COMMISSION OF THE EUROPEAN COMMUNITIES 
COM (89) 578 final - SYN 133 
Brussels, 15 November 1989 
REEXAMINED PROPOSAL FOR A 
COUNCIL DIRECTIVE 
ON A SOLVENCY RATIO FOR 
CREDIT INSTITUTIONS 
(presented by the Commission pursuant to 
Article 149(2)(d) of the EEC Treaty) 
GW 0 8 
REEXAMINED PROPOSAL 
FOR A COUNCIL DIRECTIVE 
ON A SOLVENCY RATIO FOR CREDIT INSTITUTIONS 
Explanatory Memorandum 
1. The original proposal for a Council Directive on a Solvency ratio for 
Credit Institutions was submitted by the Commission to the Council on 
27 April 19881>. 
2. The Economic and Social Committee delivered its opinion2) on 27 October 
1988 and the European Parliament delivered its opinion3) on 15 March 
1989. 
3. Pursuant to Article 149(3) of the Treaty, the Commission submitted an 
amended proposal4) which largely took account of the proposed 
amendments. 
4. On 24 July 1989 the Council unanimously agreed on a common position5) 
on which the Council has delivered its reasons6) and the Commission its 
observâtions7^. 
5. The European Parliament had its second reeding on 25 October 1989 under 
the cooperation procedure arid voted in faveur of four amendements8). 
T) ÔJ Ki* C 155 of 25.5.1988, p.4 
2) OJ N° C 337 of 31.12.1988, p. 8 
3) OJ N° C 96 of 17.4.1989, p. 83 
4) OJ N° C 167 of 3.7.1989, p. 40 
5) The Council Doc. 7836/89 of 24.7.19» 
6) The Council Doc. 7836/89, Add. 1 of 20.7.1989 and CON. 1 of 24.7.1989 
and CON. 2 of 25.10.1989 
7) Sec(89) 206 final - SYN 133 of 24.7.1989 
8) EP 135.514 
< 
- 2. -
6. The two first amendments adopted by the European Parliament concern the 
question of comito logy and they propose to use the management 
committee, procedure 11 B of the Council's decision of 13 July 19879). 
The Parliament rejected Art. 9(2) of the Council's common position in 
which the Council suggested the use of regularoty committee 
procedure III B. 
7. The Commission thought it appropriate to propose in all the banking 
directives the procedure of regulatory committee, procedure IMA of the 
Council's decision of 13 July 1967. This procedure gives the Commission 
ail the powers it needs and it is the only adequate procedure talcing 
into account the nature of the measures which will have to be taken. In 
the banking field, the implementing powers will not be used for a day-
to-day management, as it is the case in other sectors (e.g. agriculture) 
where the management committee procedure is appropriate. 
8. This is the reason why the Commission, although it welcomes the decision 
of the European Parliament to reject the position of the Council on 
Comitology, prefers to persist in its reexamined proposal and vigorously 
defend the regulatory committee version MIA. 
9. The third amendment adopted by the European Parliament proposes to 
prolong by five years and until 2001 the special derogation in Article 
11(4) which grants credit institutions the right to apply a 50% 
weighting on loans backed by mortgage on commercial properties. The 
Parliament argues that for reasons of competition this derogation should 
have the same length of time as the derogation in Article 11(5). The 
Commission can not accept this amendment for the reason that the latter 
derogation is a general one which all Member States can apply whereas 
the derogation in Article 11(4) only is included in order to help three 
Member States with specific problems. 
10 The last amendment is a textual improvement of Article 11(5) which the 
Commission is prepared to accept. 
Ô) ÔJ Na L 1Ô7 of 18.7.1987, p. 33 
0. 
REEXAMINED PROPOSAL 
FOR A COUNCIL DIRECTIVE 
ON A SOLVENCY RATIO FOR CREDIT INSTITUTIONS 
Common position of the Council Reexamined proposal of the Commission 
Recitals 1 to 13 unchanged 
14th Recital 14th Recital 
Whereas technical modifications to the 
detailed rules contained in this 
directive may from time to time be 
necessary to respond to new developments 
in the banking sector; whereas the 
Commission shall accordingly make such 
modifications as are necessary, after 
consulting the Banking Advisory 
Committee, within the limits of the 
implementing powers delegated to the 
Commission by the provisions of the 
Treaty; whereas that Committee shall act 
as a 'Regulatory' Committee, according 
to the rules of procedure laid down in 
Article 2, procedure Mi, variant (b) of 
Council Decision 87/373/EEC of 13 July 
1987 laying down procedures for the 
exercise of implementing powers 
conferred on the CornaitssIon3); Whereas technical modifications to the 
detailed rules contained in this directive 
may from time to time be necessary to 
respond to new developments in the banking 
sector; whereas the Commission shaii 
accordingly make such modifications as are 
necessary, after consulting the Banking 
Advisory Committee, within the limits of 
the implementing powers delegated to the 
Commission by the provisions of the 
Treaty; whereas that Committee shaii act 
as a 'Regulatory' Committee, according to 
the) rules of procedure laid down in 
Article 2, procedure III, variant (a) of 
Council Decision 87/373/EEC of 13 July 
1987 laying down procedures for the 
exercise of implementing powers conferred 
orr the Commission3) 
3) ÔJ No L 197, 18.7.1987, p. 33 3) OJ NO L 197, 18.7.1987, p. 33 
- 2 -
Common position of the Council Reexamined proposal of the Commission 
Articles 1 to 8: unchanged 
Article 9(1): unchanged 
Article 9(2) Article 9(2) 
2. The Commission shall be assisted by a 
committee composed of representatives of 
the Member States and chaired by a 
representative of the Commission. 2. The Commission shall be assisted by a 
committee composed of representatives of 
the Member States and chaired by a 
representative of the Commission. 
The Commission representative shall 
submit to the committee a draft of the 
measures to be taken. The committee 
shall deliver its opinion on the draft 
within a time limit which the chairman 
may lay down according to the urgency of 
the matter. The opinion shall be 
delivered by the majority laid down in 
Article 148(2) of the Treaty in the case 
of decisions which the Council is 
required to adopt on a proposal from the 
Commission. The votes of the 
representatives of the Member States in 
the committee shall be weighted in the 
manner set out in that Article. The 
Chairman shall not vote. 
The Commission shall adopt the measures 
envisaged if they are in accordance with 
the opinion of the Committee. The Commission representative shall submit 
to the committee a draft of the measures 
to be taken. The committee shall deliver 
its opinion on the draft within a time 
limit which the chairman may lay down 
according to the urgency of the matter. 
The opinion shall be delivered by the 
majority laid down in Article 148(2) of 
the Treaty in the case of decisions which 
the Council is required to adopt on a 
proposal from the Commission. The votes of 
the representatives of the Member states 
in the committee shall be weighted in the 
manner set out in that Article. The 
Chairman shall not vote. 
The Commission shall implement the 
envisaged measures when they are in 
conformity with the opinion of the 
Committee. 
5" 
- 3 -
Common position of the Council 
If the measures envisaged are not in 
accordance with the opinion of the 
committee, or if no opinion is 
delivered, the Commission shall, without 
delay, submit to the Council a proposal 
relating to the measures to be taken. 
The Council shall act by a qualified 
major ity. 
If the Council does not act within three 
months of the referral to it the 
Commission shall adopte the measures 
adopted, unless the Council has decided 
against those meausres by a simple 
major ity. Reexamined proposal of the Commission 
When the envisaged measures do not confirm 
with the opinion of the Committee, or in 
the absence of an opinion, the Commission 
shall without delay submit to the Council 
a proposal relating to the measures to 
take. The Council shall act according to 
qualified majority voting. 
If at the end of the period which will be 
set in the case of each decision to be 
taken by the Council as a result of this 
paragraph, a period which must not exceed 
three months from the day on which the 
Council was informed, the Council has not 
acted, the Commission shall implement the 
proposed measures. 
Articles 10 to 11(4) unchanged 
Article 11 Article 11 
5. 50% for property leasing transactions 
concluded within ten years of the date 
laid down in Article 12(1) and 
concerning assets for business use 
situated in the country of the head 
office and governed by statutory 
provisions whereby the lessor retains 
full ownership of the rented asset until 
the tenant exercises his option to 
purchase. 5. The Member States may apply a weighting 
of 50% in respect of property leasing 
transactions concluded within ten years of 
the date laid down in Article 12(1) and 
concerning assets for business use 
situated in the country of the head office 
and governed by statutory provisions 
whereby the lessor retains full ownership 
of the rented asset until the tenant 
exercises his option to purchase. 
Articles 12 and 13: unchanged 
/.; 
Amendments proposed 
by the European Parliament 
but rejected 
by the Commission 
f 
Solvency ratio for credit institutions 
Doc. A 3-45/89 
DECISION 
(COOPERATION PROCEDURE : second reading) 
on the common position of the Council with a view to the adoption of a 
directive on a solvency ratio for credit institutions 
The European Parliament, 
having regard to the common position of the Council (Doc. C 3-17/89 - SYN 
133) 
having regard 'to the relevant provisions of the EEC Treaty and its Rules of 
Procedure, 
1. Has amended the common position as set out below; 
2. Has instructed its President to forward this decision to the Council and 
Commission. 
Common position of the Council Amendments adopted by Parliament 
(Amendment No. 1) 
Fourteenth recital 
Whereas technical modification to the 
detailed rules contained in this 
directive may from time to time be 
necessary to respond to new 
developments in the banking sector; 
whereas the Commission shall 
accordingly make such modifications 
as are necessary, after consulting 
the Banking Advisory Committee, 
within the limits of the implementing 
powers delegated tc the Commission by 
the provisions of the Treaty; whereas 
t.?-.-nt Committee shall act as a 
'Regulatory' Committee, according to 
z'r.e rules of procedure, laid down in 
article 2, procedure III, variant (a) 
of Council Decision 87/373/EEC of 
13 July 1987 laying down procedures 
for the exercise of implementing 
powers conferred on the Commission; Whereas technical modification to 
the detailed rules contained in this 
directive may from time to time be 
necessary to respond to new 
developments in the banking sector; 
whereas the Commission shall 
accordingly make such modifications 
as are necessary, being assisted by 
a committee composed of the 
representatives of the Member States 
and chaired by the representative 
of the Commission; whereas 
appropriate measures shall be 
adopted in accordance with procedure 
II, variant (b) set out in Article 2 
of Council Decision 87/373/EEC of 
13 July 1987; 
- 1 -(Amendment No. 2) 
Article 9(2), third, fourth and 
fifth subparagraphs 
PL 135.802 
i 
The Commission shall adopt the 
measures envisaged if they are in 
accordance with the opinion of the 
committee. 
I_i_ the measures envisaged are not in 
accordance with the opinion of the 
committee, or if no opinion is 
delivered, the Commission shall, 
without delay, submit to the Council 
a proposal concerning the measures to 
be taken. The Council shall act by a 
qualified majority. The Commission shall adopt measures 
which shall be immediately 
applicable. However, where they do 
not conform with the opinion of the 
Committee, the Commission shall 
without delay communicate them to 
the Council. 
In this event the Commission shall 
defer application of the measures ic 
has adopted for a time-limit which 
may in no case exceed three months 
from the date of the communication. 
If the Council does not act within 
three months of the referral to it 
the Commission shall adopt the 
measures proposed, unless the Council 
has decided against those measures by 
a simply majority. The Council, acting by a gualified 
majority, may take a different 
decision within the time-limit laid 
down in the preceding paragraph. 
(Amendment No. 3) 
Article 11(4) 
By derogation from 
Article 6(l)(c)(l), until 
1 January 1996 Germany, Denmark 
and Greece may apply a weighting 
of 50% to assets which are 
entirely and completely secured to 
the satisfaction of the competent 
authorities concerned, by 
mortgages on completed residential 
property, on offices or on multi­
purpose commercial premises, 
situation within the territories 
of those three Member States, 
provided that the sum borrowed 
does not exceed 60% of the value 
of the property in question, 
calculated on the basis of 
rigorous assessment criteria laid 
dcwn in statutory or regulatory 
provisions. 4. By derogation from 
Article 6(l)(c)(l), until 
1 January 2001 Member States 
may apply a weighting of 50% 
to assets which are entirely 
and completely secured to the 
satisfaction of the competent 
authorities concerned, by 
mortgages on offices or on 
multi-purpose commercial 
premises, situation within the 
territory of the European 
Community, provided that the 
sum borrowed does not exceed 
60% of the value of the 
property in question, 
calculated on the basis of 
rigorous assessment criteria 
laid down in statutory or 
regulatory provisions, and 
provided that the holder of 
the mortgage ranks before any 
other creditor in respect of 
the mortgaged property. 
- 2 - PE 135.802 
3 

ISSN 0254-1475 
COM(89) 578 final 
DOCUMENTS 
EN 18 
Catalogue number : CB-CO-89-533-EN-C 
ISBN 92-77-54954-8 
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