Amended proposal for a European Parliament and Council Directive amending Article 12 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
Date: 1997-06-27
Institutions: European Commission
Subjects: credit guarantee, credit institution, financial solvency, management audit, share capital

COMMISSION OF THE EUROPEAN COMMUNITIES 

* 

it 

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 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

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