No C 351/24 Official Journal of the European Communities 31. 12. 85 
Second amended proposal for a Council Directive concerning the annual accounts and 
consolidated accounts of banks and other financial institutions (*) 
COM(85) 755 final 
(Submitted by the Commission to the Council pursuant to the second paragraph of 
Article 149 of the EEC Treaty on 26 December 1985 
(85/C 351/09) 
FIRST AMENDED PROPOSAL SECOND AMENDED PROPOSAL 
First amended proposal 
Amended proposal for a Council Directive concerning the 
annual accounts of banks and other financial institutions Second amended proposal 
Second amended proposal for a Council Directive concern­
ing the annual accounts and consolidated accounts of 
banks and other financial institutions 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 54 (3) (g) 
thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Parliament, 
Having regard to the opinion of the Economic and Social 
Committee, 
Whereas Council Directive 78/660/EEC (2) concerning the 
annual accounts of limited companies need not be applied 
to banks and other financial institutions, hereinafter 
referred to as 'credit institutions', pending subsequent 
coordination; whereas, in view of the central importance of 
these undertakings in the Community, such coordination 
cannot be delayed any longer following implementation of 
Directive 78/660/EEC; 
Whereas such coordination has also become urgent because 
more and more credit institutions are operating across 
national frontiers; whereas, for creditors, debtors and 
members and for the general public, improved compar­
ability of the annual accounts of these institutions is 
therefore of crucial importance; THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Community, and in particular Article 54 (3) (g) thereof, 
Having regard to the proposal from the Commission (3), 
Having regard to the opinion of the European Parlia­
ment (4), 
Having regard to the opinion of the Economic and Social 
Committee (5), 
Whereas Council Directive 78/660/EEC (6), as last amen­
ded by Directive 84/564/EEC (7), concerning the annual 
accounts of limited companies need not be applied to banks 
and other financial institutions pending subsequent 
coordination; whereas, in view of the central importance of 
these undertakings in the Community, such coordination 
cannot be delayed any longer following implementation of 
that Directive; 
Whereas Council Directive 83/349/EEC (8) on con­
solidated accounts provides for derogations for credit 
institutions only until expiry of the deadline imposed for 
the application of this Directive; whereas this Directive 
must therefore also contain provisions specific to credit 
institutions in respect of consolidated accounts; 
Whereas such coordination has also become urgent because 
more and more credit institutions are operating across 
national frontiers; whereas, for creditors, debtors and 
members and for the general public, improved compar­
ability of the annual accounts and consolidated accounts of 
these institutions is therefore of crucial importance; 
(!) OJ No C 83, 24. 3. 1984, p. 6. 
(2) OJ No L 222, 14. 8. 1978, p. 11. OJ No C 130, 1. 6. 1981, p. 1 and No C 83, 24. 3. 1984, p. 6. 
OJ No C 163, 10. 7. 1978, p. 60; OJ No C 242, 12. 9. 1983, 
p. 33. 
OJ No C 112,3.5.1982, p. 17. 
OJ No L222, 14.8. 1978, p. 11. 
OJ No L 314, 4. 12. 1984, p. 28. 
OJ No L 193, 18.7. 1983, p. 1. 
31. 12. 85 Official Journal of the European Communities No C 351/25 
FIRST AMENDED PROPOSAL 
Whereas, in virtually all the Member States of the 
Community, institutions of differing legal forms are in 
competition with one another in the credit sector; whereas 
it is therefore appropriate not to confine coordination to 
the legal forms covered by Directive 78/660/EEC, but to 
choose a scope which is in line with that of Council 
Directive 77/780/EEC (!) relating to the taking up and 
pursuit of the business of credit institutions; 
Whereas the link with the coordination of legislation 
relating to credit institutions is also important because 
aspects of the provisions governing annual accounts will 
inevitably have an impact on other areas of such 
coordination, such as authorization requirements and the 
indicators used for supervisory purpose; 
Whereas, although in view of the specific characteristics of 
credit institutions, it appears appropriate to propose a 
separate Directive on annual accounts for such undertak­
ings, this must not result in a set of standards being 
established which is separate from Directive 78/660/EEC; 
whereas such separate standards would be neither 
appropriate nor consistent with the principles underlying 
the coordination of company law, since, given the central 
place which they occupy, credit institutions cannot be 
excluded from the framework of standards devised for 
undertakings generally; whereas, for this reason only the 
particular characteristics of credit institutions are taken 
into account, and this Directive therefore deals only with 
exceptions to the rules contained in Directive 78/660/EEC; 
Whereas in each Member State an essential characteristic of 
credit institutions is the difference in structure and content 
of their balance sheets; whereas this Directive must 
therefore lay down the same structure and the same item 
designations for the balance sheets of all credit institutions 
in the Community; 
Whereas, if the annual accounts are to be comparable, a 
number of basic questions regarding the presentation of 
certain transactions in the balance sheet must be settled; 
Whereas, in the interests of greater comparability, it is also 
necessary that the content of certain balance sheet items be 
determined precisely; 
Whereas the same also applies to the composition and 
definition of certain items in the profit and loss account; 
(!) OJ No. L 322, 17. 12. 1977, p. 30. SECOND AMENDED PROPOSAL 
Whereas, in virtually all the Member States of the 
Community, institutions of differing legal forms are in 
competition with one another in the credit sector; whereas 
it is therefore appropriate not to confine coordination to 
the legal forms covered by Directive 78/660/EEC, but to 
choose a scope which includes all companies or firms as 
defined in the second paragraph of Article 58 of the Treaty, 
where these are credit institutions within the meaning of 
Council Directive 77/780/EEC (2) relating to the business 
of credit institutions or financial institutions within the 
meaning of Council Directive 83/350/EEC (3) relating to 
the supervision of credit institutions on a consolidated 
basis; 
Whereas the link with the coordination of legislation 
relating to credit institutions is also important because 
aspects of the provisions governing annual accounts and 
consolidated accounts will inevitably have an impact on 
other areas of such coordination, such as authorization 
requirements and the indicators used for supervisory 
purposes; 
Whereas, although in view of the specific characteristics of 
credit institutions, it appears appropriate to propose a 
separate Directive on the annual accounts and consolidated 
accounts of such undertakings, this must not result in a set 
of standards being established which is separate from 
Directives 78/660/EEC and 83/349/EEC; whereas such 
separate standards would be neither appropriate nor 
consistent with the principles underlying the coordination 
of company law, since, given the central place which they 
occupy in the economy of the Community, credit 
institutions cannot be excluded from the framework of 
standards devised for undertakings generally; whereas, for 
this reason, only the particular characteristics of credit 
institutions are taken into account, and this Directive 
therefore deals only with exceptions to the rules contained 
in Directives 78/660/EEC and 83/349/EEC; 
Unchanged. 
Whereas, if the annual accounts and consolidated accounts 
are to be comparable, a number of basic questions 
regarding the presentation of certain transactions in the 
balance sheet must be settled; 
Unchanged. 
Unchanged. 
(2) OJ No L 322, 17. 12. 1977, p. 30. 
(->) OJ No L 193, 18. 7. 1983, p. 18. 
No C 351/26 Official Journal of the European Communities 31. 12. 85 
FIRST AMENDED PROPOSAL SECOND AMENDED PROPOSAL 
Whereas the comparability of figures in the balance sheet 
and profit and loss account also depends crucially on the 
values at which assets or liabilities are entered in the 
balance sheet; whereas, in view of the principle of prudence 
and the need to maintain confidence in the stability of the 
credit industry, it is necessary to allow credit institutions 
some flexibility in the valuation of loans and advances; 
whereas credit institutions should also be permitted to 
show in the profit and loss account only the balance 
resulting from the set-off between charges corresponding to 
value adjustments in respect of certain items and income 
from the writing-back of such value adjustments; Unchanged. 
Whereas, in view of the special nature of credit institutions, 
certain changes are also necessary with regard to the notes 
on the annual accounts; Unchanged. 
Whereas,in line with the intention to cover as many credit 
institutions as possible, as was the case with Council 
Directive 77/780/EEC, derogations are not provided for 
small and medium-sized credit institutions, such as are 
provided for under the terms of Directive 78/660/EEC; 
whereas, nevertheless if, in the light of experience, such 
derogations prove necessary, it will be possible to provide 
for them in a subsequent measure of coordination; Whereas, in line with the intention to cover as many credit 
institutions as possible, as was the case with Directive 77/ 
780/EEC, derogations are not provided for small and 
medium-sized credit institutions, such as are provided for 
under the terms of Directive 78/660/EEC; whereas, 
nevertheless if, in the light of experience, such derogations 
prove necessary, it will be possible to provide for them in a 
subsequent measure of coordination; whereas for the same 
reasons, the scope allowed Member States under Directive 
83/349/EEC to exempt parent undertakings from the 
consolidation requirement if the undertakings to be 
consolidated do not together exceed a certain size has not 
been extended to credit institutions; 
Whereas the specific application of the provisions on 
consolidated accounts to credit institutions requires a 
number of adjustments to some of the general rules 
applicable to all industrial and commercial companies; 
whereas accordingly specific rules have been provided for 
in the case of mixed groups and exemption from sub-
consolidation is made subject to an additional condition; 
Whereas, taking account of the importance of banking 
networks which extend beyond national frontiers and their 
constant development, it is important that the annual 
accounts of a credit institution having its head office in one 
Member State should be published in all the Member States 
where it is established; Whereas, taking account of the importance of banking 
networks which extend beyond national frontiers and their 
constant development, it is important that the annual 
accounts and consolidated accounts of a credit institution 
having its head office in one Member State should be 
published in all the Member States where it is established; 
Whereas the examination of problems which arise in 
connection with the present Directive, notably concerning 
its application, require the cooperation of representatives 
of the Member States and the Commission in the form of a 
Contact Committee; whereas, in order to avoid the 
proliferation of such committees, it is desirable that the said 
cooperation be achieved by means of the committee 
provided for in Article 52 of Directive 78/660/EEC; 
whereas, nevertheless, when examining problems concern­
ing credit institutions, the committee will be appropriately 
constituted; Unchanged. 
31. 12. 85 Official Journal of the European Communities No C 351/27 
FIRST AMENDED PROPOSAL SECOND AMENDED PROPOSAL 
Whereas, in view of the complexity of the matter, the credit Unchanged. 
institutions covered by this Directive must be allowed a 
longer period than usual to implement the provisions 
thereof; whereas, pending subsequent coordination, the 
Member States should also be allowed to defer the 
application of certain provisions of this Directive to certain 
specialized credit institutions where immediate application 
would cause major adjustment problems, 
HAS ADOPTED THIS DIRECTIVE: 
Articles 1 to 41 unchanged. 
SECTION 9a 
Provisions relating to consolidated accounts 
Article 41a 
The credit institutions referred to in Article 2 shall draw up 
consolidated accounts and a consolidated annual report in 
accordance with Directive 83/349/EEC, in so far as this 
section does not provide otherwise. 
Article 41b 
Directive 83/349/EEC shall apply subject to the following 
provisions: 
1. Articles 4, 5, 6, 15 and 40 shall not apply. 
2. The requirement or option provided for in Articles 7,8 
and 11 whereby Member States shall or may exempt a 
parent undertaking governed by their national laws 
which is a credit institution, and is also a subsidiary 
undertaking, from the requirement of drawing up 
consolidated accounts and a consolidated annual 
report, shall apply only if its own parent undertaking 
has in addition declared that it guarantees the 
commitments entered into by the credit institution. 
The declaration shall be published by the credit 
institution in accordance with Article 38. 
3. The information referred to in the first two indents of 
Article 9 (2), namely: 
— the amount of the fixed assets, 
— the net turnover, 
of shall be replaced by: 
— the sum of items 1 to 3 and 6 in Article 29 or B.l to 
3 and 6 in Article 30 of this Directive. 
4. Where the parent undertaking is a credit institution, 
Article 13 (3) (c) shall not apply if shares in a subsidiary 
undertaking which is a credit institution or a financial 
institution are temporarily held as a result of a financial 
assistance operation with a view to the reorganization 
or rescue of the undertaking in question. 
No C 351/28 Official Journal of the European Communities 31. 12. 85 
FIRST AMENDED PROPOSAL SECOND AMENDED PROPOSAL 
5. Article 14, with the exception of paragraph 2 thereof, 
shall apply subject to the following provision: 
Where the parent undertaking is a credit institution and 
where one or more subsidiary undertakings to be 
consolidated do not have that status, such subsidiary 
undertakings may not be excluded from the consolid­
ation if their activities are a direct extension of banking 
activities or concern services ancillary to banking 
activities such as leasing, factoring, the management of 
unit trusts, the management of data-processing services 
or any other similar activity. 
6. For the purposes of the layout of consolidated accounts 
(a) the reference in Article 17 to Articles 9 and 10 
(balance sheet) and 23 to 26 (profit and loss 
account) of Directive 78/660/EEC shall be deemed 
to be a reference to Articles 4 (balance sheet) and 
29 and 30 (profit and loss account) of this 
Directive. Articles 3, 5 to 28 and 31 to 35 of this 
Directive shall also apply; 
(b) the reference in Article 17 to Article 15 (3) of 
Directive 78/660/EEC shall apply to the items 
deemed to be fixed assets pursuant to Article 36 of 
this Directive. 
7. For the purpose of valuing assets and liabilities to be 
included in consolidated accounts, the reference in 
Articles 29 and 33 to Articles 31 to 42 and 60 of 
Directive 78/660/EEC shall be deemed to be a reference 
to those Articles as amended in their application by 
Articles 36 to 38 of this Directive. 
8. Concerning Article 34 relating to the consolidated 
accounts: 
(a) In place of the information required in point 6, 
credit institutions shall in the notes on the 
consolidated accounts state separately for each of 
the Assets items 4 (b) and 5 and the Liabilities 
items 1 (b), 2 (b) and (c) and 3 (b) the amounts of 
those loans and advances and liabilities on the basis 
of their remaining maturity as follows: 
— not more than three months, 
— more than three months but not more than one 
year, 
— more than one year but not more than five 
years, 
— more than five years. 
For Assets item 5, the following shall also be 
shown: 
— indefinite-period accounts in credit 
(a) repayable on demand; 
(b) other. 
31. 12. 85 Official Journal of the European Communities No C 351/29 
FIRST AMENDED PROPOSAL SECOND AMENDED PROPOSAL 
If loans and advances or liabilities involve pay­
ments by instalments, the remaining maturity shall 
be the period between the balance sheet date and 
the date on which each instalment falls due. 
However, for five years after the date referred to in 
Article 44 (2), Member States may require or 
permit the listing by maturity of the assets and 
liabilities referred to in this Article to be based on 
the originally agreed maturity or period of notice. 
In that event, where a credit institution has 
acquired an existing loan not represented by a 
certificate, the Member State shall require classifi­
cation of that loan to be based on the remaining 
maturity as at the date on which it was required. 
For the purposes of this subparagraph, the 
originally agreed maturity for loans shall be the 
period between the date of first drawing and the 
date of repayment; the period of notice shall be 
deemed to be the period between the date on which 
notice is given and the date on which repayment is 
to be made; if loans and advances or liabilities are 
redeemable by instalments, the agreed maturity 
shall be the period between the date on which such 
loans and advances or liabilities arose and the date 
on which the last instalment falls due. 
(b) In addition, credit institutions shall, in respect of 
the consolidated balance sheet items specified in 
subparagraph (a) and also in respect of Assets 
item 6 (debt securities held in portfolio) and 
Liabilities item 3 (a) (debt securities issued) 
indicate what proportion of assets and Liabilities 
with an original maturity of five years or more will 
become due within one year of the consolidated 
balance sheet date. 
(c) Member States may stipulate that the information 
referred to in (a) and (b) be given in the 
consolidated balance sheet. 
(d) The notes on the consolidated accounts shall in 
addition include information on the assets which 
have been pledged as security for the consolidating 
credit institution's own liabilities (including con­
tingent liabilities); the information should be in 
sufficient detail to indicate for each item below the 
line, the total amount of the assets pledged as 
security. 
(e) Where the information referred to in point 7 has to 
be provided in items below the line, it need not be 
repeated in the notes on the consolidated accounts; 
No C 351/30 Official Journal of the European Communities 31. 12. 85 
FIRST AMENDED PROPOSAL SECOND AMENDED PROPOSAL 
(f) In place of the information required in point 8, 
credit institutions shall, in the notes on the 
consolidated accounts, indicate their operating 
income (items 1 to 3 and 6 of Article 29 or items 
B.l to B.3 and B.6 of Article 30) broken down into 
geographical markets in so far as, taking account 
of the manner in which the credit institution is 
organized, these markets differ substantially from 
one another. 
(g) The reference in point 10 to Articles 31 and 34 
to 42 of Directive 78/660/EEC shall be deemed to 
be a reference to those Articles as amended in their 
application by Articles 36 to 38 of this Directive. 
(h) By way of derogation from point 13, credit 
institutions need indicate only the amounts of 
advances and credits granted to the members of the 
administrative, managerial and supervisory bodies 
of the parent undertaking by that undertaking or 
by one of its subsidiary undertakings and the 
commitments entered into on their behalf by way 
of guarantees of any kind with an indication of the 
total for each category. 
9. Member States shall require credit institutions to give 
the following further information in the notes on the 
consolidated accounts: 
(a) a breakdown of the securities included in Assets 
items 6, 8, 9 and 9a into listed and unlisted 
securities and into securities which, pursuant to 
Article 36 of this Directive, were or were not 
considered fixed assets; 
(b) the value of leasing transactions apportioned 
between the relevant items in the consolidated 
balance sheet; 
(c) a breakdown of Assets item 14, Liabilities item 4, 
items 11 and 15 in the vertical layout or A.7 and 9 
in the horizontal layout and items 6 and 14 in the 
vertical layout or B.6 and 8 in the horizontal layout 
of the consolidated profit and loss account into 
their main component amounts, where such 
amounts are important for the purpose of assessing 
the consolidated accounts, as well as explanations 
of their nature and amount; 
(d) the amounts of interest which the undertakings 
included in the consolidation have received for 
subordinated assets in the year under review, or 
have expended for subordinated liabilities. 
31. 12. 85 Official Journal of the European Communities No C 351/31 
FIRST AMENDED PROPOSAL 
SECTION 10 
Publication 
Article 42 
1. The properly authorized annual accounts of credit 
institutions, together with the annual report and the 
opinion of the person responsible for auditing the accounts 
shall be published in the manner required by the legislation 
in each Member State in accordance with Article 3 of 
Council Directive 68/151/EEC (]). 
2. However, where the credit institution which drew up 
the annual accounts is not established as one of the types of 
company listed in Article 1 (1) of Directive 78/660/EEC 
and is not required by its national law to publish the 
documents referred to in paragraph 1 in the same manner as 
prescribed in Article 3 of Directive 68/151/EEC, it must at 
least make them available to the public at its head office. It 
must be possible to obtain a copy of such documents on 
request. The price of such a copy must not exceed its 
administrative cost. 
3. The annual accounts of a credit institution shall be 
published in each Member State where the credit institution 
has branches, as defined by Article 1, third indent, of 
Directive 77/780/EEC. Such Member States may require 
that the publication of these documents be made in their 
official language. 
Articles 43 to SECOND AMENDED PROPOSAL 
SECTION 10 
Publication 
Article 42 
1. The duly approved annual accounts of credit 
institutions, together with the annual report and the 
opinion submitted by the person responsible for auditing 
the accounts shall be published as laid down by the laws of 
each Member State in accordance with Article 3 of 
Directive 68/151/EEC (2). 
The laws of a Member State may, however, permit the 
annual report not to be published as stipulated above. In 
that case, it shall be made available to the public at the 
company's registered office in the Member State con­
cerned. It must be possible to obtain a copy of all or part of 
any such report upon request. The price of such a copy 
must not exceed its administrative cost. 
(la) Paragraph 1 shall also apply to the duly approved 
consolidated accounts, the consolidated annual report and 
the opinion submitted by the person responsible for 
auditing the accounts. 
2. However, where a credit institution which has drawn 
up annual accounts or consolidated accounts is not 
established as one of the types of company listed in 
Article 1 (1) of Directive 78/660/EEC and is not required by 
its national law to publish the documents referred to in 
paragraphs 1 and la in the same manner as prescribed in 
Article 3 of Directive 68/151/EEC, it must at least make 
them available to the public at its head office. It must be 
possible to obtain a copy of such documents on request. 
The price of such a copy must not exceed its administrative 
cost. 
3. The annual accounts and consolidated accounts of a 
credit institution must be published in every Member State 
in which the credit institution has branches, within the 
meaning of the third indent of Article 1 of Directive 77/ 
780/EEC. Such Member States may require that the 
publication of those documents be effected in their official 
language. 
4. Member States shall provide for appropriate sanc­
tions for failure to comply with the publication obligations 
imposed in this Article. 
45 unchanged. 
(!) OJ No L 65, 14. 3. 1968, p. 8. (2) OJ NoL65, 14.3. 1968, p. 8.