovoked russian invasion of ukraine and by its repercussions for the european economy; ### 1. is deeply concerned by the unprovoked russian invasion of ukraine and by its serious , long-lasting and unpredictable repercussions for the european economy and society , especially for the most exposed and vulnerable groups , such as lower-income households and smes;


### 2. highlights that the statutory independence of the ecb , as laid down in the treaties , is a prerequisite for it to fulfil its mandate; ### 2. highlights that the statutory independence of the ecb , as laid down in the treaties , is a prerequisite for it to fulfil its mandate; highlights that central bank independence should be accompanied by a corresponding level of accountability;


### 3. welcomes the republic of croatia as the 20th member country of the euro area; ### 3. welcomes the republic of croatia as the 20th member country of the euro area; calls on ecb for an adequate reflection on how to apply the current euro accession criteria during extraordinary , disruptive and uncertain events , such as ukraine conflict , in order to proceed with economic and monetary union integration. calls on the ecb to promote the benefits of adopting the euro as an incentive for other non-euro members to join or speed up their efforts for future accession;


### 4. notes that fiscal and monetary policies have reinforced each other during the pandemic; stresses that maintaining price stability today requires even closer coordination between fiscal , monetary and structural policies , as addressing supply-side shocks requires greater supply-chain resilience and a shift away from fossil fuels; ### 4. notes that fiscal , budgetary and monetary policies have reinforced each other during the pandemic; stresses that maintaining price stability today requires even closer coordination between fiscal , budgetary , monetary and structural policies , as addressing supply-side shocks requires greater supply-chain resilience with the appropriate level of investment , and a shift away from fossil fuels; notes that during covid , all eu institutions and member states worked together , swiftly , in a coordinated manner and within their mandates to tackle the social , economic and financial impacts of the crisis


### 5. welcomes president lagarde’s statement that the current geopolitical crisis requires us to progress on eu fiscal integration; recalls that the economic and monetary union cannot function smoothly without a fiscal capacity at european level to respond to external shocks; ### 5. welcomes president lagarde’s statement that the current geopolitical crisis requires us to progress on eu fiscal integration; recalls that the economic and monetary union cannot function smoothly without a fiscal capacity at european level capable of providing a counter-cyclical stabilisation function and timely and adequate support in the event of economic shocks;


### 6. echoes president lagarde’s call for a swift revision and simplification of the stability and growth pact; ### 6. echoes president lagarde’s call for a swift revision and simplification of the stability and growth pact; recalls that the upcoming revision of the economic governance framework has to provide the eu with stable , transparent , credible and flexible rules that could be implemented and respected by all member states. recalls that fiscal rules are essential for the proper functioning of the eu and should be respected. recalls that rules should be applied in an intelligent way and within a flexible framework that adapts quickly to changes with the proper democratic accountability. the new framework should promote growth and ensure a better balance between sustainability and stabilisation. notes that the new transmission protection instrument (tpi) is now linked with the eu fiscal rules and its activation requires sustainable economic policies and compliance with the eu fiscal framework;


### 7. is alarmed that euro area inflation has continued to rise and has reached undesirably high levels; stresses that headline inflation rose to a record 9.1 % in august 2022; stresses that energy is by far the most significant driver of inflation (38.3 %) , followed by food prices (10.6 %); ### 7. is alarmed that euro area inflation has continued to rise and has reached undesirably high levels; stresses that headline inflation rose to a record 9.1 % in august 2022; stresses that energy is by far the most significant driver of inflation (38.3 %) , followed by food prices (10.6 %); notes that ecb forecasts an headline inflation of 8% in 2022 , 5 ,5% in 2023 and 2 ,8% in 2024 , with risks on the upside due to disruptions in the supply of energy;


### 8. takes note of recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; is concerned about the implications of such policy decisions for growth and employment; ### 8. takes note of recent ecb monetary policy decisions to raise rates by 50 and 75 basis points in july and september 2022; is concerned about the implications of such policy decisions for growth and employment; calls for a reflection of a more balanced and gradual adjustment of policy instead of a large and fast upfront tightening. notes that latest economic and financial indicators point that eu economy is likely heading towards a worse than expected recession with the risk of a wide negative social impact with only moderate effect on the inflation rate. calls for a more insight update and justification of the future policy rate decisions , given the current situation and high level of uncertainty;


### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; ### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; notes that the imf , in its 2022 world economic outlook , concluded that , on average , the risks of a wage spiral are limited , so far. notes that imf underlines that three main drivers are containing the risks: the shocks to inflation are coming from outside the labor market , falling real wages are helping to reduce price pressures , and central banks are aggressively tightening monetary policy;


### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; ### 9. observes that there is little evidence that rising inflation is spurring a wage-price spiral , not least given the extent of wage restraint in recent years; highlights that , according to the ecb survey of professional forecasters (spf) for the third quarter of 2022 , hicp inflation expectations remain well-anchored at 2.1%for 2024 and at 2.2% for 2027; is concerned about the widening gap between prices and wage growth , which is leading to a sharp decrease in real wages;


### 10. recalls that the ecb strategy review reconfirmed the medium-term orientation of inflation targeting; calls on the ecb to faithfully target this medium-term horizon; ### 10. recalls that the ecb strategy review reconfirmed the medium-term orientation of inflation targeting; calls on the ecb to faithfully target this medium-term horizon; believes that the absence of a definition of "medium-term" and the lack of an arithmetic reference complicate the interpretation of the deviations from the medium-term target; notes that the medium-term orientation of the monetary policy strategy allows for inevitable short-term deviations of inflation from the target;


### 10. recalls that the ecb strategy review reconfirmed the medium-term orientation of inflation targeting; calls on the ecb to faithfully target this medium-term horizon; ### 10. recalls that the ecb strategy review reconfirmed the medium-term orientation of inflation targeting; calls on the ecb to faithfully target this medium-term horizon; calls on the ecb to monitor attentively price developments and its consequences. highlights the need to inform about where neutral interest rate is setting;


### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; notes the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions that are due under the pandemic emergency purchase programme; welcomes the launch of the transmission protection instrument to support the effective transmission of monetary policy across the euro area; ### 12. stresses that an even transmission of monetary policy is vital to the achievement of the ecb’s price stability mandate; welcomes the ecb’s decision on 15 june 2022 to apply flexibility in reinvesting redemptions that are due under the pandemic emergency purchase programme; welcomes the launch of the transmission protection instrument to ecb´s toolkit to support the effective transmission of monetary policy across the euro area and normalise the monetary policy; notes that compliance with the eu fiscal framework is pre-requisite for tpi´s activation; calls on ecb to take into account that the general escape clause is activated; calls for a more clear tpi´s framework and rules of procedure when the general escape clause is activated;


### 13. notes with concern that the combination of cheap targeted longer-term refinancing operations (tltros) and higher interest rates allow european banks to earn billions in extra profit; regrets the fact that the ecb has not yet addressed this issue; ### 13. notes with concern that the combination of cheap targeted longer-term refinancing operations (tltros) and higher interest rates allow european banks to earn billions in extra profit and the risk of generating another “excess profit” case in eu with damaging social impact ; regrets the fact that the ecb has not yet addressed this issue and calls for concrete proposals to prevent excess profits in the banking system;


### 14. recalls that the treaty on the functioning of the european union requires the ecb to support the general economic policies of the union; ### 14. recalls that the treaty on the functioning of the european union requires the ecb to support the general economic policies of the union; which include balanced and sustainable economic growth , highly competitive social market economy aiming at full employment and social progress and convergences and a high level of protection and improvement of the quality of the environment , underlines that sustainable development , convergence , full employment and social progress are general objectives of the union as defined in article 3 of the tfeu;


### 15. calls on the ecb to coordinate with the european parliament to specify the secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on its secondary objectives; ### 15. calls on the ecb to coordinate with the european parliament to specify and how to implement the ecb´s secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on the basis of its secondary objectives; calls on the ecb to elaborate in its annual report the impact its monetary policy may have had on the general economic policies of the union; and how the ecb has integrated the parliament's views on the secondary objectives in its decision making process;


### 15. calls on the ecb to coordinate with the european parliament to specify the secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on its secondary objectives; ### 15. calls on the ecb to coordinate with the european parliament to specify and how to implement the ecb´s secondary objectives; suggests taking advantage of this resolution to specify and prioritise the policy areas where the ecb is expected to deliver on the basis of its secondary objectives; calls on the ecb to elaborate in its annual report the impact its monetary policy may have had on the general economic policies of the union;


### 17. underlines the pivotal role of small and medium-sized enterprises (smes) in the eu’s economy and economic and social convergence and employment; ### 17. underlines the pivotal role of small and medium-sized enterprises (smes) in the eu’s economy and economic and social convergence and employment and for the implementation of the twin transitions (digital and climate);


### 19. considers that the ecb should contribute to reducing inequality; calls on the ecb to ensure that the costs of its monetary policy operations are not disproportionately borne by lower income strata; invites the ecb to assess the effects of its monetary policy decisions on employment; ### 19. considers that the ecb should contribute to reducing inequality; calls on the ecb to ensure that the costs of its monetary policy operations are not disproportionately borne by lower income strata; calls for an assessment on the impact of the monetary policy decisions on these most vulnerable groups; invites the ecb to assess the effects of its monetary policy decisions on employment; notes that the ecb strategy review showed that adverse events lower the consumption of poorer households more than that of richer ones , that takes longer for the employment prospects of poorer households to recover following such events and that keeping monetary policy expansionary for longer can help poorer households’ income to rise to higher levels in a more sustained manner and thereby avoid hysteresis;


### 20. stresses that addressing the climate emergency and the euro area’s dependence on fossil fuels touches not only upon the ecb’s secondary mandate , but also its primary mandate , given the serious threat these issues pose to price stability; ### 20. highlights the ecb role to finance the climate transition and green agendas. stresses that addressing the climate emergency and the euro area’s dependence on fossil fuels touches not only upon the ecb’s secondary mandate , but also its primary mandate , given the serious threat these issues pose to price stability;


### 21. welcomes the governing council’s decision to take further steps to include climate change considerations in the eurosystem’s monetary policy framework; ### 21. welcomes the governing council’s decision to take further steps to include climate change considerations in the eurosystem’s monetary policy framework; welcomes the launch of the scoreboard for green bonds;


### 24. regrets that the climate roadmap does not include greening of the ecb’s targeted long-term refinancing operations; stresses that providing cheap liquidity to financial institutions investing in brown activities works against the fight against inflation and is not consistent with the objectives of the paris agreement; ### 24. regrets that the climate roadmap does not include greening of the ecb’s targeted long-term refinancing operations; stresses that providing favourable liquidity conditions to financial institutions investing in carbon intensive activities works against the fight against inflation and is not consistent with the objectives of the paris agreement;


### 25. is concerned about the implications of higher interest rates for green investments; calls on the ecb to assess the possibility of applying differentiated rates to support green investments and disincentivise brown investments; ### 25. is concerned about the implications of higher interest rates for strategic and sustainable investments; calls on the ecb to assess the possibility of applying differentiated rates to support investments that contribute most to reducing inflationary pressures , such as those in energy efficiency and renewables;


### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously; ### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; highlights that while the cost of taking action to fight climate change (transition risks) is evenly spread in the eu , the cost of inaction (climate risks) is borne by the warmer eu member states; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously and highlights specifically transition plans as good tools for this purpose; urges the ecb to make use of its powers to apply additional capital requirements in cases where a bank does not adhere to a climate-law aligned transition plan;


### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously; ### 26. welcome the ecb’s economy wide climate stress test developed to assess the resilience of banks and corporations for climate transition; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; notes that credit risks tend to be higher for mortgages collateralized with energy-inefficient houses , which could contribute to the build-up of future npls; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously including by integrating energy efficiency in their business strategy to prevent these risks to materialize;


### 26. welcomes the ecb climate risk stress test aimed at assessing the climate risk preparedness of the european banking sector; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously; ### 26. welcome the ecb’s economy wide climate stress test developed to assess the resilience of banks and corporations for climate transition ; is concerned that the results published on 8 july 2022 show that banks do not have robust climate risk stress-testing frameworks and lack the relevant data; calls on the ecb to use all its available tools to ensure that banks take climate risk seriously;


### 27. stresses the need to further enhance the ecb’s accountability and transparency arrangements; ### 27. stresses the need to further enhance the ecb’s accountability and transparency arrangements; recognises the steps taken by the ecb; calls for the relaunch of negotiations on a formal inter-institutional agreement , whilst ensuring the ecb’s independence which goes hand in hand with its accountability;


### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; ### 31. welcomes the ecb’s progress on the digital euro project , as well as the dialogue with parliament in this regard; looks forward to the governing council reaching a decision on launching the digital euro; calls on the ecb to effectively address the expectations and concerns on a digital euro which include concerns for privacy , security , usability , low cost and accessibility. calls on the ecb to step up its monitoring of the development of crypto-currencies and the related risks in terms of cybersecurity , money laundering , terrorism financing and other criminal activities related with the anonymity provided by crypto-assets;


### (4) eltifs have a potential to facilitate long-term investments in the real economy. long- term investments in projects , undertakings , and infrastructure projects in third countries can bring capital to eltifs and thereby benefit the economy of the union. such benefits can originate in multiple ways , including through investments that promote the development of border regions , enhance commercial , financial and technological cooperation and facilitate investments in environmental and sustainable energy projects. investments in third country qualifying undertakings and eligible assets may bring substantial benefits to investors and eltif managers and to the economies , infrastructure , climate and environmental sustainability and citizens of such third countries. it should therefore be allowed that the majority of such assets and investments or the main revenue or profit generation of such assets and investments are located in a third country. ### (4) eltifs have a potential to facilitate long-term investments in the real economy. long- term investments in projects , undertakings , and infrastructure projects in third countries can bring capital to eltifs and thereby benefit the economy of the union. such benefits can originate in multiple ways , including through investments that promote the development of border regions , enhance commercial , financial and technological cooperation and facilitate investments in environmental and sustainable energy projects. investments in third country qualifying undertakings and eligible assets may bring benefits to investors and eltif managers and to the economies , infrastructure , climate and environmental sustainability and citizens of such third countries and should therefore be allowed. however , the main objective of the eltif regulation is to channel capital towards european long-term investments in the real economy , and therefore a majority of the eltif assets and investments or the main revenue or profit generation of such assets and investments should be located within the union.


### (7) investments in commercial property , in facilities or installations for education , research , sports or development , or in housing , including in senior residents or social housing , should also be deemed to be eligible assets due to the capacity of such assets to contribute to the objectives of smart , sustainable and inclusive growth. to enable real investment strategies in areas where direct investments in real assets are not possible or uneconomical , eligible investments in real assets should also comprise investments in water rights , forest rights , building rights and mineral rights. ### (7) investments in commercial property , in facilities or installations for education , research , sports or development , or in housing , including in senior residents or social housing , should also be deemed to be eligible assets due to the capacity of such assets to contribute to the objectives of smart , sustainable and inclusive growth. to enable real investment strategies in areas where direct investments in real assets are not possible or uneconomical , eligible investments in real assets should also comprise investments in water rights , forest rights , building rights and mineral rights. eligible investment assets should exclude speculative investment assets , such as art , manuscripts , jewellery or other similar types of investment assets , which do not represent long-term investments in the union's real economy.


### (9) it is necessary to increase the attractiveness of eltifs for asset managers and broaden the range of investment strategies available to eltif managers and thus to avoid the undue limitation of the scope of the eligibility of assets and investment activities of eltifs. the eligibility of real assets should not depend on their nature and objective or upon environmental , sustainability or social and governance related disclosures and conditions , which are already covered by regulation (eu) 2019/2088 of the european parliament and of the council12 and by regulation (eu) 2020/852 of the european parliament and of the council13 . ### deleted


### (13) due to concerns that fund-of-funds strategies can give rise to investments that would not fall within the scope of eligible investment assets , regulation (eu) 2015/760 currently contains restrictions on investments in other funds throughout the eltif’s life. fund-of-fund strategies are , however , a common and very effective way of obtaining rapid exposure to illiquid assets , in particular in respect of real estate and in the context of fully paid-in capital structures. it is therefore necessary to give eltifs the possibility to invest in other funds , because that would enable eltifs to ensure a faster deployment of capital. facilitating fund-of-fund investments by eltifs would also allow reinvestment of excess cash into funds as different investments with distinct maturities may lower the cash drag of the eltif. it is therefore necessary to expand the eligibility of funds-of-funds strategies for eltif managers beyond investments in european venture capital funds (euvecas) or european social entrepreneurship funds (eusefs). the scope of collective investment undertakings in which eltifs can invest should thus be broadened to undertakings for collective investment in transferable securities (ucits) and to eu alternative investment funds (eu aifs) managed by eu aif managers. however , in order to ensure effective investor protection , it is also necessary to set out that where an eltif invests in other eltifs , in european venture capital funds (euvecas) , in european social entrepreneurship funds (eusefs) , in ucits and eu aifs managed by eu aifms , those collective investment undertakings should also invest in eligible investments and have not themselves invested more than 10 % of their capital in any other collective investment undertaking. ### (13) due to concerns that fund-of-funds strategies can give rise to investments that would not fall within the scope of eligible investment assets , regulation (eu) 2015/760 currently contains restrictions on investments in other funds throughout the eltif’s life. fund-of-fund strategies are , however , a common and very effective way of obtaining rapid exposure to illiquid assets , in particular in respect of real estate and in the context of fully paid-in capital structures. it is therefore necessary to give eltifs the possibility to invest in other funds , because that would enable eltifs to ensure a faster deployment of capital. facilitating fund-of-fund investments by eltifs would also allow reinvestment of excess cash into funds as different investments with distinct maturities may lower the cash drag of the eltif. it is therefore necessary to expand the eligibility of funds-of-funds strategies for eltif managers beyond investments in european venture capital funds (euvecas) or european social entrepreneurship funds (eusefs). the scope of collective investment undertakings in which eltifs can invest should thus be broadened to undertakings for collective investment in transferable securities (ucits) and to eu alternative investment funds (eu aifs) managed by eu aif managers. however , in order to ensure effective investor protection , it is also necessary to set out that where an eltif invests in other eltifs , in european venture capital funds (euvecas) , in european social entrepreneurship funds (eusefs) , in ucits and eu aifs managed by eu aifms , those collective investment undertakings should also invest in eligible investments and have not themselves invested more than 10 % of their capital in any other collective investment undertaking. while facilitating fund-of-fund investments by eltifs could provide potential investors with higher levels of diversification and lower volatility , it is important to ensure that such strategies do not lead to an excessive layering of fees for retail investors investing in fund-of-fund strategies.


### (16) unlike retail investors , professional investors may , in certain circumstances , have a longer time horizon , distinct financial returns objectives , more expertise , possess higher risk tolerance to adverse market conditions and higher capacity to absorb losses. such professional thus require less investor protection measure than retail investors. it is therefore appropriate to remove the diversification requirements for eltifs that are solely marketed to professional investors. ### (16) unlike retail investors , professional investors may , in certain circumstances , have a longer time horizon , distinct financial returns objectives , more expertise , possess higher risk tolerance to adverse market conditions and higher capacity to absorb losses. such professional inverstors thus require a different set of investor protection measures as compared to retail investors. it is therefore appropriate to remove the diversification requirements for eltifs that are solely marketed to professional investors.


### (18) article 30 of regulation (eu) 2015/760 also requires eltif managers or distributors to provide appropriate investment advice when marketing eltifs to retail investors. the lack of precision in what constitutes appropriate investment advice in regulation (eu) 2015/760 and the lack of a cross-reference to directive 2014/65/eu , which contains a definition of investment advice , have led to a lack of legal certainty and confusion among eltif managers and distributors. in addition , the obligation to provide investment advice would require external distributors to be authorised under directive 2014/65/eu when marketing eltifs to retail investors. that would create unnecessary impediments to the marketing of eltifs to those investors. the distribution and marketing of eltifs should not be subject to stricter requirements than the distribution of other complex financial products , including the requirements for securitisations laid down in regulation (eu) 2017/2402 of the european parliament and of the council17 and for subordinated eligible liabilities laid down in directive 2014/59 of the european parliament and of the council18 . the obligation to perform a suitability test is sufficient to provide retail investors with the necessary protection and is in line with the existing obligations laid down regulation (eu) 2017/2402 and directive 2014/59. it is therefore not necessary to require distributors and managers of eltifs to provide retail investors with that investment advice. ### (18) article 30 of regulation (eu) 2015/760 also requires eltif managers or distributors to provide appropriate investment advice when marketing eltifs to retail investors. the lack of precision in what constitutes appropriate investment advice in regulation (eu) 2015/760 and the lack of a cross-reference to directive 2014/65/eu , which contains a definition of investment advice , have led to a lack of legal certainty and confusion among eltif managers and distributors. although the obligation to provide investment advice would require external distributors to be authorised under directive 2014/65/eu when marketing eltifs to retail investors , the distribution and marketing of eltifs should not be subject to stricter requirements than the distribution of other complex financial products , including the requirements for securitisations laid down in regulation (eu) 2017/2402 of the european parliament and of the council17 and for subordinated eligible liabilities laid down in directive 2014/59 of the european parliament and of the council18 . the obligation to perform , communicate the result of , and obtain a positive outcome to , the suitability test is sufficient to provide retail investors with the necessary protection and is in line with the existing obligations laid down regulation (eu) 2017/2402 and directive 2014/59.


### (25) leverage is frequently used to enable the day-to-day operation of an eltif and to carry out a specific investment strategy. moderate amounts of leverage can amplify returns , and , where controlled adequately , without incurring or exacerbating excessive risks. in addition , leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. since the borrowing of cash threshold is currently limited to 30% of the capital of the eltif , eltif managers may be unable to successfully pursue certain investment strategies , including in the case of investments in real assets , where using higher levels of leverage is an industry norm or is otherwise required to achieve attractive risk-adjusted returns. it is therefore appropriate to increase the flexibility of managers of eltifs to raise further capital during the life of the eltif. in view of the possible risks that leverage can entail , eltifs marketed to retail investors should be permitted to borrow cash amounting to up to 50 % of the value of the capital of the eltif. the 50 % threshold is appropriate given the overall borrowing of cash limits common for funds investing in real assets with a similar liquidity and redemption profile. as for eltifs marketed to professional investors , however , a higher leverage threshold should be permitted , because professional investors have a higher risk-tolerance than retail investors. the borrowing of cash threshold for eltifs that are marketed to professional investors only should therefore be extended to 100 % of the eltif capital. ### (25) leverage is frequently used to enable the day-to-day operation of an eltif and to carry out a specific investment strategy. moderate amounts of leverage can amplify returns , and , where controlled adequately , without incurring or exacerbating excessive risks. in addition , leverage can frequently be used by a variety of collective investment undertakings to gain additional efficiencies or operational results. in view of the possible risks that leverage can entail , eltifs marketed to retail investors should be permitted to borrow cash amounting to up to 30 % of the value of the capital of the eltif. the 30 % threshold is appropriate given the overall borrowing of cash limits common for funds investing in real assets with a similar liquidity and redemption profile. as for eltifs marketed to professional investors , however , a higher leverage threshold should be permitted , because professional investors have a higher risk-tolerance than retail investors. the borrowing of cash threshold for eltifs that are marketed to professional investors only should therefore be extended to 100 % of the eltif capital.


### (28) given the increase of the maximum thresholds for borrowing cash by eltifs and the removal of certain limitations on the borrowing of cash in foreign currencies , investors should have more comprehensive information on the borrowing strategy and limits employed by the eltif. it is therefore appropriate to require eltif managers to explicitly disclose in the prospectus of the eltif concerned the borrowing strategy and the borrowing limits and to provide information on how leverage will contribute to the eltif strategy and how currency and duration risks will be mitigated. ### (28) given the increase of the maximum thresholds for borrowing cash by eltifs marketed solely to professional investors and the removal of certain limitations on the borrowing of cash in foreign currencies , investors should have more comprehensive information on the borrowing strategy and limits employed by the eltif. it is therefore appropriate to require eltif managers to explicitly disclose in the prospectus of the eltif concerned the borrowing strategy and the borrowing limits and to provide information on how leverage will contribute to the eltif strategy and how currency and duration risks will be mitigated.


### (31) article 19(1) of the current version of regulation (eu) 2015/760 requires that the rules or instruments of incorporation of an eltif do not prevent units or shares of the eltif from being admitted to trading on a regulated market or on a multilateral trading facility. despite that possibility , eltif managers , investors and market participants have hardly used the secondary trading mechanism by for the trading of shares or units of eltifs. to promote the secondary trading of eltif units or shares , it is appropriate to allow eltif managers to put in place a possibility for an early exit of eltif investors , before the end of the eltif’s life. in order to ensure an effective functioning of such a secondary trading mechanism , such an early exit should be possible only where the manager of the eltif has put in place a policy for matching potential investors and exit requests. that policy should , among others , specify the transfer process , the role of the eltif manager and the eltif administrator , the duration of the liquidity window during which the units or shares of the eltif could be exchanged , the execution price , pro-ration conditions , disclosure requirements , fees , costs and charges and other conditions pertaining to such a liquidity window mechanism. ### (31) article 19(1) of the current version of regulation (eu) 2015/760 requires that the rules or instruments of incorporation of an eltif do not prevent units or shares of the eltif from being admitted to trading on a regulated market or on a multilateral trading facility. despite that possibility , eltif managers , investors and market participants have hardly used the secondary trading mechanism by for the trading of shares or units of eltifs. to promote the secondary trading of eltif units or shares , it is appropriate to allow eltif managers to put in place a possibility for an early exit of eltif investors , before the end of the eltif’s life. in order to ensure an effective functioning of such a secondary trading mechanism , such an early exit should be possible only where the manager of the eltif has put in place a policy for matching potential investors and exit requests. that policy should , among others , specify the transfer process , the role of the eltif manager and the eltif administrator , the duration of the liquidity window during which the units or shares of the eltif could be exchanged , the execution price , pro-ration conditions , disclosure requirements , fees , costs and charges and other conditions pertaining to such a liquidity window mechanism. in order to avoid any misperception by retail investors regarding the legal nature of , and the liquidity that is potentially created by , the policy for matching under the optional liquidity window mechanism , the manager of the eltif or the distributor should issue a clear written alert to the retail investor that the availability of such a matching policy does not guarantee a match or entitle retail investors to exit or redeem their units or shares of the eltif concerned.