15. 7. 82 Official Journal of the European Communities No C 178/15 
Opinion on the proposal for a Council Directive on the supervision of credit institutions 
on a consolidated basis 
The text referred to the Committee has been published in Official Journal of the Euro­
pean Communities No C 258 of 9 October 1981, page 5. 
A. LEGAL BASIS FOR THE OPINION 
On 7 October 1981 the Council referred the abovementioned proposal to the Econo­
mic and Social Committee in accordance with Article 198 of the Treaty establishing 
the European Economic Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 
197th plenary session held in Brussels on 28 and 29 April 1982. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, General comments 
Having regard to the Treaty establishing the Euro­
pean Economic Community, and in particular 
Article 198 thereof, 
Having regard to the request made by the Council 
of the European Communities on 7 October 1981 
for an opinion on the proposal for a Council Direc­
tive on the supervision of credit institutions on a 
consolidated basis, 
Having regard to the decision taken by the Com­
mittee Chairman on 15 October 1981, instructing the 
Section for Industry, Commerce, Crafts and Services 
to draw up an opinion on the matter, 
Having regard to the opinion adopted by the Sec­
tion for Industry, Commerce, Crafts and Services at 
its meeting on 31 March 1982, 
Having regard to the oral report made by the rap­
porteur, Mr de Bruyn, 
Having regard to its discussions during the 197th 
plenary session, held on 28 and 29 April 1982, 
HAS ADOPTED THE FOLLOWING OPINION 
unanimously: 
The Committee approves the proposal for a Direc­
tive, subject to the following comments: 1. The proposal constitutes an important step 
towards integration of the European capital mar­
kets; this is therefore a welcome move, but it should 
be stressed that true integration presupposes pro­
gress in other fields and, in particular, the harmoni­
zation of national regulations. 
2. It should be emphasized that the present pro­
posal concerns the information to be supplied to the 
supervisory authorities and is therefore distinct from 
the draft seventh Directive on group accounts, 
which relates to the information to be published, 
although there are certain links between the two 
proposals. -v 
3. However positive it may be, this new move does 
have its limitations, for example as regards the 
nature and amount of the information to be sup­
plied to the supervisory authorities in the different 
countries. Supervision, therefore, can only be on a 
restricted scale. Since this is a transitional stage, a 
certain degree of moderation is called for. It is clear, 
however, that there will have to be more extensive 
harmonization in the future. These points are inci­
dentally in keeping with the principles enunciated 
by the Commission itself (e.g. third recital, Article 1, 
Article 3 (2)). 
No C 178/16 Official Journal of the European Communities 15. 7. 82 
4. It is worth pointing out that consolidation, 
which has been made particularly necessary by the 
rapid internationalization of credit institutions, con­
sists in bringing together information on the activi­
ties of legally separate companies, i.e. of a parent 
company and its subsidiaries. The activities of 
branches of the same company, on the other hand, 
are of necessity covered in the accounts and statis­
tics of the institution of which they form part. 
5. Supervision on a consolidated basis is accepted 
in principle by the ten Member States and has even 
been advocated since 1979 by the Committee of 
Central Bank Governors of the Bank for Interna­
tional Settlements, although the use of consolidated 
information for supervisory purposes is not yet very 
widespread (apart from three Member States). 
Supervision on a consolidated basis is necessary in 
order to make the checks more effective, more cer­
tain and easier in the present context of internation­
alization, and to achieve better harmonization of the 
checks within the framework of a increasingly uni­
fied and competitive market. 
6. As regards the legal scope of the proposed 
Directive, it should be stressed that the new supervi­
sory technique provided for does not in any way 
alter the legal liability of the institution holding the 
participation on the one hand or that of the institu­
tion in which the participation is held on the other. 
7. The institutions covered by the proposed Direc­
tive are credit institutions and financial institutions 
in which the former have a substantial participation. 
Financial institutions are not defined sufficiently 
clearly in Article 1. The proposal should therefore 
be made more precise here, since otherwise it could 
apply to firms that should not come within the 
scope of the Directive on account of their specific 
activities. 
8. A definition should also be given of the term 
'competent authorities', which occurs in several 
places in the proposal and might in some cases give 
rise to confusion. 
9. As regards the attitude of the authorities in 
countries where a procedure for consultation with 
credit institutions is traditional, or even laid down 
by law, it should be understood that such a practice 
will remain in force on the basis of Article 3 (2). 
10. Relations with third countries will be based on 
bilateral agreements between each of these countries 
and the various Member States. In the commentary on Article 6 the Commission suggests that these 
agreements might be replaced by agreements 
between the Community as such and third coun­
tries. In the interests of rapid and effective harmoni­
zation it would be desirable to move as systemati­
cally as possible towards direct agreements between 
the Community and third countries. 
Specific comments 
1. Articlel 
1.1. The definition of 'financial institution' should 
be made clearer, and this could be done by incor­
porating phrases from the explanatory notes as fol­
lows: 
'an undertaking, not being a credit institution, 
whose principal activity is to grant credit facili­
ties (including guarantees) or to engage in other 
operations involving a banking-type risk, with­
out taking deposits form the public'. 
1.2. The participation should be at least 25%, 
which forms a blocking minority in certain coun­
tries. The figure of 20 % was in fact selected simply 
on the basis of the fourth Directive, whose objective 
is completely different from that of the present pro­
posal. 
1.3. This Article should also define 'competent 
authorities' as follows: 
' "Competent authorities" means the national 
authorities which are empowered by law or regu­
lation to supervise credit institutions'. 
2. Article 3 
2.1. Paragraph 1, first indent 
2.1.1. The 80 % will have to be replaced by 75 % if 
25 % is adopted as the minimum participation. This 
text is too brief to be easily understood and it will 
therefore have to be made more explicit. 
15.7.82 Official Journal of the European Communities NoC 178/17 
2.2. Paragraph 1, third indent 
2.2.1. The aim of this provision is to exclude in­
significant participations with a minimal risk. While 
the need to fix a limit is recognized, it must be 
stressed that expressing this limit in absolute terms 
as a specific sum does not seem to be sensible, since 
inflation is liable to make such a sum meaningless. 
If the limit is to be expressed as a percentage, the 
figure of 2 % would be much too low to be a realistic 
and useful yardstick for determining insignificant 
participations. 
2.3. Paragraph 1, fourth indent 
2.3.1. It would be desirable for the views of the 
parent company to be considered in determining to 
what extent it may be excluded. The text should 
therefore be amended to read: 
'... is such that, in the opinion of the competent 
authorities for the credit institution which holds 
the participation, having consulted the said credit 
institution, consolidation ...'. 
2.3.2. The Committee understands that this indent 
applies especially to institutions specializing in 
mortgage loans. The supervisory rules the institu­
tions are subject to at present are stricter than the 
provisions of the present Directive. The text should 
therefore be amended accordingly. 
3. Article 4 
3.1. Paragraph 1 
3.1.1. To avoid the gathering of data of no signifi­
cance for the supervision of groups, the text should 
be amended to read as follows: 
'... shall require, for the purposes of supervision, 
either...'. 
Done at Brussels, 28 April 1982. 3.2. Paragraph 2 
3.2.1. In order to prevent deadlock in the event of 
disagreement between the supervisory authorities, 
the second sentence should be amended to read: 
'... the competent authorities in the Member 
State in which the credit institution has its head 
office may, after consulting the competent auth­
orities for the credit or financial institution in 
which the participation is held, decide that con­
solidation ... is not required ...'. 
3.3. Paragraph 3 
3.3.1. This paragraph should be deleted, since it 
runs counter to the aim of harmonization. It allows 
too divergent action by the competent authorities of 
the various countries. 
4. Article 5 
4.1. Paragraph 4 
4.1.1. The Committee notes that the term verifica-
teur in the French text ('auditor' in the English text) 
has been replaced by reviseur. It wonders whether 
corresponding changes should not be made in the 
texts in the other Community languages. 
5. Article 7 
5.1. Paragraph 1 
5.1.1. To have as practicable as possible deadlines 
and to give the firms in question the time they need 
to gather information and adapt, the time limits 
should be as follows: 12 months after notification, 
for Member State compliance with the Directive; a 
second time limit of 12 months for the bringing into 
force of the provisions adopted by the Member 
States. 
The Chairman 
of the Economic and Social Committee 
Tom&s ROSEINGRAVE