* it COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 27.06.1997 
COM(97) 285 final 
96/0121 (COD) 
Amended proposal for a 
ELOBQESAN PARLIAMStgl^WP COUNCIL PIFJBCTIVE 
AMENDING ARTICLE 12 OF DIRECTIVE 77/780/EEC ON THE 
COORDINATION OF LAWS, REGULATIONS AND ADMINISTRATIVE 
PROVISIONS RELATING TO THE TAKÏNG-UP AND PURSUIT OF THE 
BUSINESS OF CREDIT INSTITUTIONS, 
ARTICLES 2,5,6, 7, 8 AND ANNEXES II AND III OF DIRECTIVE 89/647/EEC 
ON A SOLVENCY RATIO FOR CREDIT INSTITUTIONS, 
ARTICLE 2 AND ANNEX II OF DIRECTIVE 93/6/EEC ON THE CAPITAL 
ADEQUACY OF-INVESTMENT FIRMS AND CREDIT INSTITUTIONS 
(COM(96)183 fmaI/2 - C4 - 0258/96 - 96/0121(COD)) 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC-Treaty) 

EXPLANATORY MEMORANDUM 
I. INTRODUCTION 
The proposal for a Directive concerned by this amended proposal was submitted to Parliament and 
the Council on 30 April 1996 pursuant to Articles 189b(2) and 57(2) of the EC Treaty. 
The Economic and Social Committee handed down a favourable opinion at its 338th plenary 
session on 25 September 1996. One of its two suggestions (concerning the amendment to 
Article 8(1) of Directive 89/647/EEC) has been incorporated into the amended proposal, 
Parliament having adopted an amendment to that effect. 
Parliament adopted (first reading) the legislative resolution giving its opinion on the proposal for a 
Directive (COM(96) 183 final 2 - C4 - 0258--96/121 (COD)) at its sitting on 10 April 1997 
(EP 258.436/181). 
Parliament's opinion comprises two amendments; both have been included in this amended 
proposal. 
II. COMMENTS ON THE AMENDMENTS 
Parliament called on the Commission to amend two points in the proposal for a Directive. The 
Commission considers the two amendments to be acceptable. 
1. The first amendment merely rectifies a shortcoming in the initial proposal. It aligns 
Article 5(3) of Directive 89/647/EEC on the proposed text by stating that it applies to all the 
items listed in the new Annex III. 
2. The second amendment concerns Article 7(3) of the proposal. It specifies that the Member 
States continue to have the option of applying a weighting of 20% to collateral in the form of 
securities issued by Zone A regional governments or local authorities. 
This amendment is altogether relevant and makes the proposal clearer. Article 7 of the 
proposal is designed to include, as security to which a zero weighting may be applied, 
collateral in the form of securities issued by regional governments or local authorities since 
Article 8(1 ) of Directive 89/647/EEC already provides for a weighting of 20%. Deleting the 
clause "other than those of the Member States" makes it clear that the latter can continue to 
apply a weighting of 20% and that zero weighting is possible only if the conditions laid down 
in Article 7 of Directive 89/647/EEC are met. 
X. 
AMENDED PROPOSAL FOR A EUROPEAN PARLIAMENT AND COUNCIL 
DIRECTIVE AMENDING ARTICLE Î2 OF DIRECTIVE 77/780/EEC ON THE 
COORDINATION OF LAWS, REGULATIONS AND ADMINISTRATIVE 
PROVISIONS RELATING TO THE TAKING-UP AND PURSUIT OF THE 
BUSINESS OF CREDIT INSTITUTIONS, 
ARTICLES 2, 5, 6, 7, 8 AND ANNEXES II AND III OF DIRECTIVE 89/647/EEC 
ON A SOLVENCY RATIO FOR CREDIT INSTITUTIONS, 
ARTICLE 2 AND ANNEX II OF DIRECTIVE 93/6/EEC ON THE CAPITAL 
ADEQUACY OF INVESTMENT FIRMS AND CREDIT INSTITUTIONS 
(COM(96)183 final/2 - C4 - 0258/96 - 96/0121(COD)) 
Text proposed by the Commission Amendments by Parliament 
Amendment 1 
Article 2a (new) 
Amendment to Article 5(3) 
The first sentence of Article 5(3) is 
replaced by the following; 
!!L In the case of the off-balance-sheet 
items referred to in Article 6(3). the 
potential costs of replacing contracts in the 
event of counterparty default shall be 
calculated bv means of one of the two 
methods set out in Annex II." 
3 
Text proposed by the Commission Amendments by Parliament 
Amendment 2 
Article 7(3) Article 7(3) 
3. The Member States may apply a 1. Subject to Article 7(1). the Member 
weighting of 20% to asset items which are States may apply a weighting of 20% to 
secured, to the satisfaction of the asset items which are secured, to the 
competent authorities concerned, by satisfaction of the competent authorities 
collateral in the form of securities issued by concerned, by collateral in the form of 
Zone A regional governments or local securities issued by Zone A regional 
authorities other than those of the Member governments or local authorities, by 
States, by deposits placed with Zone A deposits placed with Zone A credit 
credit institutions other than the lending institutions other than the lending 
institution, or by certificates of deposit or institution, or by certificates of deposit or 
similar instruments issued by those credit similar instruments issued by those credit 
institutions. institutions. 
^ 
ISSN 0254-1475 
COM(97) 285 final 
DOCUMENTS 
EN 09 01 06 
Catalogue number : CB-CO-97-275-EN-C 
ISBN 92-78-21154-0 
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