3. 5. 82 Official Journal of the European Communities No C 112/17 
stock exchange listing, a proposal which the Committee 
generally supported subject to some specific 
modifications (1). 
The Committee agrees with the Commission that it would 
be logical to have the three Directives come into force in 
the Member States simultaneously. This would in fact 
mean a postponement of the introduction by Member 
(M OJ No C 53, 3. 3. 1980, p. 54. 
Done at Brussels, 25 February 1982. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 54 
thereof, 
Having regard to the request made by the Council of the 
European Communities on 9 April 1981 for an opinion 
on the proposal for a Council Directive on annual 
accounts of banks and other financial establishments, 
Having regard to the decision taken by its Bureau on 
10 April 1981 instructing the Section for Industry, 
Commerce, Crafts and Services to prepare an opinion and 
a report on the matter, 
Having regard to the opinion adopted by the Section for 
Industry, Commerce, Crafts and Services at its meeting 
held on 3 February 1982, 
Having regard to the report made by the rapporteur, 
Mr Miller, 
Having regard to the discussions at its 195th plenary 
session held on 24 and 25 February 1982 (meeting of 
24 February), States of Directives 79/279/EEC and 80/390/EEC 
since the earliest that the 'periodic information' 
Directive (2) will come into effect is 30 June 1983. 
Accordingly, therefore, the Committee can support this 
proposal. 
(2) Council Directive 82/121/EEC (OJ No L 48, 20. 2. 
1982). 
The Chairman of 
the Economic and Social Committee 
Tomas ROSEINGRAVE 
HAS ADOPTED THE FOLLOWING OPINION 
by 67 votes to 65, with three abstentions: 
A. General remarks 
1. The Committee agrees wholeheartedly with the 
Commission that credit institutions have a duty to inform 
staff, customers, shareholders and the public at large of 
all relevant information regarding their activities. 
However, although it agrees with the object of the draft 
proposal for the drawing up of the annual accounts of 
banks and financial institutions, it cannot, even with the 
best will in the world, endorse the Directive in its present 
form for the reasons set out in the next paragraph. 
2. The Committee objects particularly to the fact that 
the proposal takes the form of referential legislation, 
embodying many of the provisions of the Fourth Directive 
on company law. In the opinion of the Committee, 
referential legislation, as a general rule, is undesirable, 
because it: Opinion on the proposal for a Council Directive on annual accounts of banks and other 
financial establishments 
The text referred to the Committee has been published in Official Journal of the European 
Communities No C 130 of 1 June 1981, page 1. 
A. LEGAL BASIS FOR THE OPINION 
On 9 April 1981 the Council referred the abovementioned proposal to the Economic and Social 
Committee in accordance with Article 54 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 195th 
plenary session held in Brussels on 24 and 25 February 1982. 
No C 112/18 Official Journal of the European Communities 3. 5. 82 
(i) introduces additional complexity for those who are 
affected through having to keep in mind two 
documents when ordering their action; 
(ii) is likely to result in confusion, and possibly 
litigation, when certain provisions in the two 
Directives either conflict or, when taken together, 
are unclear, and 
(iii) might well create problems if the Fourth Directive 
were to be amended in such a way that such changes 
were incompatible with, or not appropriate for, 
credit institutions. However, the Committee does 
not agree with the suggestion made by some that any 
problem it sees arising from referential legislation 
can be adequately resolved when the Directive now 
under discussion is translated into the national 
legislation of Member States. . 
3. The Committee was not at all convinced by the 
Commission's reasons for not proposing a comprehensive 
separate Directive for the accounts of banks and other 
financial institutions. It certainly appreciates the 
Commission's attempt to clarify the position by 
submitting a working paper setting out details of the 
articles of the Fourth Directive believed to be applicable 
to banks and the like, but must point out that this 
document has no legal standing. Its existence, therefore, 
does nothing to change the Committee's view that a 
separate Directive should be drafted containing all the 
provisions which the Commission would seek to propose 
to achieve comparability in the form and content of the 
annual accounts of credit institutions. 
4. The Committee rests its case on the argument that 
the particular characteristics of credit institutions which 
are recognized by the Commission and which, 
presumably, led to their position not being discussed at 
the time when the Fourth Directive was being processed, 
continue to be valid. The continued existence of these 
particular characteristics leads the Committee to insist 
that in the matter of annual accounts, banks and other 
financial institutions should have regulatory legislation 
which applies only to them, even though this may mean 
that certain provisions of the Fourth Directive would have 
to be repeated. 
5. While rejecting the specific approach of the 
Commission, the Committee has the following comments 
to make on the proposed articles of the Commission 
document. 
B. Specific comments 
1. Article 1 
See 'General remarks'. 2. Article 2 
In view of the special nature of certain specialist 
institutions to which, in the opinion of the Committee, 
the draft Directive does not give sufficient consideration, 
the Committee suggests the addition of the following 
words - 'or such later date as the Council may decide' -
in Article 2 (4b) after '1 January 1988', so that further 
time, if necessary, could be given to consider whether 
their special nature might warrant particular 
treatment. 
3. Article 4 
The Section treats the shortcomings of the proposed 
Article 4 in some detail in its report. If the objective of the 
draft Directive is to be achieved, it is the general 
conclusion of the Committee that in view of the many 
credit institutions of different size and character situated 
in Member States whose circumstances differ 
substantially, flexibility in layout and sequence of items, 
and in the composition of certain items, is of paramount 
importance. To do other than to prescribe in general 
terms what has to appear in the balance sheet, leaving 
each Member State to choose its own order of liquidity, 
would, in the opinion of the Committee, lead to 
distortion and misrepresentation. 
4. Article 5 
The Committee would point out that the information 
required concerning claims on affiliated undertakings or 
on undertakings with which the credit institution is linked 
by virtue of a participating interest could affect the 
confidentiality of customers' affairs if there were only one 
affiliate or participating interest. To cover such cases 
provision should be made for an exception to the 
disclosure obligation. 
5. Article 8 
The Committee suggests that the correct term to be used 
in this Article is not 'legal title' but 'beneficial 
ownership'. 
6. Article 9 
As there are different views on which is the best base for 
constructing maturity analyses, and in view of the 
differing practices in Member States between financial 
and supervisory reporting, the Committee recommends 
that Member States should have some latitude in deciding 
for credit institutions within their jurisdiction which 
method of construction should be used in order to present 
a true and fair view. 
3. 5. 82 Official Journal of the European Communities NoC 112/19 
7. Article 10 
The Committee is of the view that the Commission should 
re-examine this Article concerned with sale and 
repurchase transactions, and to bear in mind the 
particular problems which can arise concerning 'true' and 
'false' transactions turning on the title of the asset 
involved. 
8. Article 11 
As the Commission's explanatory memorandum states 
that neither monetary policy nor banking supervisory 
requirements are to be taken into account when 
determining whether or not funds deposited with central 
banks are 'readily available', the Committee believes 
that such statement of intent shall be referred to in 
Article 11. 
9. Article 12 
The Committee is of the opinion that all items which are 
rediscountable with the central bank should be included 
within the provisions of this Article. 
10. Article 14 
The Committee recommends that this Article should 
include a separate heading for 'Items in course of 
collection'. 
11. Article 17 
In connection with Article 17 the Committee notes that 
there is no provision covering assets (Item 8). It considers 
that there should be, and therefore urges the Commission 
to draft a clause to cover this point which strikes a balance 
between the need to satisfy adequate disclosure 
requirements and the importance of preserving a degree 
of confidentiality. 
12. Article 26 
The Committee is of the opinion that it would be 
misleading to include figures relating to forward currency 
transactions, for the simple reason that apart from a small 
percentage which is disclosed to the supervisory 
authorities, they are covered. It therefore, recommends 
that the words 'foreign currencies' should be deleted at the 
end of line four of this Article. 
13. Articles 29 and 30 
The Committee's opinion on these Articles is similar to 
that expressed on Article 4. It, therefore, recommends 
that the same flexible attitude should be applied to the layout of the profit and loss account as it suggested should 
apply to the balance sheet. Specifically, it believes that: 
(i) because the margin is the important factor, provision 
should be made for net interest to be shown-, and (ii) in 
conformity with the recommendations on undisclosed 
reserves (see later), Items 8 and 9 in Article 29 (and 
similarly in Article 30) should be merged. 
14. Articles 34, 35, 36 and 37 
The Committee deals at length with these Articles in its 
report. The Committee agrees with the Commission that 
as there is a need for prudence, and because of their 
exposure to risks such as interest rate movements and 
political events over which they have no control as well as 
their special place in the economic and financial 
infrastructure, credit institutions should be permitted to 
maintain prudential reserves. Even so, the Committee 
believes that their level and the criteria on which they are 
based should be controlled. It believes however that the 
Commission has not yet proposed the right solution to 
this problem, if it is to be applied indiscriminately to all 
credit institutions. In urging the Commission to seek a 
different formula, the Committee would ask it to keep in 
mind the special problems of those credit institutions with 
relatively small loan portfolios but with, say, relatively 
heavy commitments in securities, foreign exchange, 
acceptances or other contingent liabilities. 
15. Articles 39 and 40 
Although well aware of the need to inform staff, 
customers, shareholders and the public at large about the 
affairs of banks and other credit institutions, the 
Committee is not wholeheartedly in agreement with the 
amount of detailed information which the Commission is 
seeking to exact from them. In coming to this decision, 
the Committee was mindful of the large degree to which 
such institutions are already supervised and controlled by 
the central banks and other regulatory authorities. 
16. Specifically, the Committee recommends that: 
— the information required in Article 39 (2) should not 
be published in such detail, 
— Article 39 (4) should require only an approximate 
percentage to be shown, based on the balance sheet 
and not the profit and loss account, 
— Article 39 (5) should not apply to credit institutions, 
whose normal business is to grant loans, provided the 
loans in question are at normal conditions. 
17. The Committee is also of the opinion that: 
— the breakdown between 'listed' and other securities 
(Article 40 (2) (a)) is not relevant (the only test 
necessary being 'marketability'), 
No C 112/20 Official Journal of the European Communities 3. 5. 82 
18. Finally, the Committee wishes this opinion to be 
considered materially as a whole with the accompanying 
report, and reiterates its wish that the Commission should 
draft a separate Directive dealing with the annual 
accounts of banks and other financial institutions. 
The Chairman of 
the Economic and Social Committee 
Tomas ROSEINGRAVE 
ANNEX 
to the opinion of the Economic and Social Committee 
I. VOTING ON THE OPINION 
The following members, present or represented, voted in favour of the opinion: 
Mr Ammundsen, Mr Arena, Mr Bagliano, Mr Berrigni, Mr Bernaert, Mr Berns, Mr Blamoutsis, Mr Blasig, 
Mr Bredima, Mr Breitenstein, Mr Broicher, Sir Richard Butler, Mr de Caffarelli, Mr Cammann, 
Mr van Campen, Mr Clavel, Mr du Closel, Mr Couture, Mr Daul, Mr De Bievre, Mr De Bruyn, Mr De 
Tavernier, Mr Doble, Mr Evain, Mr Gallacher, Mr Gingembre, Mr Hall, Mr Hemmer, Mr Hennig, Mr 
Hicks-Beach, Mr Jakobsen, Mr Jonker, Mr Kenna, Mr Kolbenschlag, Mr Lane, Mr Lauga, Mr Laur, Mr 
Leddy, Mr Leo, Mr Loebl, Mr Loughrey, Mr Margot, Mr Marvier, Mr Masprone, Mr Miller, Mr Mills, 
Mr Morselli, Mr Paggi, Mr Papadopoulos, Mr Pearson, Mr de Precigout, Mr Renaud, Mr Rizos, Mr 
Rollinger, Mr Romoli, Mr Savini, Mr Schnieders, Mr Seydaack, Mr Sloman, Mr Staratzke, Mr Storm 
Hansen, Mr van der Veen, Mr Wagner, Mr Wick, Mr Wylie, Mr Zinkin, Mr Zunkler. 
The following members, present or represented, voted against the opinion: 
Mr Basnett, Mr Beretta, Mr Boddy, Mr Bonety, Mr Bornard, Mr Buckton, Mr Cavazzuti, Mr Chappie, Mr 
Chronopoulos, Mrs Clark, Mr Colymvas, Mr Cremer, Mr Curlis, Mr Dassis, Mr Debunne, Mr De Grave, 
Mr Delourme, Mr von der Decken, Mrs Engelen-Kefer, Mr Etty, Mr Fredersdorf, Mr Friedrichs, Mr 
Glesener, Mrs Gredal, Mr van Greunsven, Mr Hilkens, Mr Houthuys, Mr Jaschick, Mr Jenkins, Mr 
Karakitsos, Mr Kirschen, Mr Laval, Mr Loccufier, Mr Masucci, Mr Meraviglia, Mr Militello, Mr Milne, 
Mr Muhr, Mr Murphy, Mr Neumann, Mr Nielsen B., Mrs Nielsen M., Mr Nielsen P., Mr Nierhaus, Mr 
Ognibene, Mr Patterson, Mr Pfeiffer, Mr Piga, Mr Pronk, Mr Querini, Mr van Rens, Miss Roberts, Mr 
Rouzier, Mr Saitis, Mr Scalia, Mr Scharrenbroich, Mr Schneider, Mr Sorensen, Mr Soulat, Mrs Strobel, 
Mr Theisen, Mr Vanni, Mr Wagenmans, Mrs Weber, Mr Zoli. 
The following members, present or represented, abstained: 
Mr Goris, Mrs Heuser, Mr Rainero. 
II. REJECTED AMENDMENTS 
The following amendments, tabled in accordance with the Rules of Procedure, were rejected in the course 
of the Committee's debate: 
Points 1 to 5 of the 'General remarks' on pages 1 to 3 of the opinion are to be replaced by the 
following: 
'The Section agrees wholeheartedly with the Commission that credit institutions have a duty to inform 
staff, customers, shareholders and the public at large of all relevant information regarding their 
activities. It therefore agrees with the object of the draft Directive on the annual accounts of banks and 
other financial institutions and approves the proposal, subject to the comments set out below.' 
Reasons 
The call in the draft opinion for a separate Directive on the annual accounts of banks and other financial 
institutions, 'even though this may mean that certain provisions of the Fourth Directive would have to be 
repeated', is based on a misunderstanding of the legal nature of an EEC Directive. Even if the present 
proposal does refer to the Fourth Directive, this does not mean that those concerned would have to refer to 
two documents when drawing up annual accounts. An EEC Directive, unlike a Regulation, is not directly — the application of Article 40 (2) (d) appears to be 
inconsistent with Article 37 and should, therefore, be 
deleted, 
— the reference in Article 40 (2) (e) to interest received 
on subordinated assets should be deleted, being of no 
significance. 
Done at Brussels, 24 February 1982. 
3. 5. 82 Official Journal of the European Communities No C 112/21 
applicable law; it merely obliges the Member States to bring their national laws into line with it. Those 
concerned, therefore, would not have to refer to two EEC Directives but only to their respective national 
laws, the content of which would be harmonized through the EEC Directives. 
The present proposal refers to those provisions of the Fourth Directive which can be described as general 
rules for drawing up balance sheets. To that extent it is in accordance with what is the practice in the 
Member States. In my view it is self-evident that if there were any changes to the general balance-sheet rules, 
account would have to be taken of any effects such action might have on banks or other special cases. But it 
would be senseless and anything but desirable if the Fourth Directive and its general provisions, which have 
already been adopted, were to be once again thrown open to discussion, which would inevitably be the case 
if the Commission had to bring out a completely separate Directive for banks. 
Voting 
For; 54; against: 58; abstentions: 5. 
Page 4, point 3, of the 'Specific remarks' 
To be replaced by the following text: 
'The Section proposes that asset Item 8 be broken down as follows: 
8. (a) Participating interests: 
including: — shares in affiliated undertakings, 
— other participating interests. 
(b) Shares and other variable-yield securities.' 
Reasons 
The flexibility called for in balance-sheet layout would impede harmonization. It would also be completely 
at variance with the principles of the Fourth Directive. The same objections apply to giving each Member 
State the right to choose the order of liquidity. It must be pointed out that according to the present wording 
of asset Item 8, only those participating interests are covered which are represented by securities. The 
proposed new wording avoids this surely unintended restrictions 
Voting 
For: 55; against: 64; abstentions: 3. 
Page 5, point 6 
To be deleted. 
Reasons 
Different practices and views regarding classification by maturity should be seen as a reason for 
standardization. Giving Member States the right to choose is incompatible with the goal of 
harmonization. 
Voting 
For: 54; against: 59; abstentions: 5. 
Page 7, point 12 
To be replaced by the following text: 
'To preclude any misunderstandings regarding the risks connected with forward currency transactions, 
there should be an additional explanatory note indicating the extent to which such transactions are 
covered.' 
Reasons 
The misleading of the reader feared by the Section could be easily avoided by such an additional 
explanatory note The Section's proposal, on the other hand, would mean completely dispensing with an 
important item of information. 
Voting 
For: 55; against: 64; abstentions: 2. 
NoC 112/22 Official Journal of the European Communities 3. 5. 82 
Page 7, point 13 
To be replaced by the following text: 
'Giving a net figure for income and charges as provided for in Article 29 runs counter to one of the most 
important principles of clear accounting. The Section therefore proposes that Items 8 and 9 in 
Article 29 should each have two subdivisions, one for charges and the other for income.' 
Reasons 
Flexibility in layout is completely at variance with the goal of harmonization. 'Netting' over and above that 
provided for in the Commission proposal, as suggested by the Section, would make the profit and loss 
account more obscure and run counter to the aim of providing a true picture of the profit and loss position. 
Separate indication of charges and income, on the other hand, would make for a clearer picture. 
Voting 
For: 51; against: 58; abstentions: 3. 
Page 7, point 14 
To be replaced by the following text: 
'The Section deals at length with these articles in its report. The Section agrees with the Commission 
that there is a need for prudence, but considers that the value adjustments permitted in Article 39 of the 
Fourth Council Directive of 25 July 1978 are fully adequate, even for banks and other financial 
institutions.' 
Reasons 
Article 37 of the proposal for a Council Directive concerning the annual accounts of banks and other 
financial institutions (Doc. COM(81) 84 final) states that loans and advances to credit institutions and 
customers can be understated by up to 5 % in addition to what is already permitted as regards valuation 
adjustments. This would make it possible to build up billions of undisclosed reserves. As the tax authorities 
in the Member States cannot accept a more or less voluntary under-valuation of this kind for tax purposes, 
such a deliberate reduction of profits cannot be accepted in the published accounts either. The principle of 
prudence would be much better served if the banks openly listed prudential reserves for their risks in the 
balance sheet alongside the value adjustments already allowed. 
Voting 
For: 54; against: 59; abstentions: 5. 
Page 8, point 14 
The last two sentences to be replaced by the following text: 
'Provision should therefore be made for separate indication of these contingency reserves.' 
Reasons 
The arrangements proposed by the Commission are very far reaching and serious objections have already 
been expressed within the Section. The formation of undisclosed reserves in respect of acceptances or other 
contingent liabilities which are in any case only shown below the line is, however, completely 
unacceptable. 
Voting 
For: 56; against: 62; abstentions: 5. 
Pages 8 and 9, points 15, 16 and 17 
To be deleted. 
Reasons 
The 'amount of detailed information' required, which the Section is not in agreement with, falls far short, on 
a number of points, of the level of disclosure required under the Fourth Directive. Supervision by regulatory 
* authorities is no ground for less disclosure; one should either require informative annual accounts or 
completely dispense with disclosure. Firms in other sectors, too, can have supervisory bodies that receive 
more information than has to be published. 
Voting 
For: 65; against: 66; abstentions: 3.