Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions
Date: 2000-03-20
Institutions: Council of the European Union, European Parliament
Subjects: credit institution, economic analysis, provision of services

26.5.2000

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Official Journal of the European Communities

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I

(Acts whose publication is obligatory)

DIRECTIVE 2000/12/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

relating to the taking up and pursuit of the business of credit institutions

of 20 March 2000

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular the first and third sentences of
Article 47(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of
Committee (1),

the Economic and Social

solvency

ratio for

December 1989 on a
credit
institutions (7), Council Directive 92/30/EEC of 6 April
1992 on the supervision of credit
institutions on a
consolidated basis (8), and Council Directive 92/121/EEC
of 21 December 1992 on the monitoring and control of
institutions (9) have been
large
frequently and substantially amended. For reasons of
clarity and rationality,
therefore,
should be codified and combined in a single text.

the said Directives

exposures of

credit

(2) Pursuant to the Treaty, any discriminatory treatment with
regard to establishment and to the provision of services,
based either on nationality or on the fact
that an
undertaking is not established in the Member State where
the services are provided, is prohibited.

Acting in accordance with the procedure laid down in Article
251 of the Treaty (2),

(3)

Whereas:

In order to make it easier to take up and pursue the
business of credit institutions, it is necessary to eliminate
the most obstructive differences between the laws of the
Member States as
to which these
institutions are subject.

the rules

regards

(1) Council Directive 73/183/EEC of 28 June 1973 on the
abolition of restrictions on freedom of establishment and
freedom to provide services in respect of self-employed
activities of banks and other financial institutions (3), first
Council Directive (77/780/EEC) of 12 December 1977 on
the coordination of laws, regulations and administrative
provisions relating to the taking up and pursuit of the
institutions (4), Council Directive
business of
89/299/EEC of 17 April 1989 on the own funds of
credit institutions (5), second Council Directive 89/646/
EEC of 15 December 1989 on the coordination of laws,
regulations and administrative provisions relating to the
taking up and pursuit of
credit
institutions (6), Council Directive 89/647/EEC of 18

the business of

credit

(1) OJ C 157, 25.5.1998, p. 13.
(2) Opinion of the European Parliament of 18 January 2000 (not yet
Journal) and Council Decision of 13

published in the Official
March 2000 (not yet published in the Official Journal).

(3) OJ L 194, 16.7.1973, p. 1.
(4) OJ L 322, 17.12.1977, p. 30. Directive as last amended by

(4) This Directive constitutes the essential instrument for the
achievement of the internal market, a course determined
by the Single European Act and set out in timetable form
in the Commission’s White Paper, from the point of view
of both the freedom of establishment and the freedom to
provide
credit
institutions.

field of

financial

services,

in the

(5) Measures to coordinate credit institutions must, both in
order to protect savings and to create equal conditions of
competition between these institutions, apply to all of
them. Due regard must be had, where applicable, to the
objective differences in their statutes and their proper
aims as laid down by national laws.

Directive 98/33/EC (OJ L 204, 21.7.1998, p. 29).

(7) OJ L 386, 30.12.1989, p. 14. Directive as last amended by

(5) OJ L 124, 5.5.1989, p. 16. Directive as last amended by Directive

Directive 98/33/EC.

92/30/EEC (OJ L 110, 28.4.1992, p. 52).

(6) OJ L 386, 30.12.1989, p. 1. Directive as last amended by Directive

(8) OJ L 110, 28.4.1992, p. 52.
(9) OJ L 29, 5.2.1993, p. 1. Directive as amended by the 1994 Act of

95/26/EC (OJ L 168, 18.7.1995, p. 7).

Accession.

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(6) The scope of

and other

issue of bonds

those measures should therefore be as
broad as possible, covering all institutions whose business
is to receive repayable funds from the public, whether in
the form of deposits or in other forms such as the
continuing
comparable
securities and to grant credits for their own account.
Exceptions must be provided for in the case of certain
credit institutions to which this Directive cannot apply.
this Directive shall not prejudice
The provisions of
the application of national
laws which provide for
special supplementary authorisations permitting credit
institutions to carry on specific activities or undertake
specific kinds of operations.

(7) The approach which has been adopted is to achieve only
the essential harmonisation necessary and sufficient to
secure the mutual recognition of authorisation and of
prudential
supervision systems, making possible the
granting of a single licence recognised throughout the
Community and the application of the principle of home
Member State prudential
the
requirement that a programme of operations must be
produced should be seen merely as a factor enabling the
competent authorities to decide on the basis of more
precise information using objective criteria. A measure of
flexibility may none the less be possible as regards the
requirements on the legal form of credit institutions of
the protection of banking names.

supervision. Therefore,

credit

institutions. Pending further

(8) Equivalent financial requirement for credit institutions are
necessary to ensure similar safeguards for savers and fair
conditions of competition between comparable groups
coordination,
of
appropriate structural ratios should be formulated that
framework of
will make
it possible within the
cooperation between national authorities to observe,
in
the position of
accordance with standard methods,
comparable types of credit institutions. This procedure
should help to bring about the gradual approximation of
the systems of coefficients established and applied by the
Member States.
to make a
distinction between coefficients intended to ensure the
sound management of credit
institutions and those
established for the purposes of economic and monetary
policy.

is necessary, however

It

grant or

should not

such as content of

(9) The principles of mutual recognition and home Member
State supervision require that Member States’ competent
should withdraw
authorities
authorisation where factors
the
activities programmes, the geographical distribution or
the activities actually carried on indicate clearly that a
credit institution has opted for the legal system of one
Member State for the purpose of evading the stricter
standards in force in another Member State within whose
territory it carries on or intends to carry on the greater
part of its activities. A credit institution which is a legal
person must be authorised in the Member State in which

it has its registered office. A credit institution which is
not a legal person must have its head office in the
Member State in which it has been authorised.
In
addition, Member States must
require that a credit
institution’s head office always be situated in its home
Member State and that it actually operates there.

(10) The competent authorities

should not authorise or
continue the authorisation of a credit institution where
they are liable to be prevented from effectively exercising
their supervisory functions by the close links between
that institution and other natural or legal persons. Credit
institutions already authorised must also satisfy the
competent authorities in that respect. The definition of
(cid:145)close links(cid:146) in this Directive lays down minimum criteria.
That does not prevent Member States from applying it to
situations other than those envisaged by the definition.
The sole fact of having acquired a significant proportion
of a company’s capital does not constitute participation,
within the meaning of (cid:145)close links(cid:146), if that holding has
been acquired solely as a temporary investment which
does not make it possible to exercise influence over the
structure or financial policy of the institution.

(11) The reference to the supervisory authorities’ effective
exercise of their supervisory functions covers supervision
on a consolidated basis which must be exercised over a
credit institution where the provisions of Community law
so provide. In such cases, the authorities applied to for
authorisation must be able to identify the authorities
competent to exercise supervision on a consolidated basis
over that credit institution.

(12) The home Member State may also establish rules stricter
than those laid down in Article 5(1), first subparagraph
and (2), and Articles 7, 16, 30, 51 and 65 for institutions
authorised by its competent authorities.

(13) The abolition of

the authorisation requirement with
respect to the branches of Community credit institutions
necessitates the abolition of endowment capital.

(14) By virtue of mutual recognition, the approach chosen
permits credit
institutions authorised in their home
Member States to carry on, throughout the Community,
listed in Annex I by
any or all of
establishing branches or by providing services. The
carrying-on of activities not
listed in the said Annex
enjoys the right of establishment and the freedom to
provide services under the general provisions of
the
Treaty.

the activities

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(15)

It is appropriate, however to extend mutual recognition
to the activities listed in Annex I when they are carried
on by financial
institutions which are subsidiaries of
credit
institutions, provided that such subsidiaries are
covered by the consolidated supervision of their parent
undertakings and meet certain strict conditions.

(16) The host Member State may,

require

services,

in connection with the
exercise of the right of establishment and the freedom to
provide
compliance with specific
provisions of its own national laws or regulations on the
part of institutions not authorised as credit institutions in
their home Member States and with regard to activities
not listed in Annex I provided that, on the one hand,
such provisions are compatible with Community law and
are intended to protect the general good and that, on the
other hand, such institutions or such activities are not
subject
legislation or
this
regulations of their home Member States.

to equivalent

rules under

(17) The Member States must ensure that

to carrying on activities

there are no
obstacles
receiving mutual
recognition in the same manner as in the home Member
State, as long as the latter do not conflict with legal
provisions protecting the general good in the host
Member State.

(18) There is a necessary link between the objective of this
Directive and the liberalisation of capital movements
being brought about by other Community legislation. In
any case the measures regarding the liberalisation of
banking services must be in harmony with the measures
liberalising capital movements.

conclude

account being taken of

(19) The rules governing branches of credit institutions having
their head office outside the Community should be
analogous in all Member States. It is important at the
present time to provide that such rules may not be more
favourable than those for branches of institutions from
another Member State.
It should be specified that the
agreements with third
Community may
countries providing for the application of rules which
accord such branches the same treatment throughout its
territory,
the principle of
reciprocity. The branches of credit institutions authorised
in third countries do not enjoy the freedom to provide
services under the second paragraph of Article 49 of the
Treaty or the freedom of establishment in Member States
other than those in which they are established. However,
requests for the authorisation of subsidiaries or of the
acquisition of holdings made by undertakings governed
by the laws of third countries are subject to a procedure
intended to ensure that Community credit
institutions
receive reciprocal
in the third countries in
question.

treatment

(20) The authorisations granted to credit institutions by the
competent national authorities pursuant to this Directive
have Community-wide, and no longer merely nationwide,
application. Existing reciprocity clauses have therefore no
effect. A flexible procedure is therefore needed to make it
possible to assess reciprocity on a Community basis. The
aim of this procedure is not to close the Community’s
financial markets but rather, as the Community intends
to keep its financial markets open to the rest of the
world,
the global
financial markets in other third countries. To that end,
this Directive provides for procedures for negotiating
with third countries and, as a last
the
possibility of taking measures involving the suspension of
new applications for authorisation or the restriction of
new authorisations.

liberalisation of

to improve

resort,

the

for

(21)

It is desirable that agreement should be reached, on the
basis of reciprocity, between the Community and third
countries with a view to allowing the practical exercise of
consolidated
largest possible
geographical area.

supervision over

the

(22) Responsibility for supervising the financial soundness of
a credit institution, and in particular its solvency, rests
with the competent authorities of
its home Member
State. The host Member State’s competent authorities
retain responsibility for the supervision of liquidity and
monetary policy. The supervision of market risk must be
the subject of close cooperation between the competent
authorities of the home and host Member States.

(23) The smooth operation of the internal banking market
requires not only legal rules but also close and regular
cooperation between the competent authorities of
the
Member States. For
consideration of problems
the
concerning individual credit institutions the (cid:145)groupe de
(contact group) set up between the banking
contact(cid:146)
supervisory authorities
the most appropriate
remains
forum. That group is a suitable body for the mutual
exchange of information provided for in Article 28.

(24) That mutual information procedure does not in any case
replace the bilateral collaboration established by Article
28. The competent host Member State authorities can,
without prejudice to their powers of proper control,
continue either, in an emergency, on their own initiative
or
the competent home
Member State authorities, to verify that the activities of a
credit
territories
comply with the relevant laws and with the principles of
sound administrative and accounting procedures and
adequate internal control.

institution established within their

following the initiative of

(25)

It is appropriate to allow the exchange of information
between the competent authorities and authorities or

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their

bodies which, by virtue of
function, help to
strengthen the stability of the financial system. In order
to preserve the confidential nature of the information
forwarded,
the list of addressees must remain within
strict limits.

(26) Certain behaviour, such as fraud and insider offences, is
liable to affect the stability, including the integrity, of the
financial system, even when involving institutions other
than credit institutions.

(27)

It is necessary to specify the conditions under which such
exchanges of information are authorised.

(28) Where it is stipulated that information may be disclosed
the competent
these may, where appropriate, make their

only with the express agreement of
authorities,
agreement subject to compliance with strict conditions.

(32) Such standards must apply to all credit

institutions

authorised in the Community.

(33) The own funds of a credit

institutions can serve to
absorb losses which are not matched by a sufficient
volume of profits. The own funds also serve as an
important yardstick for the competent authorities,
in
particular for the assessment of the solvency of credit
institutions and for other prudential purposes.

(34) Credit institutions, in an internal banking market, engage
in direct competition with each other, and the definitions
and standards pertaining to own funds must therefore be
equivalent. To that end, the criteria for determining the
composition of own funds must not be left solely to
Member States. The adoption of common basic standards
will be in the best interests of the Community in that it
will prevent
competition and will
of
distortions
strengthen the Community banking system.

(29) Exchanges of information between, on the one hand, the
competent authorities and, on the other, central banks
and other bodies with a similar function in their capacity
as monetary authorities and, where appropriate, other
public authorities responsible for supervising payment
systems should also be authorised.

(35) The definition of own funds laid down in this Directive
for a maximum of
items and qualifying
provides
amounts,
leaving it to the discretion of each Member
State to use all or some of such items or to adopt lower
ceilings for the qualifying amounts.

(30) For

institutions,

situation or

strengthening

the purpose of

the prudential
supervision of credit institutions and protection of clients
it should be stipulated that an
of credit
auditor must have a duty to report promptly to the
competent authorities, wherever, as provided for by this
Directive, he becomes aware, while carrying out his tasks,
of certain facts which are liable to have a serious effect
the administrative and
on the financial
accounting organisation of a credit institution. Having
regard to the aim in view, it is desirable for the Member
State to provide that such a duty should apply in all
circumstances where such facts are discovered by an
in an
auditor during the performance of his
undertaking which has
credit
institution. The duty of auditors to communicate, where
appropriate,
to the competent authorities certain facts
and decisions concerning a credit institution which they
their tasks in a
discover during the performance of
non-financial undertaking does not in itself change the
nature of their tasks in that undertaking nor the manner
in which they must perform those
in that
undertaking.

tasks
links with a

close

tasks

(31) Common basic standards for the own funds of credit
institutions are a key factor in the creation of an internal
banking market since own funds serve to ensure the
continuity of credit institutions and to protect savings.
Such harmonisation strengthens the supervision of credit
institutions and contributes to further coordination in the
banking sector.

(36) This Directive specifies the qualifying criteria for certain
own funds items, and the Member States remain free to
apply more stringent provisions.

(37) At the initial stage common basic standards are defined
the items

in broad terms in order to encompass all
making up own funds in the different Member States.

(38) According to the nature of the items making up own
funds, this Directive distinguishes between on the one
hand, items constituting original own funds and, on the
other, those constituting additional own funds.

(39) To reflect the fact that items constituting additional own
funds are not of the same nature as those constituting
original own funds, the amount of the former included in
own funds must not exceed the original own funds.
Moreover, the amount of certain items of additional own
funds included must not exceed one half of the original
own funds.

(40)

In order to avoid distortions of competition, public credit
institutions must not
in their own funds
include
guarantees granted them by the Member States or local
authorities.

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(41) Whenever in the course of supervision it is necessary to
determine the amount of the consolidated own funds of
a group of credit institutions, the calculation shall be
effected in accordance with this Directive.

mutual recognition of supervision techniques and thus
the completion of the internal banking market.

of

the

(42) The precise accounting technique to be used for the
calculation of own funds, the solvency ratio, and for the
assessment of the concentration of exposures must take
of Council Directive
account
86/635/EEC of 8 December 1986 on the
annual
accounts and consolidated accounts of banks and other
institutions (1), which incorporates
certain
financial
the provisions of Council Directive
adaptations of
83/349/EEC of 13 June 1983 based on Article 44(2)(g)
of the Treaty on consolidated accounts (2).

provisions

(43) The provisions on own funds form part of the wider
international effort to bring about approximation of the
rules in force in major countries regarding the adequacy
of own funds.

(44) The Commission will draw up a report and periodically
examine, with the aim of tightening them, the provisions
on own funds and thus achieving greater convergence on
a common definition of own funds. Such convergence
will
credit
allow the
institutions’ own funds.

of Community

alignment

(45) The provisions on solvency ratios are the outcome of
work carried out by the Banking Advisory Committee
which is
to the
responsible for making suggestions
Commission with a view to coordinating the coefficients
applicable in the Member States.

(46) The establishment of an appropriate solvency ratio plays
a central role in the supervision of credit institutions.

(47) A ratio which weights assets and off-balance-sheet items
according to the degree of credit risk is a particularly
useful measure of solvency.

(48) The development of common standards for own funds in
relation to assets and off-balance-sheet items exposed to
the
credit risk is, accordingly, an essential aspect of
the
the achievement of
harmonisation necessary for

(1) OJ L 372, 31.12.1986, p. 1.
(2) OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive

90/605/EEC (OJ L 317, 16.11.1990, p. 60).

(49)

considered in conjunction with other

In that respect, the provisions on a solvency ratio must
be
specific
instruments also harmonising the fundamental techniques
of the supervision of credit institutions.

(50)

In an internal banking market, institutions are required to
enter into direct competition with one another and the
common solvency standards in the form of a minimum
ratio prevent distortions of competition and strengthen
the Community banking system.

by

(51) This Directive provides for different weightings to be
financial
issued
given to guarantees
institutions. The Commission accordingly undertakes to
taken as a whole
examine whether
this Directive
significantly
credit
institutions and insurance undertakings and, in the light
of that examination, to consider whether any remedial
measures are justified.

competition

different

between

distorts

the

in the

context of

calculation of

are obliged to strive

(52) Annex III lays down the treatment of off-balance-sheet
items
credit
institutions’ capital requirements. With a view to the
the internal market and in
smooth functioning of
particular with a view to ensuring a level playing field
Member States
for uniform
assessment of contractual netting agreements by their
the
competent authorities. Annex III takes account of
work of an international forum of banking supervisors
on the supervisory recognition of bilateral netting,
in
particular the possibility of calculating the own-funds
requirements for certain transactions on the basis of a
net rather than a gross amount provided that there are
legally binding agreements which ensure that the credit
risk is confined to the net amount. For internationally
active credit institutions and groups of credit institutions
in a wide range of third countries, which compete with
Community credit institutions, the rules adopted on the
refined
level will
wider
supervisory
(OTC)
of
derivative instruments. This refinement results in a more
appropriate compulsory capital cover taking into account
the
supervisorily recognised
contractual netting agreements on potential future credit
instruments
risks. The
clearing of OTC derivative
provided by
central
counterparty plays an important role in certain Member
States. It is appropriate to recognise the benefits from
such a clearing in terms of a reduction of credit risk and
related systemic risk in the prudential treatment of credit
risk. It is necessary for the current and potential future
exposures arising from cleared OTC derivatives contracts

in a
over-the-counter

risk-reducing effects of

clearing houses

international

treatment

acting

result

as

a

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as

treatment

same prudential

to be fully collateralised and for the risk of a build-up of
the clearing house’s exposures beyond the market value
of posted collateral to be eliminated in order for cleared
OTC derivatives to be granted for a transitional period
the
exchange-traded
derivatives. The competent authorities must be satisfied
as to the level of
the initial margins and variation
margins required and the quality of and the level of
protection provided by the posted collateral. For credit
institutions incorporated in the Member States, Annex III
creates a similar possibility for the recognition of bilateral
netting by the competent authorities and thereby offers
them equal conditions of competition. The rules are both
further
well
prudential
reinforcement
The
supervisory measures
competent authorities
should
ensure that
is based on
effective rather than apparent national amounts.

the calculation of add-ons

in the Member States

application
credit

institutions.

appropriate

balanced

and

the

the

for

to

of

of

(53) The minimum ratio provided for

in this Directive
in the
reinforces
Community. A level of 8 % has been adopted following a
statistical survey of capital requirements in force at the
beginning of 1988.

institutions

capital of

credit

the

(54) The essential rules for monitoring large exposures of
credit institutions should be harmonised. Member States
should still be able to adopt provisions more stringent
than those provided for by this Directive.

(55) The monitoring and control of a credit

institution’s
exposures is an integral part of its supervision. Excessive
concentration of exposures to a single client or group of
connected clients may result in an unacceptable risk of
loss. Such a situation may be considered prejudicial to
the solvency of a credit institution.

(56)

throughout

In an internal banking market, credit
institutions are
engaged in direct competition with one another and
monitoring requirements
the Community
should therefore be equivalent. To that end, the criteria
applied to determining the concentration of exposures
must be
at
Community level and cannot be left entirely to the
the Member States. The adoption of
discretion of
common rules will therefore best serve the Community’s
interests,
in the
conditions of
strengthening the
Community’s banking system.

it will prevent differences

legally binding rules

competition, while

subject of

since

the

risk were devised for

credit institutions. That list should therefore be used also
for the definition of exposures for the purposes of limits
to large exposures.
It is not, however, appropriate to
refer on principle to the weightings or degrees of risk
laid down in the said provisions. Those weightings and
the purpose of
degrees of
establishing a general solvency requirement to cover the
In the context of the
credit risk of credit institutions.
the aim is to limit the
regulation of
maximum loss
institution may incur
through any single client or group of connected clients. It
is therefore appropriate to adopt a prudent approach in
which, as a general rule, account is taken of the nominal
value of exposures, but no weightings or degrees of risk
are applied.

large exposures,
that a credit

In the field of

(58) When a credit institution incurs an exposure to its own
parent undertaking or to other subsidiaries of its parent
undertaking, particular prudence
is necessary. The
management of exposures incurred by credit institutions
must be carried out in a fully autonomous manner, in
sound banking
accordance with the principles of
management, without regard to any considerations other
than those principles. The provision of
this Directive
require that where the influence exercised by persons
directly or indirectly holding a qualifying participation in
a credit institution is likely to operate to the detriment of
the sound and prudent management of that institution,
the competent authorities shall take appropriate measures
to put an end to that situation.
large
exposures, specific standards should also be laid down for
institution to its own
exposures incurred by a credit
group, and in such cases more stringent restrictions are
justified than for other
stringent
restrictions need not, however be applied where the
parent undertaking is a financial holding company or a
institution or where the other subsidiaries are
credit
either credit or
institutions or undertakings
offering ancillary banking services, provided that all such
undertakings are covered by the supervision of the credit
In such cases the
institution on a consolidated basis.
consolidated monitoring of
the group of undertakings
allows for an adequate level of supervision, and does not
require the imposition of more stringent
limits on
exposure. Under this approach banking groups will also
be encouraged to organise their structures in such a way
as to allow consolidated monitoring, which is desirable
because a more comprehensive level of monitoring is
possible.

exposures. More

financial

(59)

In order to be effective, supervision on a consolidated
including
basis must be applied to all banking groups,
those the parent undertakings of which are not credit
institutions. The competent authorities must hold the
necessary legal
instruments to be able to exercise such
supervision.

(57) The provisions on a solvency ratio for credit institutions
include a list of credit risks which may be incurred by

(60)

In the case of groups with diversified activities the parent
credit
undertakings of which control at

least one

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institution subsidiary, the competent authorities must be
able to assess the financial situation of a credit institution
in such a group. Pending subsequent coordination, the
Member States may lay down appropriate methods of
consolidation for the achievement of the objective of this
Directive. The competent authorities must at least have
the means of obtaining from all undertakings within a
group the information necessary for the performance of
function. Cooperation between the authorities
their
responsible for
financial
the supervision of different
sectors must be established in the case of groups of
undertakings carrying on a range of financial activities.

considered inappropriate

(61) The Member States can, furthermore, refuse or withdraw
banking authorisation in the case of certain group
structures
carrying on
banking activities,
in particular because such structures
could not be supervised effectively. In this respect the
competent authorities have the powers mentioned in the
first subparagraph of Article 7(1), Article 7(2), point (c)
of Article 14(l), and Article 16 of this Directive, in order
to ensure the sound and prudent management of credit
institutions.

for

(62) The Member States

can equally apply appropriate
supervision techniques to groups with structures not
covered by this Directive.
If such structures become
common,
this Directive should be extended to cover
them.

(63) Supervision on a consolidated basis must

take in all
activities defined in Annex I. All undertakings principally
engaged in such activities must therefore be included in
supervision on a consolidated basis. As a result,
the
definition of financial
institutions must be widened in
order to cover such activities.

(64) Directive

with

together

86/635/EEC,

established the

Directive
83/349/EEC,
consolidation
applicable to consolidated accounts published by credit
therefore possible to define more
institutions.
in prudential
precisely
supervision exercised on a consolidated basis.

is
the methods

to be used

rules of

It

(65) Supervision of credit institutions on a consolidated basis
must be aimed at, in particular, protecting the interests of
the depositors of the said institutions and ensuring the
stability of the financial system.

the business of credit institutions requires cooperation
between the competent authorities and the Commission
within a banking advisory committee, particularly when
conducted with a view to closer coordination. The
Banking Advisory
competent
Committee
authorities of the Member States does not rule out other
forms
authorities which
supervise the taking up and pursuit of the business of
credit institutions and, in particular, cooperation within
the (cid:145)groupe de contact(cid:146) (contact group) set up between
the banking supervisory authorities.

cooperation

between

the

of

of

(67) Technical modifications to the detailed rules laid down in
this Directive may from time to time be necessary to take
account of new developments in the banking sector. The
Commission shall accordingly make such modifications
as are necessary, after consulting the Banking Advisory
Committee, within the limits of the implementing powers
conferred on the Commission by the Treaty. The
measures necessary for
this
Directive should be adopted in accordance with Council
Decision 1999/468/EC of 28 June 1999 laying down the
procedures
implementing powers
the exercise of
conferred on the Commission (1).

the implementation of

for

in the

case of

(68) Article 36(1) of this Directive permits joint and several
credit
commitments of borrowers
institutions organised as cooperative societies or funds to
be treated as own funds items under Article 34(2)(7). The
Danish Government has expressed a strong interest in
having its few mortgage credit institutions organised as
funds converted into public
cooperative societies or
to facilitate the
limited liability companies.
conversion or
temporary
derogation allowing them to include part of their joint
and several commitments as own funds is required. This
affect
derogation should not
temporary
competition between credit institutions.

In order
it possible,

to make

adversely

a

(69) The application of a 20 % weighting to credit institutions’
holdings of mortgage bonds may unsettle a national
financial market on which such instruments play a
preponderant role. In this case, provisional measures are
taken to apply a 10 % risk weighting. The market for
securitisation is undergoing rapid development.
is
therefore desirable that the Commission should examine
treatment of
with the Member States the prudential
asset-backed securities and put forward, before 22 June
1999, proposals aimed at adapting existing legislation in
order to define an appropriate prudential treatment for
asset-backed securities. The competent authorities may
secured by
authorise
mortgages on offices or on multipurpose commercial
premises until 31 December 2006. The property to

a 50 % weighting to assets

It

(66) The examination of problems connected with matters
covered by this Directive as well as by other Directive on

(1) OJ L 184, 17.7.1999, p. 23.

L 126/8

EN

Official Journal of the European Communities

26.5.2000

criteria

which the mortgage relates must be subject to rigorous
revaluation to take
and regular
assessment
account of the developments in the commercial property
market. The property must be either occupied or let by
the owner. Loans for property development are excluded
from this 50 % weighting.

(71) Moreover, the harmonisation of the conditions relating to
the reorganisation and winding-up of credit institutions is
also proceeding.

(72) The arrangements necessary for

the supervision of

liquidity risks will also have to be harmonised.

(70)

to ensure harmonious application of

In order
the
provisions on large exposures, Member States should be
allowed to provide for the two-stage application of the
new limits. For
institutions, a longer
transitional period may be warranted inasmuch as too
rapid an application of the 25 % rule could reduce their
lending activity too abruptly.

smaller credit

(73) This Directive must no affect

the
Member States concerning the deadlines for transposition
set out in Annex V, Part B,

to obligations of

HAVE ADOPTED THIS DIRECTIVE:

26.5.2000

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L 126/9

CONTENTS

DEFINITIONS AND SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prohibition for undertakings other than credit institutions from carrying on the business
. . . . . . . . . . . . . . . . . . . . . .
of taking deposits or other repayable funds from the public

REQUIREMENTS FOR ACCESS TO THE TAKING UP AND PURSUIT OF THE
BUSINESS OF CREDIT INSTITUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Initial capital

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management body and place of the head office of credit institutions . . . . . . . . . . . . . . . .

Shareholders and members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Programme of operations and structural organisation . . . . . . . . . . . . . . . . . . . . . . . . . . .

Economic needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorisation refusal

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notification of the authorisation to the Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prior consultation with the competent authorities of other Member States . . . . . . . . . . . .

Branches of credit institutions authorised in another Member State . . . . . . . . . . . . . . . . .

Withdrawal of authorisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying holding in a credit institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedures and internal control mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROVISIONS CONCERNING THE FREEDOM OF ESTABLISHMENT AND THE
FREEDOM TO PROVIDE SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Credit institutions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial institutions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exercise of the right of establishment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exercise of the freedom to provide services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power of the competent authorities of the host Member State . . . . . . . . . . . . . . . . . . . . .

Page

12

12

14

15

16

16

16

16

17

17

17

17

17

17

18

18

18

18

19

19

19

19

20

21

21

RELATIONS WITH THIRD COUNTRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

Notification of the subsidiaries of third countries’ undertakings and conditions of access
to the markets of these countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Branches of credit institutions having their head offices outside the Community . . . . . . . .

Cooperation with third countries’ competent authorities regarding supervision on a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
consolidated basis

TITLE I

Article 1

Article 2

Article 3

TITLE II

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

TITLE III

Article 18

Article 19

Article 20

Article 21

Article 22

TITLE IV

Article 23

Article 24

Article 25

TITLE V

PRINCIPLES AND TECHNICAL INSTRUMENTS FOR PRUDENTIAL SUPERVISION

Chapter 1

Principles of prudential supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 26

Article 27

Article 28

Competence of control of the home Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Competence of the host Member State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Collaboration concerning supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

23

23

24

24

24

24

24

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Official Journal of the European Communities

26.5.2000

Article 29

Article 30

Article 31

Article 32

Article 33

On-the-spot verification of branches established in another Member State . . . . . . . . . . . .

Exchange of information and professional secrecy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty of persons responsible for the legal control of annual and consolidated accounts . . .

Power of sanction of the competent authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Right to apply to the courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

24

24

26

27

27

Chapter 2

Technical instruments of prudential supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

Section 1

Article 34

Article 35

Article 36

Article 37

Article 38

Article 39

Section 2

Article 40

Article 41

Article 42

Article 43

Article 44

Article 45

Article 46

Article 47

Section 3

Article 48

Article 49

Article 50

Section 4

Article 51

Own funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other provisions concerning own funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Calculation of own funds on a consolidated basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deductions and limits

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision of proof to the competent authorities

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Solvency ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The numerator: own funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The denominator: risk-adjusted assets and off-balance-sheet items

. . . . . . . . . . . . . . . . . .

Risk weightings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighting of claims for regional governments or local authorities of the Member States . .

Other weighting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Administrative bodies and non-commercial undertakings . . . . . . . . . . . . . . . . . . . . . . . . .

Solvency ratio level

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Large exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reporting of large exposures

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limits on large exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supervision on a consolidated or unconsolidated basis of large exposures

. . . . . . . . . . . .

Qualifiying holdings outside the financial sector

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limits to non-financial qualifying holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 3

Supervision on a consolidated basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 52

Article 53

Article 54

Article 55

Article 56

TITLE VI

Article 57

Article 58

Article 59

Supervision on a consolidated basis of credit institutions . . . . . . . . . . . . . . . . . . . . . . . . .

Competent authorities responsible for exercising supervision on a consolidated basis . . . .

Form and extent of consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information to be supplied by mixed-activity holding companies and their subisidiaries . .

Measures to facilitate supervision on a consolidated basis

. . . . . . . . . . . . . . . . . . . . . . . .

BANKING ADVISORY COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Composition and tasks of the Banking Advisory Committee . . . . . . . . . . . . . . . . . . . . . .

Examination of the requirements for authorisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Observation ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

27

28

29

29

30

30

30

30

30

30

31

33

33

33

33

34

34

34

36

36

36

37

37

38

39

39

40

41

41

41

41

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TITLE VII

Article 60

POWERS OF EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Technical adaptations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TITLE VIII

TRANSITIONAL AND FINAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 1

Transitional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 61

Article 62

Article 63

Article 64

Article 65

Transitional provisions regarding Article 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transitional provisions regarding Article 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transitional provisions regarding Article 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transitional provisions regarding Article 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transitional provisions regarding Article 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 2

Final provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 66

Article 67

Article 68

Article 69

ANNEX I

ANNEX II

Commission information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repealed Directives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Addressees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

List of activities subject to mutual recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Classification of off-balance-sheet items

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX III

The treatment of off-balance-sheet items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX IV

Types of off-balance-sheet items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX V Part A

Repealed Directives, together with their successive amendments (referred to in Article 67)

ANNEX V Part B

Deadlines for implementation (referred to in Article 67)

. . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX VI

Correlation table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

42

42

42

42

42

43

44

44

45

45

45

45

45

45

46

47

48

52

53

54

55

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TITLE I

DEFINITIONS AND SCOPE

Article 1

Definitions

For the purpose of this Directive:

1.

institution(cid:146)

(cid:145)credit
shall mean an undertaking whose
business is to receive deposits or other repayable funds
from the public and to grant credits for its own account.

the purposes of applying the supervision on a
For
credit
considered as
shall be
consolidated basis,
institution, a credit
institution according to the first
paragraph and any private or public undertaking which
corresponds to the definition in the first paragraph and
which has been authorised in a third country.

a

For the purposes of applying the supervision and control
shall be considered as a credit
of
large exposures,
institution according to the first
institution, a credit
paragraph,
including branches of a credit institution in
third countries and any private or public undertaking,
including
to the
its branches, which corresponds
definition in the first paragraph and which has been
authorised in a third country;

6.

7.

8.

9.

10.

(cid:145)home Member State(cid:146) shall mean the Member State in
which a
institution has been authorised in
accordance with Articles 4 to 11;

credit

(cid:145)host Member State(cid:146) shall mean the Member State in
which a credit institution has a branch or in which it
provides services;

(cid:145)control(cid:146) shall mean the relationship between a parent
undertaking and a subsidiary, as defined in Article 1 of
Directive 83/349/EEC, or a similar relationship between
any natural or legal person and an undertaking;

for

supervision on a
the purposes of
(cid:145)participation(cid:146)
consolidated basis shall mean the ownership, direct or
indirect, of 20 % or more of the voting rights or capital of
an undertaking;

shall mean a direct or

(cid:145)qualifiying holding(cid:146)
indirect
holding in an undertaking which represents 10 % or more
of the capital or of the voting rights or which makes it
the
possible to exercise a significant
management of
the undertaking in which a holding
subsists.

influence over

11.

(cid:145)initial capital(cid:146) shall mean capital as defined in Article
34(2)(1) and (2);

2.

issued in any
(cid:145)authorisation(cid:146) shall mean an instrument
form by the authorities by which the right to carry on the
business of a credit institution is granted;

12.

(cid:145)parent undertaking(cid:146) shall mean a parent undertaking as
defined in Articles 1 and 2 of Directive 83/349/EEC.

3.

(cid:145)branch(cid:146) shall mean a place of business which forms a
legally dependent part of a credit institution and which
carries out directly all or
the transactions
inherent in the business of credit institutions; any number
of places of business set up in the same Member State by
a credit institution with headquarters in another Member
State shall be regarded as a single branch;

some of

It shall, for the purposes of supervision on a consolidated
basis and control of
large exposures, mean a parent
undertaking within the meaning of Article 1(1) of
Directive 83/349/EEC and any undertaking which, in the
opinion of the competent authorities, effectively exercises
a dominant influence over another undertaking;

4.

(cid:145)competent authorities(cid:146) shall mean the national authorities
which are empowered by law or regulation to supervise
credit institutions;

5.

(cid:145)financial
institution(cid:146) shall mean an undertaking other
than a credit institution, the principal activity of which is
to acquire holdings or to carry on one or more of the
activities listed in points 2 to 12 of Annex I;

13.

(cid:145)subsidiary(cid:146) shall mean a subsidiary undertaking as defined
in Articles 1 and 2 of Directive 83/349/EEC.

It shall, for the purposes of supervision on a consolidated
basis and control of large exposures, mean a subsidiary
undertaking within the meaning of Article 1(1) of
Directive 83/349/EEC and any undertaking over which, in
the opinion of
the competent authorities, a parent
undertaking effectively exercises a dominant influence.

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All subsidiaries of subsidiary undertakings shall also be
considered subsidiaries of the undertaking that is their
original parent;

either exclusively or mainly credit institutions or financial
institutions, one at least of such subsidiaries being a credit
institution;

14.

full members

countries which are

(cid:145)Zone A(cid:146) shall comprise all the Member States and all
other
the
Organisation for Economic Cooperation and Development
(OECD) and those countries which have concluded special
lending arrangements with the International Monetary
associated with
Fund
general
(IMF)
the
to borrow (GAB). Any country which
arrangements
reschedules
is, however,
precluded from Zone A for a period of five years;

sovereign debt

its external

Fund’s

of

15.

(cid:145)Zone B(cid:146) shall comprise all countries not in Zone A;

16.

authorised

institutions(cid:146)

the Member

shall mean all

credit
(cid:145)Zone A credit
in
institutions
in
accordance with Article 4,
including their branches in
third countries, and all private and public undertakings
covered by the definitions in point 1, first subparagraph
and authorised in other Zone A countries, including their
branches;

States,

17.

(cid:145)Zone B credit
institutions(cid:146) shall mean all private and
public undertakings authorised outside Zone A covered
by the definition in point 1, first subparagraph, including
their branches within the Community;

18.

19.

20.

21.

(cid:145)non-bank sector(cid:146) shall mean all borrowers other than
credit institutions as defined in points 16 and 17, central
governments and central banks, regional governments
and local authorities,
the
European
and multilateral
Investment
development banks as defined in point 19;

the European Communities,

Bank

(EIB)

banks(cid:146)

development

shall mean

the Asian Development Bank,

(cid:145)multilateral
the
International Bank for Reconstruction and Development,
the International Finance Corporation, the Inter-American
Development Bank,
the
the Council of Europe
African Development Bank,
the
Resettlement Fund,
the European Bank for
Caribbean Development Bank,
Reconstruction
European
Investment Fund and the Inter-American Investment
Corporation;

the Nordic Investment Bank,

Development,

and

the

(cid:147)medium-risk(cid:148),

(cid:145)(cid:147)full-risk(cid:148),
and
(cid:147)low-risk(cid:148) off-balance-sheet items(cid:146) shall mean the items
described in Article 43(2) and listed in Annex II;

(cid:147)medium/low-risk(cid:148)

(cid:145)financial holding company(cid:146)
institution,

financial
the subsidiary undertakings of which are

shall mean a

22.

(cid:145)mixed-activity holding company(cid:146) shall mean a parent
undertaking, other than a financial holding company or a
credit institution the subsidiaries of which include at least
one credit institution;

23.

(cid:145)ancillary banking services undertaking(cid:146) shall mean an
undertaking the principal activity of which consists in
owning or managing property, managing data-processing
services, or any other similar activity which is ancillary to
the principal activity of one or more credit institutions;

24.

(cid:145)exposures(cid:146) for the purpose of applying Articles 48, 49
and 50 shall mean the assets and off-balance-sheet items
referred to in Article 43 and in Annexes II and IV thereto,
without application of the weightings or degrees of risk
there provided for; the risks referred to in Annex IV must
be calculated in accordance with one of the methods set
out in Annex III, without application of the weightings
for counterparty risk; all elements entirely covered by
own funds may, with the agreement of the competent
authorities, be excluded from the definition of exposures
provided that such own funds are not included in the
calculation of the solvency ratio or of other monitoring
in this Directive and in other
ratios provided for
Community acts; exposures shall not include:

(cid:151) in the

case of

transactions,
course of
exposures
settlement during the 48 hours following payment, or

foreign exchange

in the ordinary

incurred

(cid:151) in the case of transactions for the purchase or sale of
securities, exposures incurred in the ordinary course
of settlement during the five working days following
payment or delivery of the securities, whichever is the
earlier;

25.

(cid:145)group of connected clients(cid:146) shall mean:

(cid:151) two or more natural or legal persons who, unless it is
shown otherwise, constitute a single risk because one
of them, directly or indirectly, has control over the
other or others or

(cid:151) two or more natural or legal persons between whom
there is no relationship of control as defined in the
first indent but who are to be regarded as constituting
a single risk because they are so interconnected that,
if one of them were to experience financial problems,
the other or all of
the others would be likely to
encounter repayment difficulties;

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26.

(cid:145)close links(cid:146) shall mean a situation in which two or more
natural or legal persons are linked by:

The institutions permanently excluded by paragraph 3, with
the exception, however, of the Member States’ central banks,
shall be treated as financial
institutions for the purposes of
Articles 25 and 52 to 56.

(a) participation, which shall mean the ownership, direct
or by way of control, of 20 % or more of the voting
rights or capital of an undertaking, or

(b) control, which shall mean the relationship between a
parent undertaking and a subsidiary, in all the cases
referred to in Article 1(1) and (2) of Directive
83/349/EEC, or a similar relationship between any
natural or
legal person and an undertaking; any
subsidiary undertaking of a subsidiary undertaking
shall also be considered a subsidiary of the parent
undertaking which
those
at
undertakings.

head

the

of

is

A situation in which two or more natural or legal
persons are permanently linked to one and the same
person by a control relationship shall also be regarded
as constituting a close link between such persons.

27.

(cid:145)recognised exchanges(cid:146) shall mean exchanges recognised
by the competent authorities which:

(i)

function regularly,

(ii) have rules,

issued or approved by the appropriate
authorities of the home country of
the exchange,
which define the conditions for the operation of the
exchange, the conditions of access to the exchange as
well as the conditions that must be satisfied by a
contract before it can effectively be dealt on the
exchange,

(iii) have

a

clearing mechanism that provides

for
contracts listed in Annex IV to be subject to daily
an appropriate
margin
providing
protection in the opinion of
competent
the
authorities.

requirements

Article 2

Scope

1.
This Directive concerns the taking up and pursuit of the
business of credit institutions. This Directive shall apply to all
credit institutions.

3.

This Directive shall not apply to:

(cid:151) the central banks of Member States,

(cid:151) post office giro institutions,

(cid:151) in

Belgium,

de RØescompte
Garantie/Herdiscontering- en Waarborginstituut(cid:146),

(cid:145)Institut

the

et

de

(cid:151) in Denmark,
(cid:145)Danmarks
Realkreditfond(cid:146),

the (cid:145)Dansk Eksportfinansieringsfond(cid:146),
and

Skibskreditfond(cid:146),

the
Landbrugs

(cid:145)Dansk

the
which

(cid:145)Kreditanstalt

(cid:151) in Germany,
f(cid:252)r Wiederaufbau(cid:146),
undertakings
the
under
as bodies of State
(cid:145)Wohnungsgemeinn(cid:252)tzigkeitsgesetz(cid:146)
housing policy and are not mainly engaged in banking
transactions, and undertakings recognised under that law
as non-profit housing undertakings,

recognised

are

(cid:151) in Greece, the (cid:145)Ekkgmij(cid:222) Sq(cid:220)pefa Biolgvamij(cid:222)y Amaps(cid:253)nexy,(cid:146),
the (cid:145)Sale(cid:223)o
(Elliniki Trapeza Viomichanikis Anaptyxeos),
Paqajasahgj(cid:254)m jai Dame(cid:223)xm(cid:146)
(Tamio Parakatathikon kai
Danion), and the (cid:145)Savtdqolij(cid:252) Saliets(cid:222)qio(cid:146) (Tachidromiko
Tamieftirio),

(cid:151) in Spain, the (cid:145)Instituto de CrØdito Oficial(cid:146),

(cid:151) in France, the (cid:145)Caisse des dØp(cid:244)ts et consignations(cid:146),

(cid:151) in Ireland, credit unions and the friendly societies,

(cid:151) in Italy, the (cid:145)Cassa depositi e prestiti(cid:146),

(cid:151) in the Netherlands,

the (cid:145)Netherlandse Investeringsbank
(cid:145)NV Noordelijke
voor Ontwikkelingslanden NV(cid:146),
Ontwikkelingsmaatschappij(cid:146),
Industriebank
the
Limburgs Instituut voor Ontwikkeling en Financiering(cid:146) and
the (cid:145)Overijsselse Ontwikkelingsmaatschappij NV(cid:146),

(cid:145)NV

the

2.
Articles 25 and 52 to 56 shall also apply to financial
holding companies and mixed-activity holding companies
which have their head offices in the Community.

(cid:151) in Austria, undertakings recognised as housing associations
in the public interest and the (cid:145)(cid:214)sterreichische Kontrollbank
AG(cid:146),

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(cid:151) in Portugal,

(cid:145)Caixas Econ(cid:243)micas(cid:146) existing on 1 January
1986 with the exception of those incorporated as limited
companies and of the (cid:145)Caixa Econ(cid:243)mica Montepio Geral(cid:146),

Credit
institutions operating locally which are affiliated,
subsequent to 15 December 1977, to a central body within
the meaning of the first subparagraph, may benefit from the
conditions
they constitute normal
additions to the network belonging to that central body.

laid down therein if

(cid:151) in Finland, the (cid:145)Teollisen yhteisty(cid:246)n rahasto Oy/Fonden f(cid:246)r
industriellt samarbete AB(cid:146), and the (cid:145)Kera Oy/Kera Ab(cid:146),

(cid:151) in Sweden, the (cid:145)Svenska Skeppshypotekskassan(cid:146),

(cid:151) in the United Kingdom, the National Savings Bank, the
Commonwealth Development Finance Company Ltd, the
Agricultural Mortgage Corporation Ltd,
Scottish
Agricultural Securities Corporation Ltd, the Crown Agents
for overseas governments
credit
unions and municipal banks.

and administrations,

the

4.
The Council, acting on a proposal from the Commission,
which, for this purpose, shall consult the Committee referred
to in Article 57 (hereinafter
the (cid:145)Banking
Advisory Committee(cid:146)) shall decide on any amendments to the
list in paragraph 3.

referred to as

Credit institutions situated in the same Member State and
5.
permanently affiliated, on 15 December 1977, to a central
body which supervises them and which is established in that
same Member State, may be exempted from the requirements
of Articles 6(1), 8 and 59 if, no later than 15 December 1979,
national law provides that:

the central body and affiliated
(cid:151) the commitments of
joint
the
and several
its affiliated institutions are entirely

institutions
are
commitments of
guaranteed by the central body,

liabilities or

(cid:151) the solvency and liquidity of the central body and of all
the affiliated institutions are monitored as a whole on the
basis of consolidated accounts,

(cid:151) the management of the central body is empowered to issue
affiliated
the management

the

to

of

instructions
institutions.

In the case of credit institutions other than those which are set
up in areas newly reclaimed from the sea or have resulted
from scission or mergers of existing institutions dependent or
answerable to the central body,
the Council, acting on a
proposal from the Commission, which shall for this purpose,
consult
the Banking Advisory Committee, may lay down
additional rules for the application of the second subparagraph
including the repeal of exemptions provided for in the first
subparagraph, where it is of the opinion that the affiliation of
new institutions benefiting from the arrangements laid down
in the second subparagraph might have an adverse effect on
competition. The Council shall decide by a qualified majority.

A credit

6.
institution which, as defined in the first
subparagraph of paragraph 5, is affiliated to a central body in
the same Member State may also be exempted from the
provisions of Article 5, and also Articles 40 to 51, and 65
provided that, without prejudice to the application of those
provisions to the central body, the whole as constituted by the
central body together with its affiliated institutions is subject to
the abovementioned provisions a consolidated basis.

In case of exemption, Articles 13, 18, 19, 20(1) to (6), 21 and
22 shall apply to the whole as constituted by the central body
together with its affiliated institutions.

Article 3

Prohibition for undertakings other than credit institutions
from carrying on the business of taking deposits or other
repayable funds from the public

The Member States shall prohibit persons or undertakings that
are not credit institutions from carrying on the business of
taking deposits or other repayable funds from the public. This
prohibition shall not apply to the taking of deposits or other
funds repayable by a Member State or by a Member State’s
regional or local authorities or by public international bodies
of which one or more Member States are members or to cases
expressly covered by national or Community legislation,
provided that those activities are subject to regulations and
controls intended to protect depositors and investors and
applicable to those cases.

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TITLE II

REQUIREMENTS FOR ACCESS TO THE TAKING UP AND PURSUIT OF THE BUSINESS OF
CREDIT INSTITUTIONS

Article 4

Authorisation

shall

to obtain
require credit
Member States
authorisation before commencing their activities. They shall lay
down the requirements
to
Articles 5 to 9, and notify them to both the Commission and
the Banking Advisory Committee.

such authorisation subject

institutions

for

Article 5

Initial capital

3.
A credit institution’s own funds may not fall below the
amount of initial capital required by paragraphs 1 and 2 at the
time of its authorisation.

4.
The Member States may decide that credit institutions
already in existence on 1 January 1993, the own funds of
which do not attain the levels prescribed for initial capital in
paragraphs 1 and 2, may continue to carry on their activities.
In that event, their own funds may not fall below the highest
level reached with effect from 22 December 1989.

If control of a credit

5.
institution falling within the
category referred to in paragraph 4 is taken by a natural or
than the person who controlled the
legal person other
institution previously, the own funds of that institution must
attain at
in
the level prescribed for
paragraphs 1 and 2.

initial capital

least

1. Without prejudice to other general conditions laid down
the competent authorities shall not grant
by national
law,
authorisation when the credit
institution does not possess
separate own funds or in cases where initial capital is less than
EUR 5 million.

Member States may decide that credit institutions which do
not fulfil the requirement of separate own funds and which
were in existence on 15 December 1979 may continue to
carry on their business. They may exempt
such credit
institutions from complying with the requirement contained in
the first subparagraph of Article 6(1).

6.
In certain specific circumstances and with the consent of
the competent authorities, where there is a merger of two or
more credit institutions falling within the category referred to
in paragraph 4, the own funds of the institution resulting from
the merger may not fall below the total own funds of the
merged institutions at the time of the merger, as long as the
appropriate levels pursuant to paragraphs 1 and 2 have not
been attained.

7.
If, in the cases referred to in paragraphs 3, 4 and 6, the
own funds should be reduced, the competent authorities may,
where the circumstances justify it, allow an institution a
limited period in which to rectify its situation or cease its
activities.

The Member States shall, however, have the option of
credit
than that

2.
granting authorisation to particular
institutions
prescribed in paragraph 1. In such cases:

the initial capital of which is

categories of
less

Article 6

(a)

the initial capital shall not be less than EUR 1 million,

Management body and place of the head office of credit
institutions

(b) the Member States concerned must notify the Commission
of their reasons for making use of the option provided for
in this paragraph,

1.
The competent authorities shall grant an authorisation to
the credit institution only when there are at least two persons
who effectively direct the business of the credit institution.

(c) when the list referred to in Article 11 is published, the
name of each credit institution that does not have the
minimum capital prescribed in paragraph 1 shall be
annotated to that effect.

Moreover,
the
authorisation if
repute or lack sufficient experience to perform such duties.

authorities
grant
these persons are not of sufficiently good

concerned

shall

not

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2.

Each Member State shall require that:

(cid:151) any credit institution which is a legal person and which,
under its national law, has a registered office have its head
office in the same Member State as its registered office,

(cid:151) any other credit

institution have its head office in the
Member State which issued its authorisation and in which
it actually carries on its business.

Article 7

Shareholders and members

1.
The competent authorities shall not grant authorisation
for the taking-up of the business of credit institutions before
they have been informed of the identities of the shareholders
or members, whether direct or
legal
persons, that have qualifying holdings, and of the amounts of
those holdings.

indirect, natural or

For the purpose of the definition of qualifying holding in the
context of this Article, the voting rights referred to in Article 7
of Council Directive 88/627/EEC (1)
shall be taken into
consideration.

2.
The competent authorities shall refuse authorisation if,
taking into account the need to ensure the sound and prudent
management of a credit institution, they are not satisfied as to
the
shareholders or
members.

abovementioned

suitability of

the

3. Where close links exist between the credit institution and
other natural or legal persons, the competent authorities shall
the
grant authorisation only if
effective exercise of their supervisory functions.

those links do not prevent

The competent authorities shall require credit institutions to
provide them with the information they require to monitor
compliance with the conditions referred to in this paragraph
on a continuous basis.

Article 8

Programme of operations and structural organisation

Member States shall require applications for authorisation to
be accompanied by a programme of operations setting out,
inter alia, the types of business envisaged and the structural
organisation of the institution.

Article 9

Economic needs

States may

Member
for
authorisation to be examined in terms of the economic needs
of the market.

application

require

not

the

Article 10

Authorisation refusal

receipt of

Reasons shall be given whenever an authorisation is refused
and the applicant shall be notified thereof within six months
latter be
of
incomplete, within six months of the applicant’s sending the
information required for the decision. A decision shall, in any
case, be taken within 12 months of
the
application.

the application or,

the receipt of

should the

Article 11

Notification of the authorisation to the Commission

institution shall be

Every authorisation shall be notified to the Commission. Each
entered in a list which the
credit
Commission shall publish in the Official Journal of the European
Communities and shall keep up to date.

The competent authorities shall also refuse authorisation if the
laws, regulations or administrative provisions of a non-member
country governing one or more natural or legal persons with
which the credit
institution has close links, or difficulties
involved in their enforcement, prevent the effective exercise of
their supervisory functions.

Article 12

Prior consultation with the competent authorities of
other Member States

(1) Council Directive 88/627/EEC of 12 December 1988 on the
information to be published when a major holding in a listed
company is acquired or disposed of (OJ L 348, 17.12.1988, p. 62).

There must be prior
authorities of
authorisation of a credit institution which is:

competent
consultation with the
the other Member State involved on the

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26.5.2000

(cid:151) a subsidiary of a credit institution authorised in another

Member State, or

(cid:151) a subsidiary of

the parent undertaking of a credit

institution authorised in another Member State, or

(cid:151) controlled by the same persons, whether natural or legal,
institution authorised in another

as control a credit
Member State.

Article 13

Branches of credit institutions authorised in another
Member State

authorisation or
Host Member States may not
endowment
institutions
capital
authorised in other Member States. The establishment and
supervision of such branches shall be effected as prescribed in
Articles 17, 20(l) to (6) and Articles 22 and 26.

branches of

require

credit

for

Article 14

Withdrawal of authorisation

The

competent

1.
authorities may withdraw the
authorisation issued to a credit institution only where such an
institution:

(a) does not make use of the authorisation within 12 months,
expressly renounces the authorisation or has ceased to
engage in business for more than six months,
the
Member State concerned has made no provision for the
authorisation to lapse in such cases;

if

(b) has obtained the authorisation through false statements or

any other irregular means;

(c) no longer fulfils the conditions under which authorisation

was granted;

(d) no longer possesses sufficient own funds or can no longer
be relied on to fulfil its obligations towards its creditors,
and in particular no longer provides security for the assets
entrusted to it;

(e)

falls within one of
provides for withdrawal of authorisation.

the other cases where national

law

Reasons must

2.
of
authorisation and those concerned informed thereof; such
withdrawal shall be notified to the Commission.

any withdrawal

given for

be

Article 15

Name

in the host Member State, use throughout

For the purpose of exercising their activities, credit institutions
may, notwithstanding any provisions concerning the use of the
(cid:145)savings bank(cid:146) or other banking names which
words (cid:145)bank(cid:146),
the
may exist
territory of the Community the same name as they use in the
Member State in which their head office is situated. In the
event of
the host
there being any danger of confusion,
Member State may, for the purposes of clarification, require
accompanied by certain explanatory
that
particulars.

the name be

Article 16

Qualifiying holding in a credit institution

to hold, directly or

The Member States shall require any natural or legal
1.
person who proposes
indirectly a
qualifying holding in a credit institution first to inform the
competent authorities, telling them of the size of the intended
holding. Such a person must likewise inform the competent
authorities if he proposes to increase his qualifying holding so
that the proportion of the voting rights or of the capital held
by him would reach or exceed 20 %, 33 % or 50 % or so that
the credit institution would become his subsidiary.

the
Without prejudice to the provisions of paragraph 2,
competent authorities shall have a maximum of three months
from the date of
the notification provided for in the first
subparagraph to oppose such a plan if, in view of the need to
credit
ensure
institution, they are not satisfied as to the suitability of the
person referred to in the first subparagraph. If they do not
oppose the plan referred to in the first subparagraph, they may
fix a maximum period for its implementation.

sound and prudent management of

the

2.
If the acquirer of the holdings referred to in paragraph 1
is a credit institution authorised in another Member State or
the parent undertaking of a credit institution authorised in
another Member State or a natural or legal person controlling
a credit institution authorised in another Member State and if,
as a result of that acquisition, the institution,
in which the
acquirer proposes
to hold a holding would become a
the
subsidiary or subject
assessment of the acquisition must be the subject of the prior
consultation referred to in Article 12.

to the control of

the acquirer,

3.
The Member States shall require any natural or legal
person who proposes to dispose, directly or indirectly, of a
qualifying holding in a credit institution first to inform the
competent authorities, telling them of the size of his intended
holding. Such a person must likewise inform the competent

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authorities if he proposes to reduce his qualifying holding so
that the proportion of the voting rights or of the capital held
by him would fall below 20 %, 33 % or 50 % or so that the
credit institution would cease to be his subsidiary.

them, credit

On becoming aware of

institutions shall
4.
inform the competent authorities of any acquisitions or
disposals of holdings in their capital that cause holdings to
exceed or fall below one of
the thresholds referred to in
paragraphs 1 and 3.

They shall also, at least once a year, inform them of the names
of shareholders and members possessing qualifying holdings
and the sizes of such holdings as shown, for example, by the
information received at
the annual general meetings of
shareholders and members or as a result of compliance with
the
listed on stock
exchanges.

to companies

regulations

relating

to the detriment of

5.
The Member States shall require that, where the influence
exercised by the persons referred to in paragraph 1 is likely to
operate
and sound
management of the institution, the competent authorities shall
take appropriate measures to put an end to that situation.
Such measures may consist
for example in injunctions,
sanctions against directors and managers, or the suspension of

the prudent

the exercise of the voting rights attaching to the shares held by
the shareholders or members in question.

Similar measures shall apply to natural or legal persons failing
to comply with the obligation to provide prior information, as
laid down in paragraph 1. If a holding is acquired despite the
opposition of the competent authorities, the Member States
shall, regardless of any other sanctions to be adopted, provide
either for exercise of the corresponding voting rights to be
suspended, or for the nullity of votes cast or for the possibility
of their annulment.

6.
For the purposes of the definition of qualifying holding
and other levels of holding set out in this Article, the voting
rights referred to in Article 7 of Directive 88/627/EEC shall be
taken into consideration.

Article 17

Procedures and internal control mechanisms

credit

Home Member State competent authorities shall require that
and
every
accounting
control
mechanisms.

sound administrative
adequate

institution have

procedures

internal

and

TITLE III

PROVISIONS CONCERNING THE FREEDOM OF ESTABLISHMENT AND THE FREEDOM TO
PROVIDE SERVICES

Article 18

Credit institutions

The Member States shall provide that the activities listed in
in
Annex I may be carried on within their
accordance with Articles 20(1) to (6), 21(1) and (2), and 22,
either by the establishment of a branch or by way of the
provision of services, by any credit institution authorised and
supervised by the competent authorities of another Member
such activities are covered by the
State, provided that
authorisation.

territories,

Article 19

Financial institutions

accordance with Articles 20(1) to (6), 21(1) and (2), and 22,
either by the establishment of a branch or by way of the
provision of services, by any financial institution from another
Member State, whether a subsidiary of a credit institution or
the jointly-owned subsidiary of two or more credit institutions,
the memorandum and articles of association of which permit
the carrying on of those activities and which fulfils each of the
following conditions:

(cid:151) the parent undertaking or undertakings must be authorised
as credit institutions in the Member State by the law of
which the subsidiary is governed,

(cid:151) the activities in question must actually be carried on within

the territory of the same Member State,

(cid:151) the parent undertaking or undertakings must hold 90 % or
more of the voting rights attaching to shares in the capital
of the subsidiary.

The Member States shall also provide that the activities listed
in
in Annex I may be carried on within their territories,

(cid:151) the parent undertaking or undertakings must satisfy the
competent authorities regarding the prudent management
of the subsidiary and must have declared, with the consent

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26.5.2000

of the relevant home Member State competent authorities,
that they jointly and severally guarantee the commitments
entered into by the subsidiary,

(a)

the Member State within the territory of which it plans to
establish a branch;

(cid:151) the

effectively included,

subsidiary must be

the
activities in question in particular,
in the consolidated
supervision of the parent undertaking, or of each of the
parent undertakings, in accordance with Articles 52 to 56,
in particular for the calculation of the solvency ratio, for
large exposures and for purposes of the
the control of
limitation of holdings provided for in Article 51.

for

Compliance with these conditions must be verified by the
competent authorities of the home Member State and the latter
must supply the subsidiary with a certificate of compliance
which must form part of the notification referred to in Articles
20(1) to (6), and 21(1) and (2).

The competent authorities of the home Member State shall
ensure the supervision of the subsidiary in accordance with
Articles 5(3), 16, 17, 26, 28, 29, 30, and 32.

The provisions mentioned in this Article shall apply mutatis
mutandis to subsidiaries, subject to the necessary modifications.
In particular, the words (cid:145)credit institution(cid:146) should be read as
(cid:145)financial
institution fulfilling the conditions laid down in
Article 19(cid:146) and the word (cid:145)authorisation(cid:146) as (cid:145)memorandum and
articles of association(cid:146).

The second subparagraph of Article 20(3) shall read:

(cid:145)The home Member State competent authorities shall also
communicate the amount of own funds of the subsidiary
financial institution and the consolidated solvency ratio of
the credit institution which is its parent undertaking(cid:146).

If a financial institution eligible under this Article should cease
to fulfil any of the conditions imposed, the home Member
State shall notify the competent authorities of
the host
Member State and the activities carried on by that institution
in the host Member State become subject to the legislation of
the host Member State.

Article 20

Exercise of the right of establishment

1.
A credit institution wishing to establish a branch within
the territory of another Member State shall notify the
competent authorities of its Member State.

2.
The Member State shall require every credit institution
wishing to establish a branch in another Member State to
provide
the
following
notification referred to in paragraph 1:

information when effecting

the

(b) a programme of operations setting out, inter alia, the types
of business envisaged and the structural organisation of the
branch;

(c)

the address
documents may be obtained;

in the host Member State from which

(d) the names of those responsible for the management of the

branch.

3.
Unless the competent authorities of the home Member
State have reason to doubt the adequacy of the administrative
structure or the financial situation of the credit institution,
taking into account the activities envisaged, they shall within
three months of receipt of
the information referred to in
paragraph 2 communicate that information to the competent
authorities of the host Member State and shall
inform the
institution accordingly.

The home Member State competent authorities shall also
communicate the amount of own funds and the solvency ratio
of the credit institution.

the

to communicate

Where the competent authorities of the home Member State
information referred to in
refuse
paragraph 2 to the competent authorities of the host Member
State, they shall give reasons for their refusal to the institution
concerned within three months of
the
information. That refusal or failure to reply shall be subject to
a right to apply to the courts in the home Member State.

receipt of

all

4.
Before the branch of a credit institution commences its
activities the competent authorities of the host Member State
shall, within two months of
information
mentioned in paragraph 3, prepare for the supervision of the
credit
institution in accordance with Article 22 and if
necessary indicate the conditions under which, in the interest
of the general good, those activities must be carried on in the
host Member State.

receiving the

5.
On receipt of a communication from the competent
authorities of the host Member State, or in the event of the
expiry of
the period provided for in paragraph 4 without
receipt of any communication from the latter, the branch may
be established and commence its activities.

In the event of a change in any of

6.
the particulars
communicated pursuant to paragraph 2(b), (c) or (d), a credit
institution shall give written notice of the change in question
to the competent authorities of the home and host Member
States at least one month before making the change so as to
enable the competent authorities of the home Member State to
take a decision pursuant to paragraph 3 and the competent
authorities of the host Member State to take a decision on the
change pursuant to paragraph 4.

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7.
in
Branches which have commenced their activities,
accordance with the provisions in force in their host Member
States, before 1 January 1993, shall be presumed to have been
subject to the procedure laid down in paragraphs 1 to 5. They
shall be governed,
abovementioned date, by
paragraph 6, and by Articles 18, 19, 22 and 29.

from the

Article 21

Exercise of the freedom to provide services

1.
Any credit institution wishing to exercise the freedom to
provide services by carrying on its activities within the
territory of another Member State for the first time shall notify
the competent authorities of the home Member State, of the
activities on the list in Annex I which it intends to carry on.

The competent authorities of the home Member State
the notification
send that notification to the

2.
shall, within one month of
mentioned in paragraph 1,
competent authorities of the host Member State.

receipt of

This Article shall not affect rights acquired by credit

3.
institutions providing services before 1 January 1993.

Article 22

Power of the competent authorities of the host
Member State

credit

Host Member States may, for statistical purposes, require
1.
that all
institutions having branches within their
territories shall report periodically on their activities in those
host Member States to the competent authorities of those host
Member States.

responsibilities

In discharging the
imposed on them in
Article 27, host Member States may require that branches of
credit institutions from other Member States provide the same
information as they require from national credit institutions
for that purpose.

3.
If the institution concerned fails to take the necessary
steps, the competent authorities of the host Member State shall
inform the competent authorities of the home Member State
accordingly. The competent authorities of the home Member
State shall, at
take all appropriate
measures to ensure that the institution concerned puts an end
to that irregular situation. The nature of those measures shall
be communicated to the competent authorities of the host
Member State.

the earliest opportunity,

4.
If, despite the measures taken by the home Member State
or because such measures prove inadequate or are not
available in the Member State in question,
the institution
persists in violating the legal rules referred to in paragraph 2
in force in the host Member State, the latter State may, after
informing the competent authorities of
the home Member
State,
take appropriate measures to prevent or to punish
further irregularities and, in so far as is necessary, to prevent
that institution from initiating further transactions within its
territory. The Member States shall ensure that within their
territories it is possible to serve the legal documents necessary
for these measures on credit institutions.

5.
The provisions of paragraph 1 to 4 shall not affect the
power of host Member States to take appropriate measures to
prevent or to punish irregularities committed within their
territories which are contrary to the legal rules they have
adopted in the interest of the general good. This shall include
the possibility of preventing offending institutions
from
initiating any further transactions within their territories.

Any measure adopted pursuant to paragraph 3, 4 and 5
6.
involving penalties or
the
freedom to provide services must be properly justified and
communicated to the
institution concerned. Every such
measure shall be subject to a right of appeal to the courts in
the Member State the authorities of which adopted it.

restrictions on the exercise of

7.
Before following the procedure provided for in paragraph
2, 3 and 4, the competent authorities of the host Member
State may,
in emergencies, take any precautionary measures
necessary to protect the interests of depositors, investors and
others to whom services are provided. The Commission and
the
the other Member States
concerned must be informed of such measures at the earliest
opportunity.

authorities of

competent

The Commission may,
competent
authorities of the Member States concerned, decide that the
Member State in question must amend or abolish those
measures.

consulting

after

the

2. Where the competent authorities of a host Member State
ascertain than an institution having a branch or providing
services within its territory is not complying with the legal
provisions adopted in that State pursuant to the provisions of
this Directive involving powers of the host Member State’s
competent authorities,
require the
institution concerned to put an end to that irregular situation.

those authorities

shall

Host Member States may exercise the powers conferred
8.
on them under this Directive by taking appropriate measures
to prevent or to punish irregularities committed within their
territories. This shall
include the possibility of preventing
institutions from initiating further transactions within their
territories.

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9.
In the event of
the withdrawal of authorisation the
the host Member State shall be
competent authorities of
informed and shall take appropriate measures to prevent the
institution concerned from initiating further
transactions
within its territory and to safeguard the interests of depositors.
Every two years the Commission shall submit a report on such
cases to the Banking Advisory Committee.

10.
The Member States shall inform the Commission of the
number and type of cases in which there has been a refusal
pursuant to Article 20(1) to (6) or in which measures have

been taken in accordance with paragraph 4 of this Article.
Every two years the Commission shall submit a report on such
cases to the Banking Advisory Committee.

Nothing in this Article shall prevent credit institutions
11.
with head offices in other Member States from advertising
their services through all available means of communication in
the host Member State, subject to any rules governing the
form and the content of such advertising adopted in the
interest of the general good.

TITLE IV

RELATIONS WITH THIRD COUNTRIES

Article 23

Notification of the subsidiaries of third countries’
undertakings and conditions of access to the markets of
these countries

carrying-on of banking activities, and the acquisition of
holdings in third-country credit institutions. The Commission
shall submit those reports to the Council, together with any
appropriate proposals.

The competent authorities of the Member States shall

1.
inform the Commission:

(a) of any authorisation of a direct or indirect subsidiary one
or more parent undertakings of which are governed by the
laws of a third country. The Commission shall inform the
Banking Advisory Committee accordingly;

(b) whenever such a parent undertaking acquires a holding in
a Community credit institution such that the latter would
become its subsidiary. The Commission shall
inform the
Banking Advisory Committee accordingly.

When authorisation is granted to the direct or
indirect
subsidiary of one or more parent undertakings governed by
the law of third countries, the structure of the group shall be
specified in the notification which the competent authorities
shall address to the Commission in accordance with Article 11.

The Member States shall inform the Commission of any
2.
general difficulties encountered by their credit institutions in
establishing themselves or carrying on banking activities in a
third country.

credit

4. Whenever it appears to the Commission, either on the
basis of the reports referred to in paragraph 3 or on the basis
that a third country is not granting
of other information,
Community
access
institutions
comparable to that granted by the Community to credit
the Commission may
third country,
institutions from that
submit proposals to the Council for the appropriate mandate
for negotiation with a
comparable
competitive opportunities for Community credit institutions.
The Council shall decide by a qualified majority.

view to obtaining

effective market

5. Whenever it appears to the Commission, either on the
basis of the reports referred to in paragraph 3 or on the basis
of other information that Community credit institutions in a
third country do not receive national treatment offering the
same competitive opportunities as are available to domestic
credit institutions and the conditions of effective market access
are not fulfilled, the Commission may initiate negotiations in
order to remedy the situation.

In the circumstances described in the first subparagraph,
it
may also be decided at any time, and in addition to initiating
negotiations, in accordance with the procedure laid down in
Article 60(2), that the competent authorities of the Member
States must limit or suspend their decisions regarding requests
pending at the moment of the decision or future requests for
authorisations and the acquisition of holdings by direct or
indirect parent undertakings governed by the laws of the third
country in question. The duration of the measures referred to
may not exceed three months.

3.
The Commission shall periodically draw up a report
examining the treatment accorded to Community credit
in the terms referred to in
institutions in third countries,
regards establishment and the
paragraphs 4 and 5, as

Before the end of that three-month period, and in the light of
the results of the negotiations, the Council may, acting on a
proposal from the Commission, decide by a qualified majority
whether the measures shall be continued.

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Such limitations or suspension may not apply to the setting up
of subsidiaries by credit institutions or their subsidiaries duly
authorised in the Community, or to the acquisition of holdings
in Community credit
institutions by such institutions or
subsidiaries.

with one or more third countries, agree to apply provisions
which, on the basis of the principle of reciprocity, accord to
branches of a credit institution having its head office outside
the Community identical treatment throughout the territory of
the Community.

6. Whenever it appears to the Commission that one of the
situations described in paragraphs 4 and 5 obtains,
the
Member States shall inform it at its request:

Article 25

(a) of any request for the authorisation of a direct or indirect
subsidiary one or more parent undertakings of which are
governed by the laws of the third country in question;

(b) whenever they are informed in accordance with Article 16
that such an undertaking proposes to acquire a holding in
a Community credit institution such that the latter would
become its subsidiary.

This obligation to provide information shall lapse whenever an
agreement is reached with the third country referred to in
paragraph 4 or 5 or when the measures referred to in the
second and third subparagraphs of paragraph 5 cease to apply.

7. Measures taken pursuant to this Article comply with the
Community’s obligations under any international agreements,
bilateral or multilateral, governing the taking-up and pursuit of
the business of credit institutions.

Article 24

Branches of credit institutions having their head offices
outside the Community

1. Member States shall not apply to branches of credit
institutions having their head office outside the Community,
when commencing or carrying on their business, provisions
which result in more favourable treatment than that accorded
to branches of credit institutions having their head office in
the Community.

2.
The competent authorities shall notify the Commission
and the Banking Advisory Committee of all authorisations for
branches granted to credit institutions having their head office
outside the Community.

Cooperation with third countries’ competent authorities
regarding supervision on a consolidated basis

The Commission may submit proposals to the Council,
1.
either at
the request of a Member State or on its own
initiative, for the negotiation of agreements with one or more
third countries regarding the means of exercising supervision
on a consolidated basis over:

(cid:151) credit institutions the parent undertakings of which have

their head offices situated in a third country, and

(cid:151) credit

institutions situated in third countries the parent
undertakings of which, whether credit
institutions or
financial holding companies, have their head offices in the
Community.

The agreements referred to in paragraph 1 shall

2.
particular seek to ensure both:

in

to obtain the

information necessary

(cid:151) that the competent authorities of the Member States are
able
the
supervision, on the basis of their consolidated financial
situations, of
financial holding
companies situated in the Community and which have as
subsidiaries credit
institutions
situated outside the Community, or holding participation
in such institutions,

institutions or

institutions or

financial

credit

for

(cid:151) that the competent authorities of third countries are able
to obtain the information necessary for the supervision of
parent undertakings the head offices of which are situated
within their territories and which have as subsidiaries
credit institutions or financial institutions situated in one
or more Member States or holding participation in such
institutions.

3. Without prejudice to paragraph 1, the Community may,
through agreements concluded in accordance with the Treaty

3.
The Commission and the Banking Advisory Committee
shall examine the outcome of the negotiations referred to in
paragraph 1 and the resulting situation.

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TITLE V

PRINCIPLES AND TECHNICAL INSTRUMENTS FOR PRUDENTIAL SUPERVISION

CHAPTER 1

Article 29

PRINCIPLES OF PRUDENTIAL SUPERVISION

On-the-spot verification of branches established in
another Member State

Article 26

Competence of control of the home Member State

a

The prudential

1.
institution,
supervision of
including that of the activities it carries on accordance with
Articles 18 and 19,
the
the home Member State, without
competent authorities of
prejudice to those provisions of
this Directive which give
responsibility to the authorities of the host Member State.

shall be the responsibility of

credit

2.
Paragraph 1 shall not prevent
consolidated basis pursuant to this Directive.

supervision on a

Article 27

Competence of the host Member State

the liquidity of

Host Member States shall retain responsibility in cooperation
with the competent authorities of the home Member State for
the branches of credit
the supervision of
institutions pending further coordination. Without prejudice to
the measures necessary for the reinforcement of the European
Monetary System, host Member States shall retain complete
responsibility
from the
implementation of their monetary policies. Such measures may
not provide for discriminatory or restrictive treatment based
on the fact that a credit institution is authorised in another
Member State.

the measures

resulting

for

Article 28

Collaboration concerning supervision

1.
Host Member States shall provide that, where a credit
institution authorised in another Member State carries on its
activities through a branch, the competent authorities of the
home Member State may, after having first
informed the
competent authorities of the host Member State, carry out
they
themselves or
the
appoint
information referred to in Article 28.

through the intermediary of persons
that purpose on-the-spot verification of

for

2.
The competent authorities of the home Member State
may also, for purposes of the verification of branches, have
recourse to one of the other procedures laid down in Article
56(7).

This Article shall not affect the right of the competent
3.
in the
the host Member State to carry out,
authorities of
discharge of
this Directive,
responsibilities under
their
on-the-spot verifications of branches established within their
territory.

Article 30

Exchange of information and professional secrecy

The Member States shall provide that all persons working
1.
or who have worked for the competent authorities, as well as
auditors or experts acting on behalf of
the competent
authorities, shall be bound by the obligation of professional
information which
secrecy. This means that no confidential
they may receive in the course of their duties may be divulged
to any person or authority whatsoever, except in summary or
collective form, such that
institutions cannot be
identified, without prejudice to cases covered by criminal law.

individual

The competent authorities of the Member States concerned
shall collaborate closely in order to supervise the activities of
credit institutions operating, in particular by having established
branches there, in one or more Member States other than that
in which their head offices are situated. They shall supply one
another with all information concerning the management and
ownership of such credit institutions that is likely to facilitate
their supervision and the examination of the conditions for
their authorisation, and all information likely to facilitate the
in particular with regard to
monitoring of such institutions,
liquidity, solvency, deposit guarantees,
large
the limiting of
exposures, administrative and accounting procedures and
internal control mechanisms.

Nevertheless, where a credit
institution has been declared
bankrupt or is being compulsorily wound up, confidential
information which does not concern third parties involved in
attempts to rescue that credit institution may be divulged in
civil or commercial proceedings.

Paragraph 1 shall not prevent the competent authorities
2.
of the various Member States from exchanging information in
accordance with this Directive and with other Directives
applicable to credit
information shall be
institutions. That
subject to the conditions of professional secrecy indicated in
paragraph 1.

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3. Member States may conclude cooperation agreements,
providing for exchanges of information, with the competent
authorities of third countries or with authorities or bodies of
third countries as defined in paragraphs 5 and 6 only if the
information disclosed is subject to guarantees of professional
secrecy at least equivalent to those referred to in this Article.
Such exchange of
information must be for the purpose of
performing the supervisory task of the authorities or bodies
mentioned.

(cid:151) persons responsible for carrying out statutory audits of the
financial

and other

institutions

credit

accounts of
institutions,

their

supervisory functions, and the
in the discharge of
to bodies which administer deposit-guarantee
disclosure
schemes of
their
functions. The information received shall be subject to the
conditions of professional secrecy indicated in paragraph 1.

information necessary to the exercise of

Where the information originates in another Member State, it
may not be disclosed without the express agreement of the
competent authorities which have disclosed it and, where
appropriate, solely for the purposes for which those authorities
gave their agreement.

6.
Notwithstanding paragraphs 1 to 4, Member States may
authorise exchanges of information between, the competent
authorities and:

4.
Competent authorities receiving confidential information
under paragraphs 1 or 2 may use it only in the course of their
duties:

(cid:151) the authorities

responsible for overseeing the bodies,
involved in the liquidation and bankruptcy of credit
institutions and other similar procedures, or

(cid:151) to check that the conditions governing the taking-up of
the business of credit institutions are met and to facilitate
monitoring, on a non-consolidated or consolidated basis,
of the conduct of such business, especially with regard to
the monitoring of liquidity, solvency, large exposures, and
administrative and accounting procedures and internal
control mechanisms, or

(cid:151) to impose sanctions, or

(cid:151) in an administrative appeal against a decision of

the

competent authority, or

(cid:151) in court proceedings initiated pursuant to Article 33 or to
special provisions provided for in this in other Directives
adopted in the field of credit institutions.

5.
Paragraphs 1 and 4 shall not preclude the exchange of
information within a Member State, where there are two or
more competent authorities in the same Member State, or
between Member States, between competent authorities and:

(cid:151) authorities entrusted with the public duty of supervising
other financial organisations and insurance companies and
the authorities responsible for the supervision of financial
markets,

(cid:151) bodies involved in the liquidation and bankruptcy of credit

institutions and in other similar procedures,

(cid:151) the authorities responsible for overseeing persons charged
the accounts of
investment

with carrying out statutory audits of
insurance undertakings,
firms and other financial institutions.

institutions,

credit

Member States which have recourse to the provisions of the
the following
first subparagraph shall require at
conditions are met:

least

that

(cid:151) the information shall be for the purpose of performing the
supervisory task referred to in the first subparagraph,

(cid:151) information received in this context shall be subject to the
conditions of professional secrecy imposed in paragraph 1,

(cid:151) where the information originates in another Member State,
it may not be disclosed without the express agreement of
the competent authorities which have disclosed it and,
where appropriate, solely for the purposes for which those
authorities gave their agreement.

Member States shall communicate to the Commission and to
the other Member States the name of the authorities which
may receive information pursuant to this paragraph.

Notwithstanding paragraphs 1 to 4, Member States may,
7.
with the aim of strengthening the stability, including integrity,
of the financial system, authorise the exchange of information
between the competent authorities and the authorities or
bodies
and
investigation of breaches of company law.

responsible

detection

law for

under

the

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Member States which have recourse to the provision in the
the following
first subparagraph shall require at
conditions are met:

least

that

(cid:151) the information shall be for the purpose of performing the

task referred to in the first subparagraph,

9.
In addition, notwithstanding the provisions referred to in
paragraphs 1 and 4, the Member States may, by virtue of
provisions laid down by law, authorise the disclosure of certain
information to other departments of their central government
administrations responsible for legislation on the supervision
of credit institutions financial institutions, investment services
and insurance companies and to inspectors acting on behalf of
those departments.

(cid:151) information received in this context shall be subject to the
conditions of professional secrecy imposed in paragraph 1,

However, such disclosures may be made only where necessary
for reasons of prudential control.

(cid:151) where the information originates in another Member State,
it may not be disclosed without the express agreement of
the competent authorities which have disclosed it and,
where appropriate, solely for the purposes for which those
authorities gave their agreement.

Where, in a Member State, the authorities or bodies referred to
in the first subparagraph perform their task of detection or
investigation with the aid, in view of their specific competence,
of persons appointed for that purpose and not employed in
the public sector, the possibility of exchanging information
provided for in the first subparagraph may be extended to
such persons under the conditions stipulated in the second
subparagraph.

to implement

the third indent of

In order
the second
subparagraph, the authorities or bodies referred to in the first
subparagraph shall communicate to the competent authorities
which have disclosed the information, the names and precise
responsibilities of the persons to whom it is to be sent.

Member States shall communicate to the Commission and to
the other Member States the names of the authorities or bodies
which may receive information pursuant to this paragraph.

Before 31 December 2000, the Commission shall draw up a
report on the application of the provisions of this paragraph.

This Article shall not prevent a competent authority from

8.
transmitting:

(cid:151) to central banks and other bodies with a similar function

in their capacity as monetary authorities,

(cid:151) where appropriate to other public authorities responsible

for overseeing payment systems,

information intended for the performance of their task, nor
shall it prevent such authorities or bodies from communicating
to the competent authorities such information as they may
need for the purposes of paragraph 4. Information received in
this context shall be subject to the conditions of professional
secrecy imposed in this Article.

However, the Member States shall provide that information
received under paragraphs 2 and 5 and that obtained by
means of the on-the-spot verification referred to in Article
29(1) and (2) may never be disclosed in the cases referred to in
the
this paragraph except with the express consent of
competent authorities which disclosed the information or of
the competent authorities of
the Member State in which
on-the-spot verification was carried out.

their Member States’ markets if

10.
This Article shall not prevent the competent authorities
from communicating the information referred to in paragraphs
1 to 4 to a clearing house or other similar body recognised
under national law for the provision of clearing or settlement
services for one of
they
consider that it is necessary to communicate the information
in order to ensure the proper functioning of those bodies in
relation to defaults or potential defaults by market participants.
The information received in this context shall be subject to the
conditions of professional secrecy imposed in paragraph 1.
The Member States shall, however, ensure that information
received under paragraph 2 may not be disclosed in the
circumstances referred to in this paragraph without the express
consent of the competent authorities which disclosed it.

Article 31

Duty of persons responsible for the legal control of
annual and consolidated accounts

1. Member States shall provide at least that:

(a) any person authorised within the meaning of Council
Directive 84/253/EEC (1), performing in a credit institution
the task described in Article 51 of Council Directive
78/660/EEC (2), or Article 37 of Council Directive

(1) Eighth Council Directive (84/253/EEC) of 10 April 1984 based on
the Treaty on the approval of persons
the statutory audits of accounting

Article 44(2)(g) of
responsible for carrying out
documents (OJ L 126, 12.5.1984, p. 20).

(2) Fourth Council Directive (78/660/EEC) of 25 July 1978 based on
Article 44(2)(g) of the Treaty on the annual accounts of certain
types of companies (OJ L 222, 14.8.1978, p. 11). Directive as last
amended by Directive 1999/60/EC (OJ L 62, 26.6.1999, p. 65).

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83/349/EEC, or Article 31 of Directive 85/611/EEC (1), or
any other statutory task, shall have a duty to report
promptly to the competent authorities any fact or decision
concerning that institution of which he has become aware
while carrying out that task which is liable to:

administrative provisions adopted in accordance with this
Directive may be subject to the right to apply to the courts.
The same shall apply where no decision is taken within six
its submission in respect of an application for
months of
authorisation which contains all
the information required
under the provisions in force.

(cid:151) constitute a material breach of the laws, regulations
or administrative provisions which lay down the
conditions
or which
specifically govern pursuit of the activities of credit
institutions, or

authorisation

governing

CHAPTER 2

(cid:151) affect

the

continuous

functioning of

the

credit

TECHNICAL INSTRUMENTS OF PRUDENTIAL SUPERVISION

institution, or

(cid:151) lead to refusal

to certify the accounts or to the

expression of reservations;

(b) that person shall likewise have a duty to report any fact
and decisions of which he becomes aware in the course of
carrying out a task as described in (a) in an undertaking
having close links resulting from a control relationship
with the credit institution within which he is carrying out
the abovementioned task.

2.
The disclosure in good faith to the competent authorities,
by persons authorised within the meaning of Directive
84/253/EEC, of any fact or decision referred to in paragraph 1
shall not constitute a breach of any restriction on disclosure of
information imposed by contract or by any legislative,
regulatory or administrative provision and shall not involve
such persons in liability of any kind.

Article 32

Power of sanction of the competent authorities

Without prejudice to the procedures for the withdrawal of
authorisations and the provisions of criminal law, the Member
States shall provide that their respective competent authorities
may, as against credit
institutions or those who effectively
control the business of credit institutions which breach laws,
the
administrative provisions
regulations or
supervision or pursuit of their activities, adopt or impose in
respect of them penalties or measures aimed specifically at
ending observed breaches or the causes of such breaches.

concerning

Article 33

Right to apply to the courts

Member States shall ensure that decisions taken in respect of a
regulations and
credit

institution in pursuance of

laws,

(1) Council Directive 85/611/EEC of 20 December 1985 on the
coordination of
laws, regulations and administrative provisions
relating to undertakings for collective investment in transferable
securities (UCITS) (OJ L 375, 31.12.1985, p. 3). Directive as last
amended by Directive 95/26/EC (OJ L 168, 18.7.1995, p. 7).

S e c t i o n 1

Own funds

Article 34

General principles

1. Wherever a Member State lays down by law, regulation
or administrative action a provision in implementation of
Community legislation concerning the prudential supervision
of an operative credit institution which uses the term or refers
to the concept of own funds,
it shall bring this term or
concept into line with the definition given in paragraphs 2, 3
and 4 and Articles 35 to 38.

Subject

to the

2.
the
unconsolidated own funds of credit institutions shall consist of
the following items:

imposed in Article 38,

limits

(1) capital within the meaning of Article 22 of Directive
86/635/EEC, in so far as it has been paid up, plus share
premium accounts but excluding cumulative preferential
shares;

(2) reserves within the meaning of Article 23 of Directive
86/635/EEC and profits and losses brought forward as a
result of the application of the final profit or loss. The
Member States may permit inclusion of interim profits
before a formal decision has been taken only if these
profits have been verified by persons responsible for the
auditing of
is proved to the
satisfaction of the competent authorities that the amount
thereof has been evaluated in accordance with the
principles set out in Directive 86/635/EEC and is net of
any foreseeable charge or dividend;

the accounts and if

it

(3)

funds for general banking risks within the meaning of
Article 38 of Directive 86/635/EEC;

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(4) revaluation reserves within the meaning of Article 33 of

Directive 78/660/EEC;

institutions which are included in the consolidation. This
provision shall apply to all the prudential rules harmonised by
Community acts.

(5) value adjustments within the meaning of Article 37(2) of

Directive 86/635/EEC;

(6) other items within the meaning of Article 35;

(7)

(8)

the commitments of the members of credit institutions
set up as cooperative societies and the joint and several
commitments of
the borrowers of certain institutions
organised as funds, as referred to in Article 36(1);

fixed-term
subordinated loan capital as referred to in Article 36(3).

preferential

cumulative

shares

and

The following items shall be deducted in accordance with
Article 38:

(9) own shares at book value held by a credit institution;

(10)

intangible assets within the meaning of Article 4(9)
((cid:145)Assets(cid:146)) of Directive 86/635/EEC;

(11) material losses of the current financial year;

(12) holdings

credit

in other

to more

and financial

institutions
amounting
capital,
subordinated claims and the instruments referred to in
Article 35 which a credit institution holds in respect of
credit and financial institutions in which it has holdings
exceeding 10 % of the capital in each case.

than 10 % of

their

Where shares in another credit or financial institution are
held temporarily for the purposes of a financial assistance
designed
operation
that
the competent authority may waive this
institution,
provision;

reorganise

save

and

to

(13) holdings in other credit and financial institutions of up to
10 % of their capital, the subordinated claims and the
instruments referred to in Article 35 which a credit
institution holds
in respect of credit and financial
institutions other than those referred to in point (12) in
the total of such holdings,
respect of
subordinated claims and instruments which exceed 10 %
of that credit institution’s own funds calculated before
the deduction of items in point (12) and in this point.

the amount of

subsequent

coordination of

the provisions on
Pending
consolidation, Member States may provide that,
the
calculation of unconsolidated own funds, parent companies
subject to supervision on a consolidated basis need not deduct
financial
credit
their holdings

institutions or

in other

for

those items and the fixing of

The concept of own funds as defined in points (1) to (8)
3.
of paragraph 2 embodies a maximum number of items and
amounts. The use of
lower
ceilings, and the deduction of items other than those listed in
points (9) to (13) of paragraph 2 shall be left to the discretion
the Member States. Member States shall nevertheless be
of
obliged to consider increased convergence with a view to a
common definition of own funds.

To that end, the Commission shall, by 1 January 1996 at the
latest, submit a report to the European Parliament and to the
Council on the application of this Article and Articles 35 to
39, accompanied, where appropriate, by such proposals for
later than 1
amendment as it shall deem necessary. Not
January 1998, the European Parliament and the Council shall,
acting in accordance with the procedure laid down in Article
251 of the Treaty and after consultation of the Economic and
Social Committee, examine the definition of own funds with a
view to the uniform application of the common definition.

The items listed in points (1) to (5) of paragraph 2 must
4.
institution for unrestricted and
be available to a credit
immediate use to cover risks or losses as soon as these occur.
The amount must be net of any foreseeable tax charge at the
moment of its calculation or be suitably adjusted in so far as
such tax charges reduce the amount up to which these items
may be applied to cover risks or losses.

Article 35

Other items

1.
The concept of own funds used by a Member State may
include other items provided that, whatever their legal or
accounting designations might be,
they have the following
characteristics:

(a)

they are freely available to the credit institution to cover
normal banking risks where revenue or capital losses have
not yet been identified;

(b) their existence is disclosed in internal accounting records;

(c)

their amount is determined by the management of the
credit institution, verified by independent auditors, made
known to the competent authorities and placed under the
supervision of the latter.

Securities

2.
other
instruments that fulfil the following conditions may also be
accepted as other items:

indeterminate

duration

and

of

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(a)

they may not be reimbursed on the bearer’s initiative or
without the prior agreement of the competent authority;

Subordinated loan capital must also fulfil the following criteria:

(b) the debt agreement must provide for the credit institution
to have the option of deferring the payment of interest on
the debt;

(c)

the lender’s claims on the credit institution must be wholly
subordinated to those of all non-subordinated creditors;

(d) the documents governing the issue of the securities must
to be such as to
institution in a

provide for debt and unpaid interest
absorb losses, whilst
position to continue trading;

leaving the credit

(e) only fully paid-up amounts shall be taken into account.

To these may be added cumulative preferential shares other
than those referred to in point 8 of Article 34(2).

Article 36

Other provisions concerning own funds

The commitments of the members of credit institutions
1.
set up as cooperative societies referred to in point 7 of Article
34(2), shall comprise those societies’ uncalled capital; together
with the legal commitments of
those
additional non-refundable
societies
cooperative
payments should the credit institution incur a loss, in which
case it must be possible to demand those payments without
delay.

the members of

to make

The joint and several commitments of borrowers in the case of
credit institutions organised as funds shall be treated in the
same way as the preceding items.

All such items may be included in own funds in so far as they
are counted as the own funds of institutions of this category
under national law.

2. Member States shall not include in the own funds of
public credit institutions guarantees which they or their local
authorities extend to such entities.

3. Member States or the competent authorities may include
fixed-term cumulative preferential shares referred to in point
(8) of Article 34(2) and subordinated loan capital referred to in
that provision in own funds, if binding agreements exist under
in the event of the bankruptcy or liquidation of the
which,
they rank after the claims of all other
credit
institution,
creditors and are not
to be repaid until all other debts
outstanding at the time have been settled.

(a) only fully paid-up funds may be taken into account;

(b) the loans involved must have an original maturity of at
least five years, after which they may be repaid;
if the
maturity of the debt is not fixed, they shall be repayable
only subject to five years’ notice unless the loans are no
longer considered as own funds or unless the prior consent
of
the competent authorities is specifically required for
early repayment. The competent authorities may grant
permission for the early repayment of such loans provided
the request is made at the initiative of the issuer and the
solvency of
institution in question is not
affected;

the credit

(c)

the extent to which they may rank as own funds must be
gradually reduced during at least the last five years before
the repayment date;

(d) the loan agreement must not include any clause providing
that in specified circumstances, other than the winding-up
of the credit institution, the debt will become repayable
before the agreed repayment date.

Article 37

Calculation of own funds on a consolidated basis

1. Where the calculation is to be made on a consolidated
basis, the consolidated amounts relating to the items listed
under Article 34(2) shall be used in accordance with the rules
laid down in Articles 52 to 56. Moreover, the following may,
when they are credit
items, be regarded as
((cid:145)negative(cid:146))
consolidated reserves for the calculation of own funds:

(cid:151) any minority interests within the meaning of Article 21 of
integration

global

the

Directive 83/349/EEC, where
method is used,

(cid:151) the first consolidation difference within the meaning of

Articles 19, 30 and 31 of Directive 83/349/EEC,

(cid:151) the translation differences included in consolidated reserves

in accordance with Article 39(6) of Directive 86/635/EEC,

(cid:151) any difference resulting from the inclusion of certain
in accordance with the method

participating interests
prescribed in Article 33 of Directive 83/349/EEC.

2. Where the above are debit ((cid:145)positive(cid:146)) items, they must be
deducted in the calculation of consolidated own funds.

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Article 38

Deductions and limits

The solvency ratios of credit

3.
institutions which are
parent undertakings shall be calculated on a consolidated basis
in accordance with the methods laid down in this Directive
and in Directive 86/635/EEC.

The items referred to in points (4) to (8) of Article 34(2),

1.
shall be subject to the following limits:

(a)

the total of the items in points (4) to (8) may not exceed a
maximum of 100 % of the items in points (1) plus (2) and
(3) minus (9), (10) and (11);

(b) the total of the items in points (7) and (8) may not exceed
a maximum of 50 % of the items in points (1) plus (2) and
(3) minus (9), (10) and (11);

(c)

the total of the items in points (12) and (13) shall be
deducted from the total of the items.

The

competent

2.
credit
institutions to exceed the limit laid down in paragraph 1 in
temporary and exceptional circumstances.

authorities may

authorise

also

4.
The competent authorities responsible for authorising
and supervising a parent undertaking which is a credit
institution may
a
require
subconsolidated or unconsolidated ratio in respect of
that
parent undertaking and of any of its subsidiaries which are
subject to authorisation and supervision by them. Where such
monitoring of the satisfactory allocation of capital within a
banking group is not carried out, other measures must be
taken to attain that end.

calculation

the

of

5. Without prejudice to credit institutions’ compliance with
the requirements of paragraphs 2, 3 and 4, and of Article
52(8) and (9), the competent authorities shall ensure that ratios
are calculated not less than twice each year, either by credit
institutions themselves, which shall communicate the results
and
competent
authorities, or by the competent authorities, using data
supplied by the credit institutions.

component

required

to the

data

any

The valuation of assets and off-balance-sheet items shall

6.
be effected in accordance with Directive 86/635/EEC.

Article 39

Article 41

Provision of proof to the competent authorities

The numerator: own funds

Compliance with the conditions laid down in Article 34(2), (3)
and (4) and Articles 35 to 38 must be proved to the
satisfaction of the competent authorities.

Own funds as defined in this Directive shall
numerator of the solvency ratio.

form the

S e c t i o n 2

Solvency ratio

Article 40

General principles

Article 42

The denominator: risk-adjusted assets and
off-balance-sheet items

of

credit

Degrees

1.
percentage
risk,
weightings, shall be assigned to asset items in accordance with
Articles 43 and 44, and exceptionally Articles 45, 62 and 63.
The balance-sheet value of each asset shall then be multiplied
by the relevant weighting to produce a risk-adjusted value.

expressed

as

1.
The solvency ratio expresses own funds, as defined in
Article 41, as a proportion of total assets and off-balance-sheet
items, risk-adjusted in accordance with Article 42.

The solvency ratios of credit

2.
institutions which are
neither parent undertakings as defined in Article 1 of Directive
83/349/EEC, nor subsidiaries of such undertakings shall be
calculated on an individual basis.

In the case of the off-balance-sheet items listed in Annex
2.
II, a two-stage calculation as prescribed in Article 43(2) shall
be used.

In the case of the off-balance-sheet items referred to in
3.
Article 43(3), the potential costs of replacing contracts in the
event of counterparty default shall be calculated by means of
one of the two methods set out in Annex III. Those costs shall
be multiplied by the relevant counterparty weightings
in
Article 43(1), except the 100 % weightings as provided for

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there shall be replaced by 50 % weightings
risk-adjusted values.

to produce

(3) asset items constituting claims carrying the explicit

guarantee of the EIB;

4.
The total of the risk-adjusted values of the assets and
off-balance-sheet items mentioned in paragraphs 2 and 3 shall
be the denominator of the solvency ratio.

(4) asset items constituting claims carrying the explicit

guarantees of multilateral development banks;

Article 43

Risk weightings

1.
The following weightings shall be applied to the various
categories of asset items, although the competent authorities
may fix higher weightings as they see fit:

(a) Zero weighting

(1)

cash in hand and equivalent items;

(2) asset

items constituting claims on Zone A central

governments and central banks;

(3) asset

items constituting claims on the European

Communities;

(4) asset items constituting claims carrying the explicit
guarantees of Zone A central governments and central
banks or of the European Communities;

(5) asset

items constituting claims on Zone B central
governments and central banks denominated and
funded in the national currencies of the borrowers;

(5) asset items constituting claims on Zone A regional
to

authorities,

subject

local

or

governments
Article 44;

(6) asset items constituting claims carrying the explicit
guarantees of Zone A regional governments or local
authorities, subject to Article 44;

(7) asset

items constituting claims on Zone A credit
institutions but not constituting such institutions’
own funds;

(8) asset items constituting claims with a maturity of
one year or less, on Zone B credit institutions, other
than securities issued by such institutions which are
recognised as components of their own funds;

(9) asset items carrying the explicit guarantees of Zone

A credit institutions;

(10) asset items constituting claims with a maturity of
one year or less carrying the explicit guarantees of
Zone B credit institutions;

(11) asset

items

to the

secured,
competent authorities, by collateral
securities
development banks;

the
in the form of
issued by the EIB or by multilateral

satisfaction of

(6) asset items constituting claims carrying the explicit
guarantees of Zone B central governments and central
banks denominated and funded in the national
currency common to the guarantor and the borrower;

(c) 50 % weighting

(12) cash items in the process of collection;

(7) asset

items

satisfaction of

secured to the

the
competent authorities, by collateral
in the form of
Zone A central government or central bank securities
or securities issued by the European Communities or
by cash deposits placed with the lending institution or
by certificates of deposit or similar instruments issued
by and lodged with the latter;

(b) 20 % weighting

(1) asset items constituting claims on the EIB;

(2) asset

items
development banks;

constituting

claims on multilateral

the

competent

(1) loans fully and completely secured, to the satisfaction
of
authorities, by mortgages on
residential property which is or will be occupied or let
fully and completely
by the borrower, and loans
secured,
competent
satisfaction
the
authorities, by shares in Finnish residential housing
companies, operating in accordance with the Finnish
subsequent
Housing Company Act of 1991 or
equivalent legislation, in respect of residential property
which is or will be occupied or let by the borrower;

the

to

of

if

(cid:145)mortgage-backed securities(cid:146) which may be treated as
loans referred to in the first subparagraph or in Article
62(1),
the competent authorities consider, having
regard to the legal framework in force in each Member
State, that they are equivalent in the light of the credit
risk. Without prejudice to the types of securities which

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may be included in and are capable of fulfilling the
conditions in this point 1, (cid:145)mortgage-backed securities(cid:146)
instruments within the meaning of
may include
the Annex to Council
Section B(1)(a) and (b) of
Directive 93/22/EEC (1). The
competent authorities
must in particular be satisfied that:

(6) holdings of shares, participation and other components
of the own funds of other credit institutions which are
not deducted from the own funds of
the lending
institutions;

(7) all other assets except where deducted from own

funds.

(i)

such securities are fully and directly backed by a
pool of mortgages which are of the same nature as
those defined in the first subparagraph or in Article
62(1)
the
mortgage-backed securities are created;

performing when

fully

and

are

(ii) an

charge

acceptable

high-priority

the
on
underlying mortgage-asset
is held either
directly by investors in mortgage-backed securities
or on their behalf by a trustee or mandated
representative in the same proportion to the
securities which they hold;

items

to the weighting

(2) prepayments and accrued income: these assets shall be
corresponding
to the
subject
counterparty where a credit
institution is able to
determine it in accordance with Directive 86/635/EEC.
the
Otherwise, where
counterparty,
it shall apply a flat-rate weighting of
50 %;

to determine

is unable

it

the medium/low-risk items, while the value of

2.
The following treatment shall apply to off-balance-sheet
items other than those covered in paragraph 3. They shall first
be grouped according to the risk groupings set out in Annex
II. The full value of the full-risk items shall be taken into
account, 50 % of the value of the medium-risk items and 20 %
of
low-risk
items shall be set at zero. The second stage shall be to multiply
the off-balance-sheet values, adjusted as described above, by
the weightings attributable to the relevant counterparties in
accordance with the treatment of asset items prescribed in
In the case of asset sale and
paragraph 1 and Article 44.
repurchase agreements and outright
the
weightings shall be those attaching to the assets in question
and not to the counterparties to the transactions. The portion
of unpaid capital subscribed to the European Investment Fund
may be weighted at 20 %.

forward purchases,

The methods set out in Annex III shall be applied to the

3.
off-balance-sheet items listed in Annex IV except for:

(d) 100 % weighting

(cid:151) contracts traded on recognised exchanges,

(1) asset

items constituting claims on Zone B central
governments
except where
denominated and funded in the national currency of
the borrower;

central

banks

and

(2) asset

items constituting claims on Zone B regional

governments or local authorities;

(3) asset items constituting claims with a maturity of more

than one year on Zone B credit institutions;

(4) asset

items constituting claims on the Zone A and

Zone B non-bank sectors;

(cid:151) foreign-exchange contracts (except contracts concerning
gold) with an original maturity of 14 calendar days or less.

the competent authorities of
Until 31 December 2006,
Member States may exempt
the
from the application of
methods set out in Annex III over-the-counter (OTC) contracts
cleared by a clearing house where the latter acts as the legal
counterparty and all participants fully collateralise on a daily
basis the exposure they present to the clearing house, thereby
providing a protection covering both the current exposure and
the potential future exposure. The competent authorities must
be satisfied that the posted collateral gives the same level of
protection as collateral which complies with paragraph 1(a)(7)
the clearing house’s
and that
exposures beyond the market value of posted collateral
is
eliminated. Member States shall inform the Commission of the
use they make of this option.

the risk of a build-up of

(5) tangible (cid:145)Assets(cid:146) within the meaning of Article 4(10) of

Directive 86/635/EEC;

(1) Council Directive 93/22/EEC of 10 May 1993 on investment
services in the securities field (OJ L 141, 11.6.1993, p. 27).
Directive as
last amended by Directive 97/9/EC (OJ L 84,
26.3.1997, p. 22).

4. Where off-balance-sheet items carry explicit guarantees,
they shall be weighted as if they had been incurred on behalf
the guarantor rather than the counterparty. Where the
of
potential exposure arising from off-balance-sheet transactions
is fully and completely secured,
the
competent authorities, by any of the asset items recognised as
collateral in paragraph 1(a)(7) and (b)(11), weightings of 0 % or
20 % shall apply depending on the collateral in question.

to the satisfaction of

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apply

States may

a 50 % weighting

The Member
to
off-balance-sheet items which are sureties or guarantees having
the character of credit
substitutes and which are fully
guaranteed, to the satisfaction of the competent authorities, by
mortgages meeting the conditions set out in paragraph 1(c)(1),
to such
subject
collateral.

to the guarantor having a direct

right

items are given a
5. Where asset and off-balance-sheet
lower weighting because of the existence of explicit guarantees
or collateral acceptable to the competent authorities, the lower
weighting shall apply only to that part which is guaranteed or
which is fully covered by the collateral.

Article 44

Weighting of claims for regional governments or local
authorities of the Member States

1.
Notwithstanding the requirements of Article 43(1)(b), the
Member States may fix a weighting of 0 % for their own
regional governments and local authorities if
there is no
difference in risk between claims on the latter and claims on
their central governments because of
the revenue-raising
powers of the regional governments and local authorities and
the existence of specific institutional arrangements the effect of
which is to reduce the chances of default by the latter. A
zero-weighting fixed in accordance with these criteria shall
apply to claims on and off-balance-sheet items incurred on
behalf of the regional governments and local authorities in
question and claims on others and off-balance-sheet
items
incurred on behalf of others and guaranteed by those regional
to the
governments
satisfaction of
concerned, by
collateral
in the form of securities issued by those regional
governments or local authorities.

authorities or

and local

competent

authorities

secured,

the

2.
The Member States shall notify the Commission if they
believe a zero-weighting to be justified according to the criteria
laid down in paragraph 1. The Commission shall circulate that
the credit
information. Other Member States may offer
institutions
competent
their
authorities the possibility of applying a zero-weighting where
they undertake business with the regional governments or
in question or where they hold claims
local authorities
guaranteed by the latter,
in the form of
securities.

including collateral

supervision of

under

the

to the satisfaction of

secured,
the competent authorities
in the form of securities issued by
concerned, by collateral
Zone A regional governments or local authorities, by deposits
placed with Zone A credit institutions other than the lending
institution, or by certificates of deposit or similar instruments
issued by such credit institutions.

The Member States may apply a weighting of 10 % to
2.
specialising in the inter-bank and
claims on institutions
public-debt markets in their home Member States and subject
to close supervision by the competent authorities where those
asset items are fully and completely secured, to the satisfaction
of the competent authorities of the home Member States, by a
combination of asset items mentioned in Article 43(1)(a) and
(b) recognised by the latter as constituting adequate collateral.

The Member States shall notify the Commission of any
3.
provisions adopted pursuant to paragraphs 1 and 2 and of the
grounds for such provisions. The Commission shall forward
that information to the Member States. The Commission shall
periodically examine the implications of those provisions in
order to ensure that they do not result in any distortions of
competition.

Article 46

Administrative bodies and non-commercial undertakings

authorities

For the purposes of Article 43 (1)(b), the competent authorities
may include within the concept of regional governments and
local
bodies
responsible to regional governments or local authorities or
in the view of the competent authorities,
authorities which,
exercise
and local
authorities.

non-commercial

responsibilities

administrative

regional

same

the

as

The competent authorities may also include within the concept
of regional governments and local authorities, churches and
religious communities constituted in the form of a legal person
under public law, in so far as they raise taxes in accordance
with legislation conferring on them the right
to do so.
However, in this case the option set out in Article 44 shall not
apply.

Article 45

Other weighting

Article 47

Solvency ratio level

1. Without prejudice to Article 44(1) the Member States
items which are
may apply a weighting of 20 % to asset

Credit

institutions

1.
shall be required permanently to
maintain the ratio defined in Article 40 at a level of at least
8 %.

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Notwithstanding paragraph 1, the competent authorities
they consider

2.
may prescribe higher minimum ratios as
appropriate.

event giving rise to the dispensation, so that the competent
authorities may establish whether it is justified.

If the ratio falls below 8 % the competent authorities shall
3.
ensure that the credit institution in question takes appropriate
measures to restore the ratio to the agreed minimum as
quickly as possible.

Article 49

Limits on large exposures

S e c t i o n 3

Large exposures

Article 48

Reporting of large exposures

1.
A credit institution’s exposure to a client or group of
connected clients shall be considered a large exposure where
its value is equal to or exceeds 10 % of its own funds.

A credit

2.
institution shall report every large exposure
within the meaning of paragraph 1 to the competent
authorities. Member States shall provide that reporting is to be
carried out, at their discretion, in accordance with one of the
following two methods:

(cid:151) reporting of all

large exposures at

least once a year,
combined with reporting during the year of all new large
exposures and any increases in existing large exposures of
at least 20 % with respect to the previous communication,

(cid:151) reporting of all large exposures at least four times a year.

3.
Exposures exempted under Article 49(7)(a), (b), (c), (d),
(f), (g) and (h) need not, however, be reported as laid down in
paragraph 2. The reporting frequency laid down in the second
indent to paragraph 2 may be reduced to twice a year for the
exposures referred to in Article 49(7)(e) and (i), and also in
paragraphs 8, 9 and 10.

have

sound

administrative

4.
The competent authorities shall require that every credit
accounting
institution
procedures and adequate internal control mechanisms for the
purpose of identifying and recording all
large exposures and
subsequent changes to them, as defined and required by this
Directive, and for that of monitoring those exposures in the
light of each credit institution’s own exposure policies.

and

1.
A credit institution may not incur an exposure to a client
or group of connected clients the value of which exceed 25 %
of its own funds.

the credit

2. Where that client or group of connected clients is the
parent undertaking or
institution
subsidiary of
and/or one or more subsidiaries of that parent undertaking,
the percentage laid down in paragraph 1 shall be reduced to
20 %. Member States may, however, exempt
the exposures
incurred to such clients from the 20 % limit if they provide for
specific monitoring of such exposures by other measures or
procedures. They shall
inform the Commission and the
Banking Advisory Committee of the content of such measures
or procedures.

A credit institution may not incur large exposures which

3.
in total exceed 800 % of its own funds.

4. Member States may impose limits more stringent than
those laid down in paragraphs 1, 2 and 3.

5.
A credit institution shall at all times comply with the
limits laid down in paragraphs 1, 2 and 3 in respect of its
If in an exceptional case exposures exceed those
exposures.
limits,
fact must be reported without delay to the
competent authorities which may, where the circumstances
warrant it, allow the credit institution a limited period of time
in which to comply with the limits.

that

institution to its parent undertaking,

6. Member States may fully or partially exempt from the
application of paragraphs 1, 2 and 3 exposures incurred by a
to other
credit
subsidiaries of
to its own
that parent undertaking or
subsidiaries, in so far as those undertakings are covered by the
supervision on a consolidated basis
to which the credit
institution itself is subject, in accordance with this Directive or
with equivalent standards in force in a third country.

7. Member States may fully or partially exempt
the
following exposures from the application of paragraphs 1, 2
and 3:

(a) asset

items

constituting claims on Zone A central

governments or central banks;

Where a credit institution invokes paragraph 3, it shall keep a
record of the grounds advanced for at least one year after the

(b) asset

items
Communities;

constituting

claims

on

the

European

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(c) asset

items

constituting claims

explicit
guarantees of Zone A central governments or central
banks or of the European Communities;

carrying the

(d) other exposures attributable to, or guaranteed by, Zone A
central governments or central banks or the European
Communities;

(e) asset items constituting claims on and other exposures to
Zone B central governments or central banks which are
denominated and, where applicable, funded in the national
currencies of the borrowers;

(f)

asset items and other exposures secured, to the satisfaction
of the competent authorities, by collateral in the form of
Zone A central government or central bank securities, or
securities issued by the European Communities or by
Member State regional or
local authorities for which
Article 44 lays down a zero weighting for solvency
purposes;

(g) asset items and other exposures secured, to the satisfaction
of the competent authorities, by collateral in the form of
cash deposits placed with the lending institution or with a
credit institution which is the parent undertaking or a
subsidiary of the lending institution;

(h) asset items and other exposures secured, to the satisfaction
of the competent authorities, by collateral in the form of
certificates of deposit issued by the lending institution or
by a credit institution which is the parent undertaking or
a subsidiary of the lending institution and lodged with
either of them;

(i)

(j)

asset items constituting claims on and other exposures to
credit institutions, with a maturity of one year or less, but
not constituting such institutions’ own funds;

asset items constituting claims on and other exposures to
those institutions which are not credit
institutions but
which fulfil the conditions referred to in Article 45(2),
with a maturity of one year or less, and secured in
accordance with the same paragraph;

40 % of the own funds of the credit institution acquiring
such a holding;

(n) asset

items constituting claims on regional or central
credit institutions with which the lending institution is
associated in a network in accordance with legal or
statutory provisions and which are responsible, under
those provisions, for cash-clearing operations within the
network;

(o) exposures secured, to the satisfaction of the competent
in the form of securities other
authorities, by collateral
than those referred to in (f) provided that those securities
are not issued by the credit institution itself,
its parent
company or one of their subsidiaries, or by the client or
group of connected clients in question. The securities used
as collateral must be valued at market price, have a value
that exceeds
the exposures guaranteed and be either
traded on a stock exchange or effectively negotiable and
regularly quoted on a market operated under the auspices
of recognised professional operators and allowing, to the
satisfaction of the competent authorities of the Member
State of origin of
the
establishment of an objective price such that the excess
value of the securities may be verified at any time. The
excess value required shall be 100 % it shall, however, be
150 % in the case of shares and 50 % in the case of debt
securities
institutions, Member State
regional or local authorities other than those referred to in
Article 44, and in the case of debt securities issued by the
EIB and multilateral development banks. Securities used as
collateral may not constitute credit institutions’ own funds;

issued by credit

institution,

credit

the

for

(p)

secured,

the competent
to the satisfaction of
loans
authorities, by mortgages on residential property or by
shares in Finnish residential housing companies, operating
in accordance with the Finnish Housing Company Act of
1991 or subsequent equivalent
legislation and leasing
transactions under which the lessor retains full ownership
of the residential property leased for as long as the lessee
has not exercised his option to purchase, in all cases up to
50 % of the value of the residential property concerned.
to the
The value of
satisfaction of the competent authorities, on the basis of
strict valuation standards laid down by law, regulation or
administrative provisions. Valuation shall be carried out at
least once a year. For the purposes of this point residential
property shall mean a residence to be occupied or let by
the borrower;

the property shall be calculated,

(k) bills of trade and other similar bills, with a maturity of
one year or less, bearing the signatures of other credit
institutions;

(q) 50 % of

the medium/low-risk off-balance-sheet

items

referred to in Annex II;

(l)

debt securities as defined in Article 22(4) of Directive
85/611/EEC;

(r)

(m) pending

the
insurance companies referred to in Article 51(3) up to

coordination,

subsequent

holdings

in

to

the

competent

authorities’

agreement,
subject
guarantees other than loan guarantees which have a legal
or regulatory basis and are given for their members by
mutual guarantee schemes possessing the status of credit
institutions,
their
amount.

to a weighting of 20 % of

subject

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Member States shall
inform the Commission of the use
they make of this option in order to ensure that it does
not result in distortions of competition;

treatment of interbank exposures provided for in paragraphs
7(i), 9 and 10. The Council shall decide on any changes to be
made on a proposal from the Commission.

(s)

the low-risk off-balance-sheet items referred to in Annex
II, to the extent that an agreement has been concluded
with the client or group of connected clients under which
the exposure may be incurred only if
it has been
ascertained that
it will not cause the limits applicable
under paragraphs 1, 2 and 3 to be exceeded.

Article 50

Supervision on a consolidated or unconsolidated basis of
large exposures

8.
For the purposes of paragraphs 1, 2 and 3, Member
items
States may apply a weighting of 20 % to asset
constituting claims on Member State regional and local
authorities and to other exposures to or guaranteed by such
authorities; subject to the conditions laid down in Article 44,
however, Member States may reduce that rate to 0 %.

exposures

claims on and other

9.
For the purposes of paragraphs 1, 2 and 3, Member
States may apply a weighting of 20 % to asset
items
to credit
constituting
institutions with a maturity of more than one but not more
than three years and a weighting of 50 % to asset
items
constituting claims on credit institutions with a maturity of
more than three years, provided that the latter are represented
by debt instruments that were issued by a credit institution
and that those debt instruments are,
in the opinion of the
competent authorities, effectively negotiable on a market made
up of professional operators and are subject to daily quotation
on that market, or the issue of which was authorised by the
competent authorities of the Member State of origin of the
issuing credit institutions. In no case may any of these items
constitute own funds.

10.
By way of derogation from paragraphs 7(i) and 9,
Member States may apply a weighting of 20 % to asset items
constituting
to credit
claims on and other
institutions, regardless of their maturity.

exposures

1.
If the credit institution is neither a parent undertaking
nor a subsidiary, compliance with the obligations imposed in
Articles 48 and 49 or in any other Community provision
applicable
an
shall
this
unconsolidated basis.

be monitored

area

on

to

2.
In the other cases, compliance with the obligations
imposed in Articles 48 and 49 or in any other Community
provision applicable to this area shall be monitored on a
consolidated basis in accordance with Articles 52 to 56.

3. Member States may waive monitoring on an individual
or subconsolidated basis of compliance with the obligations
imposed in Articles 48 and 49 or in any other Community
provision applicable to this area by a credit institution which,
as a parent undertaking,
to monitoring on a
consolidated basis and by any subsidiary of such a credit
to their authoritisation and
institution which is
supervision and is covered by monitoring on a consolidated
basis.

subject

subject

is

Member States also waive such monitoring where the parent
undertaking is a financial holding company established in the
institution, provided that
same Member State as the credit
company is
credit
subject
institutions.

same monitoring as

to the

11. Where an exposure to a client is guaranteed by a third
in the form of securities issued by a
party, or by collateral
third party under the conditions laid down in paragraph 7(o),
Member States may:

In the cases referred to in the first and second subparagraphs
measures must be taken to ensure the satisfactory allocation of
risks within the group.

(cid:151) treat the exposure as having been incurred to the third
party rather than to the client, if the exposure is directly
and unconditionally guaranteed by that third party, to the
satisfaction of the competent authorities,

S e c t i o n 4

Qualifying holdings outside the financial sector

(cid:151) treat the exposure as having been incurred to the third
party rather than to the client, if the exposure defined in
the
paragraph 7(o)
conditions there laid down.

is guaranteed by collateral under

Article 51

Limits to non-financial qualifying holdings

12.
the basis of a report

By 1 January 1999 at the latest, the Council shall, on
from the Commission, examine the

1.
amount of which exceeds 15 % of

No credit institution may have a qualifying holding the
its own funds in an

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undertaking which is neither a credit
institution, nor a
financial institution, nor an undertaking carrying on an activity
referred to in the second subparagraph of Article 43(2)(f) of
Directive 86/635/EEC.

CHAPTER 3

SUPERVISION ON A CONSOLIDATED BASIS

institution’s qualifying
The total amount of a credit
2.
institutions,
in undertakings other
holdings
financial
institutions or undertakings carrying on activities
referred to in the second subparagraph of Article 43(2)(f) of
Directive 86/635/EEC may not exceed 60 % of its own funds.

than credit

Article 52

Supervision on a consolidated basis of credit institutions

3.
The Member States need not apply the limits laid down
in paragraphs 1 and 2 to holdings in insurance companies as
Directive
defined
79/267/EEC (2).

73/239/EEC (1),

Directive

and

in

a

institution as

subsidiary or which holds

1.
Every credit institution which has a credit institution or a
a
financial
participation in such institutions shall be subject, to the extent
and in the manner prescribed in Article 54, to supervision on
the basis of
Such
supervision shall be exercised at least in the areas referred to in
paragraphs 5 and 6.

consolidated financial

situation.

its

Shares held temporarily during a financial reconstruction
4.
or
course of
rescue operation or during the normal
underwriting or in an institution’s own name on behalf of
others shall not be counted as qualifying holdings for the
purpose of calculating the limits laid down in paragraphs 1
and 2. Shares which are not financial fixed assets as defined in
Article 35(2) of Directive 86/635/EEC shall not be included.

Every credit institution the parent undertaking of which
2.
is a financial holding company shall be subject, to the extent
and in the manner prescribed in Article 54, to supervision on
the basis of the consolidated financial situation of that financial
holding company. Such supervision shall be exercised at least
referred to in paragraphs 5 and 6. The
in the areas
consolidation of the financial situation of the financial holding
company shall not
the competent
authorities are required to play a supervisory role in relation to
the financial holding company standing alone.

in any way imply that

The limits laid down in paragraphs 1 and 2 may be
5.
In such cases,
exceeded only in exceptional circumstances.
however,
require a credit
the competent authorities
institution either to increase its own funds or to take other
equivalent measures.

shall

The Member States may provide that

the competent
6.
authorities shall not apply the limits laid down in paragraphs 1
and 2 if they provide that 100 % of the amounts by which a
credit institution’s qualifying holdings exceed those limits must
be covered by own funds and that the latter shall not be
included in the calculation of the solvency ratio. If both the
limits laid down in paragraphs 1 and 2 are exceeded, the
amount to be covered by own funds shall be the greater of the
excess amounts.

(1) First Council Directive 73/239/EEC of 24 July 1973 on the
laws, regulations and administrative provisions
coordination of
relating to the taking-up and pursuit of
the business of direct
insurance other than life assurance (OJ L 228, 16.8.1973, p. 3).
Directive as last amended by Directive 95/26/EC.

(2) First Council Directive 79/267/EEC of 5 March 1979 on the
coordination of
laws, regulations and administrative provisions
relating to the taking-up and pursuit of the business of direct life
assurance (OJ L 63, 13.3.1979, p. 1). Directive as last amended by
Directive 95/26/EC.

the

States or

competent

The Member

3.
authorities
responsible for exercising supervision on a consolidated basis
pursuant to Article 53 may decide in the cases listed below
that a credit
institution or auxiliary
financial
banking services undertaking which is a subsidiary or in which
a participation is held need not be
included in the
consolidation:

institution,

(cid:151) if the undertaking that should be included is situated in a
impediments to the

third country where there are legal
transfer of the necessary information,

(cid:151) if,

in the opinion of

the
the competent authorities,
should be included is of negligible
undertaking that
interest only with respect to the objectives of monitoring
credit institutions and in all cases if the balance-sheet total
of the undertaking that should be included is less than the
smaller of the following two amounts: EUR 10 million or
1 % of the balance-sheet total of the parent undertaking or
If several
the undertaking that holds the participation.
undertakings meet
they must
the
nevertheless be included in the consolidation where
collectively they are of non-negligible interest with respect
to the aforementioned objectives, or

criteria,

above

(cid:151) if, in the opinion of the competent authorities responsible
the
for exercising supervision on a consolidated basis,

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consolidation of the financial situation of the undertaking
should be included would be inappropriate or
that
misleading as far as the objectives of the supervision of
credit institutions are concerned.

8. Where a credit institution the parent of which is a credit
institution has been authorised and is situated in another
Member State, the competent authorities which granted that
authorisation shall apply the rules laid down in paragraph 5 to
that
institution on an individual or, when appropriate, a
subconsolidated basis.

4. When the competent authorities of a Member State do
not include a credit institution subsidiary in supervision on a
consolidated basis under one of the cases provided for in the
second and third indents of paragraph 3,
the competent
authorities of the Member State in which that credit institution
subsidiary is situated may ask the parent undertaking for
information which may facilitate their supervision of
that
credit institution.

5.
Supervision of solvency, and of the adequacy of own
funds to cover market risks and control of large exposures
shall be exercised on a consolidated basis in accordance with
this Article and Articles 53 to 56. Member States shall adopt
to include
any measures necessary, where
financial holding companies in consolidated supervision,
in
accordance with paragraph 2.

appropriate,

Compliance with the limits set in Article 51(1) and (2) shall be
supervised and controlled on the basis of the consolidated or
subconsolidated financial situation of the credit institution.

The competent authorities shall ensure that,

6.
in all the
undertakings included in the scope of the supervision on a
consolidated basis that is exercised over a credit institution in
implementation of paragraphs 1 and 2, there are adequate
internal control mechanisms for the production of any data
and information which would be relevant for the purposes of
supervision on a consolidated basis.

as

credit

institution that,

7. Without prejudice to specific provisions contained in
other directives, Member States may waive application, on an
individual or subconsolidated basis, of the rules laid down in
paragraph 5 to a
a parent
undertaking, is subject to supervision on a consolidated basis,
and to any subsidiary of such a credit institution which is
subject to their authorisation and supervision and is included
the credit
in the supervision on a consolidated basis of
institution which is the parent company. The same exemption
option shall be allowed where the parent undertaking is a
financial holding company which has its head office in the
same Member State as the credit institution, provided that it is
subject to the same supervision as that exercised over credit
institutions, and in particular the standards laid down in
paragraph 5.

In both cases set out in the first subparagraph, steps must be
taken to ensure that capital is distributed adequately within the
banking group.

If the competent authorities apply those rules individually to
such credit
the purpose of
calculating own funds, make use of the provision in the last
subparagraph of Article 3(2).

institutions,

they may,

for

for

authorities

authorising

Notwithstanding the requirements of paragraph 8, the
9.
the
responsible
competent
subsidiary of a parent undertaking which is a credit institution
may, by bilateral agreement, delegate their responsibility for
supervision to the competent authorities which authorised and
supervise
they assume
responsibility for supervising the subsidiary in accordance with
this Directive. The Commission must be kept informed of the
existence and content of such agreements.
forward
such information to the competent authorities of the other
Member States and to the Banking Advisory Committee.

the parent undertaking so that

It shall

for

exercising

shall provide that

their competent
10. Member States
authorities
supervision on a
responsible
consolidated basis may ask the subsidiaries of a credit
institution or a financial holding company which are not
included within the scope of supervision on a consolidated
basis for the information referred to in Article 55. In such a
transmitting and verifying the
case,
information laid down in that Article shall apply.

the procedures

for

Article 53

Competent authorities responsible for exercising
supervision on a consolidated basis

1. Where a parent undertaking is a credit
institution,
supervision on a consolidated basis shall be exercised by the
competent authorities that authorised it under Article 4.

2. Where the parent of a credit institution is a financial
holding company, supervision on a consolidated basis shall be
exercised by the competent authorities which authorised that
credit institution under Article 4.

However, where credit institutions authorised in two or more
Member States have as their parent the same financial holding
company,
shall be
exercised by the competent authorities of the credit institution
authorised in the Member State in which the financial holding
company was set up.

supervision on a

consolidated basis

If no credit institution subsidiary has been authorised in the
Member State in which the financial holding company was set
up, the competent authorities of the Member States concerned
(including those of the Member State in which the financial
holding company was set up) shall seek to reach agreement as

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them will
In the

exercise
absence of

to who amongst
supervision on a
such agreement,
consolidated basis.
supervision on a consolidated basis shall be exercised by the
competent authorities that authorised the credit
institution
with the greatest balance-sheet total; if that figure is the same,
supervision on a consolidated basis shall be exercised by the
competent authorities which first gave the authorisation
referred to in Article 4.

The competent authorities concerned may by common
3.
agreement waive the rules laid down in the first and second
subparagraph of paragraph 2.

4.
The agreements referred to in the third subparagraph of
paragraph 2 and in paragraph 3 shall provide for procedures
for cooperation and for the transmission of information such
that the objectives of supervision on a consolidated basis can
be attained.

5. Where Member States have more than one competent
authority for the prudential supervision of credit institutions
and financial
the
institutions, Member States
requisite measures to organise coordination between such
authorities.

shall

take

Article 54

Form and extent of consolidation

The competent authorities

1.
responsible for exercising
supervision on a consolidated basis must, for the purposes of
supervision,
credit
institutions and financial institutions which are subsidiaries of
a parent undertaking.

consolidation of

require

full

the

all

However, proportional consolidation may be prescribed where,
in the opinion of the competent authorities, the liability of a
parent undertaking holding a share of the capital is limited to
that share of the capital because of the liability of the other
shareholders or members whose solvency is satisfactory. The
liability of the other shareholders and members must be clearly
established,
signed
commitments.

if necessary

by means

formal

of

institutions and financial

2.
The competent authorities responsible for carrying out
supervision on a consolidated basis must, in order to do so,
require the proportional consolidation of participations in
credit
institutions managed by an
undertaking included in the consolidation together with one or
more undertakings not included in the consolidation, where
the
those undertakings’
capital they hold.

liability is limited to the share of

3.
those referred to in paragraphs 1 and 2,

In the case of participations or capital ties other than
the competent

authorities shall determine whether and how consolidation is
to be carried out. In particular, they may permit or require use
the equity method. That method shall not, however,
of
constitute
in
inclusion of
supervision on a consolidated basis.

the undertakings

concerned

4. Without prejudice to paragraphs 1, 2 and 3,
competent authorities
consolidation is to be carried out in the following cases:

the
shall determine whether and how

(cid:151) where,

in the opinion of

the competent authorities, a
credit institution exercises a significant influence over one
institutions, but
or more credit institutions or financial
without holding a participation or other capital ties in
these institutions,

(cid:151) where

two or more

financial
credit
institutions are placed under single management other
than pursuant to a contract or clauses of their memoranda
or articles of association,

institutions or

(cid:151) where

two or more
have

financial
institutions
or
supervisory bodies with the same persons constituting a
majority.

administrative, management

institutions or

credit

In particular, the competent authorities may permit, or require
use of, the method provided for in Article 12 of Directive
83/349/EEC. That method shall not, however, constitute
inclusion of
the undertakings concerned in consolidated
supervision.

5. Where consolidated supervision is required pursuant to
Article 52(1) and (2), ancillary banking services undertakings
shall be included in consolidations
in the cases, and in
accordance with the methods laid down in paragraphs 1 to 4
of this Article.

Article 55

Information to be supplied by mixed-activity holding
companies and their subsidiaries

States

Pending further coordination of consolidation methods,
1.
the parent
that, where
Member
shall provide
credit
a
institutions
undertaking of one or more
the competent authorities
mixed-activity holding company,
those
responsible for the authorisation and supervision of
credit
institutions shall, by approaching the mixed-activity
holding company and its subsidiaries either directly or via
institution subsidiaries, require them to supply any
credit
for the purpose of
information which would be relevant
supervising the credit institution subsidiaries.

is

2. Member States
competent
shall provide
authorities may carry out, or have carried out by external

their

that

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inspectors, on-the-spot
to verify information
inspections
received from mixed-activity holding companies and their
subsidiaries. If the mixed-activity holding company or one of
its subsidiaries is an insurance undertaking, the procedure laid
down in Article 56(4) may also be used. If a mixed-activity
holding company or one of its subsidiaries is situated in a
Member State other than that in which the credit institution
subsidiary is situated, on-the-spot verification of information
shall be carried out in accordance with the procedure laid
down in Article 56(7).

Article 56

Measures to facilitate supervision on a consolidated basis

legal

there

are no

impediments

1. Member States shall take the necessary steps to ensure
that
the
undertakings included within the scope of supervision on a
consolidated basis, mixed-activity holding companies and their
subsidiaries, or subsidiaries of
the kind covered in Article
52(10), from exchanging amongst themselves any information
which would be relevant for the purposes of supervision in
accordance with Articles 52 to 55 and this Article.

preventing

2. Where a parent undertaking and any of its subsidiaries
that are credit institutions are situated in different Member
States, the competent authorities of each Member State shall
communicate to each other all relevant
information which
may allow or aid the exercise of supervision on a consolidated
basis.

the Member State in
Where the competent authorities of
which a parent undertaking is situated do not
themselves
exercise supervision on a consolidated basis pursuant to Article
53,
they may be invited by the competent authorities
responsible for exercising such supervision to ask the parent
undertaking for any information which would be relevant for
the purposes of supervision on a consolidated basis and to
transmit it to these authorities.

3. Member States shall authorise the exchange between
their competent authorities of the information referred to in
paragraph 2, on the understanding that, in the case of financial
holding companies, financial institutions or ancillary banking
services
collection or possession of
information shall not in any way imply that the competent
authorities are required to play a supervisory role in relation to
those institutions or undertakings standing alone.

undertakings,

the

Similarly, Member States
shall authorise their competent
authorities to exchange the information referred to in Article
55 on the understanding that the collection or possession of
information does not in any way imply that the competent
in relation to the
supervisory role
authorities play a

mixed-activity holding company and those of its subsidiaries
which are not credit institutions, or to subsidiaries of the kind
covered in Article 52(10).

or

are

companies

4. Where a credit institution, financial holding company or
a mixed-activity holding company controls one or more
subsidiaries which
other
insurance
undertakings providing investment services which are subject
to authorisation, the competent authorities and the authorities
entrusted with the public task of
supervising insurance
undertakings or those other undertakings providing investment
services shall cooperate closely. Without prejudice to their
respective responsibilities, those authorities shall provide one
another with any information likely to simplify their task and
to allow supervision of
financial
situation of the undertakings they supervise.

the activity and overall

5.
Information received, in the framework of supervision on
a consolidated basis, and in particular any exchange of
information between competent authorities which is provided
to the obligation of
for in this Directive, shall be subject
professional secrecy defined in Article 30.

The competent authorities responsible for supervision on
6.
a consolidated basis shall establish lists of the financial holding
companies referred to in Article 52(2). Those lists shall be
communicated to the competent authorities of
the other
Member States and to the Commission.

the

in applying this Directive,

7. Where,
competent
authorities of one Member State wish in specific cases to verify
the information concerning a credit
institution, a financial
holding company, a financial institution, an ancillary banking
services undertaking, a mixed-activity holding company, a
subsidiary of the kind covered in Article 55 or a subsidiary of
the kind covered in Article 52(10), situated in another Member
State, they must ask the competent authorities of that other
Member State to have that verification carried out. The
authorities which receive such a request must, within the
framework of their competence, act upon it either by carrying
the verification themselves, by allowing the authorities
out
who made the request
to carry it out, or by allowing an
auditor or expert to carry it out.

regulation or

administrative provisions

8. Without prejudice to their provisions of criminal
law,
Member States shall ensure that penalties or measures aimed at
ending observed breaches or the causes of such breaches may
be imposed on financial holding companies and mixed-activity
holding companies, or their effective managers, that infringe
laws,
enacted to
implement Articles 52 to 55 and this Article. In certain cases,
such measures may require the intervention of the courts. The
competent authorities shall cooperate closely to ensure that the
abovementioned penalties or measures produce the desired
results, especially when the central administration or main
establishment of a financial holding company or of a
mixed-activity holding company is not
its head
office.

located at

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TITLE VI

BANKING ADVISORY COMMITTEE

Article 57

Composition and tasks of the Banking Advisory
Committee

Articles 5(1) and 6(1), any other requirements which the
Member States apply and the information which must be
included in the programme of operations, and shall, where
appropriate, make suggestions to the Commission with a view
to a more detailed coordination.

A Banking Advisory Committee of

1.
competent
authorities of the Member States shall be set up alongside the
Commission.

the

The tasks of the Banking Advisory Committee shall be to
2.
assist the Commission in ensuring the proper implementation
of this Directive. Further it shall carry out the other tasks
prescribed by this Directive and shall assist the Commission in
the preparation of new proposals to the Council concerning
further coordination in the sphere of credit institutions.

The Banking Advisory Committee shall not concern itself
credit
relating

individual

problems

concrete

to

3.
with
institutions.

Article 59

Observation ratios

for

the

shall,

Pending

subsequent

coordination,

the purposes of observation and,

competent
1.
authorities
if
necessary, in addition to such coefficients as may be applied
by them, establish ratios between the various assets and/or
liabilities of credit institutions with a view to monitoring their
solvency and liquidity and the other measures which may
serve to ensure that savings are protected.

4.
The Banking Advisory Committee shall be composed of
not more than three representatives from each Member State
and from the Commission. These representatives may be
accompanied by advisers from time to time and subject to the
prior agreement of the Committee. The Committee may also
invite qualified persons and experts
to participate in its
meetings. The secretariat shall be provided by the Commission.

To this end, the Banking Advisory Committee shall decide on
the content of the various factors of the observation ratios
referred to in the first subparagraph and lay down the method
to be applied in calculating them.

and

elect

The Banking Advisory Committee shall adopt its rules of
5.
from among
the
chairman
procedure
It shall meet at regular
representatives of Member States.
intervals
The
the
Commission may ask the Committee to hold an emergency
meeting if it considers that the situation so requires.

and whenever

demands.

situation

a

The Banking Advisory Committee’s discussions and the
except when the

6.
outcome
shall be
thereof
Committee decides otherwise.

confidential

Where appropriate, the Banking Advisory Committee shall be
guided by technical consultations between the supervisory
authorities of the categories of institutions concerned.

The observation ratios

2.
paragraph 1 shall be calculated at least every six months.

established in pursuance of

Article 58

The Banking Advisory Committee shall examine the
3.
results of analyses carried out by the supervisory authorities
referred to in the third subparagraph of paragraph 1 on the
basis of the calculations referred to in paragraph 2.

Examination of the requirements for authorisation

The Banking Advisory Committee shall examine the content
given by the competent authorities to requirements listed in

4.
The Banking Advisory Committee may make suggestions
to the Commission with a view to coordinating the coefficients
applicable in the Member States.

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TITLE VII

POWERS OF EXECUTION

Article 60

Technical adaptations

1. Without prejudice, regarding own funds, to the report
referred to in the second subparagraph of Article 34(3), the
technical adaptations in the following areas shall be adopted in
accordance with the procedure laid down in paragraph 2:

(cid:151) clarification of the definitions in order to take account in
this Directive of developments on

the application of
financial markets,

(cid:151) the areas

in which the competent authorities must

exchange information as listed in Article 28,

(cid:151) amendment of the definitions of the assets listed in Article
43 in order to take account of developments on financial
markets,

(cid:151) the list and classification of off-balance-sheet

items in
Annexes II and IV and their treatment in the calculation of
the ratio as described in Articles 42, 43 and 44 and
Annex III,

(cid:151) clarification

ensure
application of this Directive in the Community,

definitions

the

to

of

uniform

(cid:151) a temporary reduction in the minimum ratio prescribed in
Article 47 or the weighting prescribed in Article 43 in
order to take account of specific circumstances,

(cid:151) the alignment of

terminology on and the framing of
definitions in accordance with subsequent acts on credit
institutions and related matters,

(cid:151) the definition of (cid:145)Zone A(cid:146) in Article 1(14),

(cid:151) the definition of
Article 1(19),

(cid:145)multilateral development banks(cid:146)

in

(cid:151) alteration of the amount of initial capital prescribed in
in the

Article 5 to take account of developments
economic and monetary field,

(cid:151) expansion of the content of the list referred to in Articles
18 and 19 and set out in Annex I or adaptation of the
terminology used in that
account of
list
developments on financial markets,

to take

(cid:151) clarification of exemptions provided for in Article 49(5) to

(10).

2.

The Commission shall be assisted by a committee.

Where reference is made to this paragraph, Articles 5 and 7 of
Decision 1999/468/EC shall apply, having regard to the
provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC
shall be set at three months.

The Committee shall adopt its rules of procedure.

TITLE VIII

TRANSITIONAL AND FINAL PROVISIONS

CHAPTER 1

TRANSITIONAL PROVISIONS

Article 61

Transitional provisions regarding Article 36

include joint and several commitments of members, or of
borrowers as referred to in Article 36(1) claims on whom are
treated in the
and several
commitments,
in their own funds, subject to the following
limits:

such joint

same way

as

(a)

the basis for calculation of the part of joint and several
commitments of borrowers shall be the total of the items
those
referred to in Article 34(2)(1) and (2), minus
referred to in Article 34(2)(9), (10) and (11);

Denmark may allow its mortgage credit institutions organised
as cooperative societies or funds before 1 January 1990 and
converted into public limited liability companies to continue to

(b)

the basis
if
converted at a later date, on the date on conversion, shall

for calculation on 1 January 1991 or,

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be the maximum basis for calculation. The basis for
calculation may never exceed the maximum basis for
calculation;

(c)

the maximum basis for calculation shall, from 1 January
1997, be reduced by half of the proceeds from any issue
of new capital, as defined in Article 34(2)(1), made after
that date; and

(d)

the maximum amount of joint and several commitments
of borrowers to be included as own funds must never
exceed:

50 % in 1991 and 1992,

45 % in 1993 and 1994,

40 % in 1995 and 1996,

35 % in 1997,

30 % in 1998,

20 % in 1999,

10 % in 2000, and

The property shall be revalued at least once a year by
one valuer. For loans not exceeding EUR 1 million and
5 % of the own funds of the credit institution, the
property shall be revalued at least every three years by
one valuer;

(b) 50 % of the market value of the property or 60 % of
the mortgage lending value, whichever is lower,
in
those Member States that have laid down rigorous
criteria for the assessment of the mortgage lending
value in statutory or regulatory provisions.

The mortgage lending value shall means the value of
the property as determined by a valuer making a
prudent assessment of the future marketability of the
property by taking into account long-term sustainable
aspects of the property, the normal and local market
conditions, the current use and alternative appropriate
uses of the property. Speculative elements shall not be
taken into account in the assessment of the mortgage
lending value. The mortgage lending value shall be
documented n a transparent and clear manner.

At least every three years or if the market falls by
more than 10 % the mortgage lending value and in
particular the underlying assumptions concerning the
development
be
reassessed.

relevant market,

shall

the

of

0 % after 1 January 2001, of the basis for calculation.

Article 62

Transitional provisions regarding Article 43

In both (a) and (b) (cid:145)market value(cid:146) shall mean the price at
which the property could be sold under private contract
between a willing seller and an arm’s-length buyer on the
date of valuation, it being assumed that the property is
publicly exposed to the market, that market conditions
permit orderly disposal and that a normal period, having
regard to the nature of the property, is available for the
negotiation of the sale;

1.
Until 31 December 2006, the competent authorities of
the Member States may authorise their credit institutions to
apply a 50 % risk weighting to loans fully and completely
secured to their satisfaction by mortgages on offices or on
multi-purpose
situated within the
territory of
those Member States that allow the 50 % risk
weighting, subject to the following conditions:

commercial premises

(ii)

the 100 % risk weighting applies to the part of the loan
that exceeds the limits set out in (i);

(iii) the property must be either used or let by the owner.

(i)

the 50 % risk weighting applies to the part of the loan that
does not exceed a limit calculated according to either (a)
or (b):

(a) 50 % of the market value of the property in question.

subparagraph shall not prevent

The first
the competent
authorities of a Member State, which applies a higher risk
weighting in its territory, from allowing, under the conditions
defined above, the 50 % risk weighting to apply for this type of
lending in the territories of those Member States that allow the
50 % risk weighting.

The market value of the property must be calculated
by two independent valuers making independent
assessments at the time the loan is made. The loan
must be based on the lower of the two valuations.

The competent authorities of the Member States may allow
their credit institutions to apply a 50 % risk weighting to the
the
loans outstanding on 21 July 2000 provided that

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conditions listed in this paragraph are fulfilled. In this case the
property shall be valued according to the assessment criteria
laid down above not later than 21 July 2003.

(cid:151) Sweden, before 1 June 1996, and

(cid:151) United Kingdom, before 30 April 1996.

For loans granted before 31 December 2006, the 50 % risk
weighting remains applicable until their maturity, if the credit
institution is bound to observe the contractual terms.

Article 63

Until 31 December 2006, the competent authorities of the
Member State may also authorise their credit institutions to
apply a 50 % risk weighting to the part of the loans fully and
completely secured to their satisfaction by shares in Finnish
housing companies operating in accordance with the Finnish
Housing Company Act of 1991 or subsequent equivalent
legislation, provided that
the conditions laid down in this
paragraph are fulfilled.

Member States shall inform the Commission of the use they
make of this paragraph.

2. Member States may apply a 50 % risk weighting to
property leasing transactions concluded before 31 December
2006 and concerning assets for business use situated in the
the head office and governed by statutory
country of
provisions whereby the lessor retains full ownership of the
rented asset until the tenant exercises his option to purchase.
Member States shall inform the Commission of the use they
make of this paragraph.

Article 43(3) shall not affect the competent authorities’
for novation concluded

3.
recognition of bilateral contracts
concerning:

(cid:151) Belgium, before 23 April 1996,

(cid:151) Denmark, before 1 June 1996,

(cid:151) Germany, before 30 October 1996,

(cid:151) Greece, before 27 March 1997,

(cid:151) Spain, before 7 January 1997,

(cid:151) France, before 30 May 1996,

(cid:151) Ireland, before 27 June 1996,

(cid:151) Italy, before 30 July 1996,

(cid:151) Luxembourg, before 29 May 1996,

(cid:151) the Netherlands, before 1 July 1996,

(cid:151) Austria, before 30 December 1996,

(cid:151) Portugal, before 15 January 1997,

(cid:151) Finland, before 21 August 1996,

Transitional provisions regarding Article 47

1.
A credit institution, the minimum ratio of which has not
reached the 8 % prescribed in Article 47(1), by 1 January
1991, must gradually approach that level by successive stages.
It may not allow the ratio to fall below the level reached
before that objective has been attained. Any fluctuation should
be temporary and the competent authorities
should be
apprised of the reasons for it.

2.
For not more than five years after 1 January 1993, the
Member States may fix a weighting of 10 % for the bonds
defined in Article 22(4) of Directive 85/611/EEC and maintain
if for credit institutions when and if they consider it necessary,
to avoid grave disturbances in the operation of their markets.
Such exceptions shall be reported to the Commission.

3.
For not more than seven years after 1 January 1993,
Article 47(1) shall not apply to the Agricultural Bank of
Greece. However, the latter must approach the level prescribed
in Article 47(1) by successive stages according to the method
described in paragraph 1 of this Article.

Article 64

Transitional provisions regarding Article 49

1.
If, on 5 February 1993, a credit institution had already
incurred an exposure or exposures exceeding either the large
exposure limit or the aggregate large exposure limit laid down
in Article 49, the competent authorities shall require the credit
institution concerned to take steps to have that exposure
or those exposures brought within the limits laid down in
Article 49.

2.
The process of having such an exposure or exposures
brought within authorised limits shall be devised, adopted,
implemented and completed within the period which the
competent authorities consider consistent with the principle of
sound administration and fair competition. The competent
authorities shall
inform the Commission and the Banking
Advisory Committee of the schedule for the general process
adopted.

3.
A credit institution may not take any measure which
would cause the exposures referred to in paragraph 1 to
exceed their level on 5 February 1993

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4.
The period applicable under paragraph 2 shall expire no
than 31 December 2001. Exposures with a longer
later
maturity, for which the lending institution is bound to observe
the contractual terms, may be continued until their maturity.

5.
Until 31 December 1998, Member States may increase
the limit laid down in Article 49(1) to 40 % and the limit laid
down in Article 49(2) to 30 %. In such cases and subject to
paragraphs 1 to 4, the time limit for bringing the exposures
existing at the end of this period within the limit laid down in
Article 49 shall expire on 31 December 2001.

6.
In the case of credit institutions the own funds of which
do not exceed EUR 7 million and only in the case of such
institutions, Member States may extend the time limits laid
down in paragraph 5 by five years. Member States that avail
themselves of the option provided for in this paragraph shall
take steps to prevent distortions of competition and shall
inform the Commission and the Banking Advisory Committee
thereof.

In the cases referred to in paragraphs 5 and 6, an
7.
exposure may be considered a large exposure if its value is
equal to or exceeds 15 % of own funds.

Until 31 December 2001 Member States may substitute a
8.
frequency of at
the frequency of
twice a year
notification of large exposures referred to in the second indent
of Article 48(2).

least

for

9. Member States may fully or partially exempt from the
application of Article 49(1), (2) and (3) exposures incurred by
a credit institution consisting of mortgage loans as defined in
Article 62(1) concluded before 1 January 2002 as well as
property leasing transactions as defined in Article 62(2)
concluded before 1 January 2002, in both cases up to 50 % of
the value of the property concerned.

The same treatment applies to loans secured, to the satisfaction
of the competent authorities, by shares in Finnish residential
housing companies, operating in accordance with the Finnish
Housing Company Act of 1991 or subsequent equivalent
legislation which are similar to the mortgage loans referred to
in the first subparagraph.

CHAPTER 2

FINAL PROVISIONS

Article 66

Commission information

Member States shall communicate to the Commission the texts
of the main laws, regulations and administrative provisions
which they adopt in the field covered by this Directive.

Article 67

Repealed Directives

1.
Directives 73/183/EEC, 77/780/EEC, 89/299/EEC, 89/646/
EEC, 89/647/EEC, 92/30/EEC and 92/121/EEC, as amended by
the Directives set out in Annex V, Part A, are hereby repealed
the Member States
without prejudice to the obligations of
concerning the deadlines
said
Directives listed in Annex V, Part B.

transposition of

the

for

References to the repealed Directives shall be construed
to this Directive and should be read in

2.
as
accordance with the correlation table in Annex VI.

references

Article 68

Implementation

This Directive shall enter into force on the 20th day following
the European
its publication in the Official
Communities.

Journal

of

Article 69

Addressees

Article 65

This Directive is addressed to the Member States.

Transitional provisions regarding Article 51

Done at Brussels, 20 March 2000.

Credit institutions which, on 1 January 1993, exceeded the
limits laid down in Articles 51(1) and (2) shall have until 1
January 2003 to comply with them.

For the European Parliament

The President

N. FONTAINE

For the Council

The President

J. GAMA

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ANNEX I

LIST OF ACTIVITIES SUBJECT TO MUTUAL RECOGNITION

1. Acceptance of deposits and other repayable funds

2. Lending (1)

3. Financial leasing

4. Money transmission services

5.

Issuing and administering means of payment (e.g. credit cards, travellers’ cheques and bankers’ drafts)

6. Guarantees and commitments

7. Trading for own account or for account of customers in:

(a) money market instruments (cheques, bills, certificates of deposit, etc.)

(b) foreign exchange;

(c) financial futures and options;

(d) exchange and interest-rate instruments;

(e) transferable securities

8. Participation in securities issues and the provision of services related to such issues

9. Advice to undertakings on capital structure, industrial strategy and related questions and advice as well as services

relating to mergers and the purchase of undertakings

10. Money broking

11. Portfolio management and advice

12. Safekeeping and administration of securities

13. Credit reference services

14. Safe custody services

(1) Including, inter alia:

(cid:151) consumer credit,
(cid:151) mortgage credit,
(cid:151) factoring, with or without recourse,
(cid:151) financing of commercial transactions (including forfeiting).

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ANNEX II

CLASSIFICATION OF OFF-BALANCE-SHEET ITEMS

Full risk

(cid:151) Guarantees having the character of credit substitutes,

(cid:151) Acceptances,

(cid:151) Endorsements on bills not bearing the name of another credit institution,

(cid:151) Transactions with recourse,

(cid:151) Irrevocable standby letters of credit having the character of credit substitutes,

(cid:151) Assets purchased under outright forward purchase agreements,

(cid:151) Forward forward deposits,

(cid:151) The unpaid portion of partly-paid shares and securities,

(cid:151) Other items also carrying full risk.

Medium risk

(cid:151) Documentary credits issued and confirmed (see also medium/low risk),

(cid:151) Warranties and indemnities (including tender, performance, customs and tax bonds) and guarantees not having the

character of credit substitutes,

(cid:151) Asset sale and repurchase agreements as defined in Article 12(3) and (5) of Directive 86/635/EEC,

(cid:151) Irrevocable standby letters of credit not having the character of credit substitutes,

(cid:151) Undrawn credit facilities (agreements to lend, purchase securities, provide guarantees or acceptance facilities) with

an original maturity of more than one year,

(cid:151) Note issuance facilities (NIFs) and revolving underwriting facilities (RUFs),

(cid:151) Other items also carrying medium risk.

Medium/low risk

(cid:151) Documentary credits in which underlying shipment acts as collateral and other self-liquidating transactions,

(cid:151) Other items also carrying medium/low risk.

Low risk

(cid:151) Undrawn credit facilities (agreements to lend, purchase securities, provide guarantees or acceptance facilities) with
an original maturity of up to and including one year or which may be cancelled unconditionally at any time
without notice,

(cid:151) Other items also carrying low risk.

they have agreed to include a new
The Member States undertake to inform the Commission as
off-balance-sheet item in any of the last indents under each category of risk. Such items will be definitively classified at
Community level once the procedure laid down in Article 60 has been completed.

soon as

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ANNEX III

THE TREATMENT OF OFF-BALANCE-SHEET ITEMS

1. CHOICE OF THE METHOD

To measure the credit risks associated with the contracts listed in points 1 and 2 of Annex IV, credit institutions may
choose, subject to the consent of the competent authorities, one of the methods set out below. Credit institutions
which have to comply with Article 6(1) of Directive 93/6/EEC (1) must use method 1 set out below. To measure the
credit risks associated with the contracts listed in point 3 of Annex IV all credit institutions must use method 1 set out
below.

2. METHODS

Method 1:

the (cid:145)mark to market(cid:146) approach

Step (a):

Step (b):

by attaching current market values to contracts (mark to market), the current replacement cost of all
contracts with positive values is obtained.

to obtain a figure for potential future credit exposure (2), the notional principal amounts or underlying
values are multiplied by the following percentages:

TABLE 1 (a) (b)

Residual maturity (c)

Interest-rate
contracts

Contracts
concerning
foreign-exchange
rates and gold

Contracts
concerning
equities

Contracts
concerning
precious metals
except gold

Contracts
concerning
commodities
other than
precious metals

One year or less

Over one year, less than five years

Over five years

0 %

0,5 %

1,5 %

1 %

5 %

7,5 %

6 %

8 %

10 %

7 %

7 %

8 %

10 %

12 %

15 %

(a) Contracts which do not fall within one of the five categories indicated in this table shall be treated as contracts concerning

commodities other than precious metals.

(b) For contracts with multiple exchanges of principal, the percentages have to be multiplied by the number of remaining payments

(c)

still to be made according to the contract.
For contracts that are structured to settle outstanding exposure following specified payment dates and where the terms are reset
such that the market value of the contract is zero on these specified dates, the residual maturity would be equal to the time until
the next reset date. In the case of interest-rate contracts that meet these criteria and have a remaining maturity of over one year, the
percentage shall be no lower than 0,5 %.

For the purpose of calculating the potential future exposure in accordance with step (b) the competent authorities may
allow credit institutions until 31 December 2006 to apply the following percentages instead of those prescribed in
Table 1 provided that the institutions make use of the option set out in Article 11a of Directive 93/6/EEC for contracts
within the meaning of paragraph 3(b) and (c) of Annex IV:

TABLE 1a

Residual maturity

Precious metals
(except gold)

Base metals

Agricultural products
(softs)

Other, including
energy products

One year or less

Over one year, less than five years
Over five years

2 %

5 %
7,5 %

2,5 %

4 %
8 %

3 %

5 %
9 %

4 %

6 %
10 %

(1) Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment firms and credit institutions (OJ L 141,

11.6.1993, p. 1). Directive amended by Directive 98/33/EC (OJ L 204, 21.7.1998, p. 29).

(2) Except in the case of single-currency (cid:145)floating/floating(cid:146)

interest rate swaps in which only the current replacement cost will be

calculated.

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Step (c):

the sum of current replacement cost and potential future credit exposure is multiplied by the risk
weightings allocated to the relevant counterparties in Article 43.

Method 2:

the (cid:145)original exposure(cid:146) approach

Step (a):

the notional principal amount of each instrument is multiplied by the percentages given below:

TABLE 2

Original maturity (1)

Interest-rate contracts

Contracts concerning
foreign-exchange rates and gold

One year or less
More than one year but not exceeding two years

Additional allowance for each additional year

0,5 %
1 %

1 %

2 %
5 %

3 %

(1)

In the case of interest-rate contracts, credit institutions may, subject to the consent of their competent authorities, choose either
original or residual maturity.

Step (b):

the original exposure thus obtained is multiplied by the risk weightings allocated to the relevant
counterparties in Article 43.

For methods 1 and 2 the competent authorities must ensure that the notional amount to be taken into account is an
the contract provides for a
in the contract. Where,
appropriate yardstick for the risk inherent
multiplication of cash flows, the notional amount must be adjusted in order to take into account the effects of the
multiplication on the risk structure of that contract.

for instance,

3. CONTRACTUAL NETTING (CONTRACTS FOR NOVATION AND OTHER NETTING AGREEMENTS)

(a) Types of netting that competent authorities may recognise

For the purpose of this point 3 (cid:145)counterparty(cid:146) means any entity (including natural persons) that has the power to
conclude a contractual netting agreement.

The competent authorities may recognise as risk-reducing the following types of contractual netting:

(i) bilateral contracts for novation between a credit institution and its counterparty under which mutual claims
and obligations are automatically amalgamated in such a way that this novation fixes one single net amount
each time novation applies and thus creates a legally binding, single new contract extinguishing former
contracts;

(ii) other bilateral agreements between a credit institution and its counterparty.

(b) Conditions for recognition

The competent authorities may recognise contractual netting as risk-reducing only under the following conditions:

(i)

a credit institution must have a contractual netting agreement with its counterparty which creates a single legal
obligation, covering all included transactions, such that, in the event of a counterparty’s failure to perform
owing to default, bankruptcy, liquidation or any other similar circumstance, the credit institution would have a
claim to receive or an obligation to pay only the net sum of the positive and negative mark-to-market values
of included individual transactions;

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(ii) a credit institution must have made available to the competent authorities written and reasoned legal opinions
to the effect that, in the event of a legal challenge, the relevant courts and administrative authorities would, in
the cases described under (i), find that the credit institution’s claims and obligations would be limited to the
net sum, as described in (i), under:

(cid:151) the law of the jurisdiction in which the counterparty is incorporated and,

if a foreign branch of an

undertaking is involved, also under the law of the jurisdiction in which the branch is located,

(cid:151) the law that governs the individual transactions included, and

(cid:151) the law that governs any contract or agreement necessary to effect the contractual netting;

(iii) a credit institution must have procedures in place to ensure that the legal validity of its contractual netting is

kept under review in the light of possible changes in the relevant laws.

The competent authorities must be satisfied,
if necessary after consulting the other competent authorities
concerned, that the contractual netting is legally valid under the law of each of the relevant jurisdictions. If any of
the competent authorities are not satisfied in that respect, the contractual netting agreement will not be recognised
as risk-reducing for either of the counterparties.

The competent authorities may accept reasoned legal opinions drawn up by types of contractual netting.

No contract containing a provision which permits a non-defaulting counterparty to make limited payments only,
or no payments at all, to the estate of the defaulter, even if the defaulter is a net creditor (a (cid:145)walkaway(cid:146) clause), may
be recognised as risk-reducing.

recognise

competent

authorities may

The
covering
foreign-exchange contracts with an original maturity of 14 calendar days or less written options or similar
off-balance-sheet items to which this Annex does not apply because they bear only a negligible or no credit risk. If,
depending on the positive or negative market value of these contracts, their inclusion in another netting agreement
can result in an increase or decrease of the capital requirements, competent authorities must oblige their credit
institution to use a consistent treatment.

contractual-netting

risk-reducing

agreements

as

(c) Effects of recognition

(i) Contracts for novation

The single net amounts fixed by contracts for novation, rather than the gross amounts involved, may be
weighted. Thus, in the application of method 1, in

(cid:151) step (a): the current replacement cost, and in

(cid:151) step (b): the notional principal amounts or underlying values

may be obtained taking account of the contract for novation. In the application of method 2, in step (a) the
notional principal amount may be calculated taking account of the contract for novation; the percentages of
Table 2 must apply.

(ii) Other netting agreements

In application of method 1:

(cid:151) in step (a) the current replacement cost for the contracts included in a netting agreement may be obtained
by taking account of the actual hypothetical net replacement cost which results from the agreement; in
the case where netting leads to a net obligation for the credit institution calculating the net replacement
cost, the current replacement cost is calculated as (cid:145)0(cid:146),

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(cid:151) in step (b) the figure for potential future credit exposure for all contracts included in a netting agreement

may be reduced according to the following equation:

PCEred = 0,4 * PCEgross + 0,6 * NGR * PCEgross

where:

(cid:151) PCEred

= the reduced figure for potential future credit exposure for all contracts with a given

counterparty included in a legally valid bilateral netting agreement,

(cid:151) PCEgross = the sum of the figures for potential future credit exposure for all contracts with a given
counterparty which are included in a legally valid bilateral netting agreement and are
calculated by multiplying their notional principal amounts by the percentages set out in
Table 1,

(cid:151) NGR

= (cid:145)net-to-gross ratio(cid:146): at the discretion of the competent authorities either:

(i)

the quotient of

separate calculation:
for all contracts
included in a legally valid bilateral netting agreement with a given counterparty
(numerator) and the gross replacement cost for all contracts included in a legally
valid bilateral netting agreement with that counterparty (denominator), or

the net replacement cost

(ii) aggregate calculation: the quotient of the sum of the net replacement cost calculated
on a bilateral basis for all counterparties taking into account the contracts included
in legally valid netting agreements (numerator) and the gross replacement cost for all
contracts included in legally valid netting agreements (denominator).

If Member States permit credit institutions a choice of methods, the method chosen
is to be used consistently.

For the calculation of the potential future credit exposure according to the above formula perfectly matching
contracts included in the netting agreement may be taken into account as a single contract with a notional
principal equivalent to the net receipts. Perfectly matching contracts are forward foreign-exchange contracts or
similar contracts in which a notional principal is equivalent to cash flows if the cash flows fall due on the
same value date and fully or partly in the same currency.

In the application of method 2, in step (a)

(cid:151) perfectly matching contracts included in the netting agreement may be taken into account as a single
contract with a notional principal equivalent to the net receipts, the notional principal amounts are
multiplied by the percentages given in Table 2,

(cid:151) for all other contracts included in a netting agreement, the percentages applicable may be reduced as

indicated in Table 3:

TABLE 3

Original maturity (1)

Interest-rate contracts

Foreign-exchange contracts

One year or less

More than one year but not more than two years

Additional allowance for each additional year

0,35 %

0,75 %

0,75 %

1,50 %

3,75 %

2,25 %

(1)

In the case of interest-rate contracts, credit institutions may, subject to the consent of their competent authorities, choose either
original or residual maturity.

L 126/52

EN

Official Journal of the European Communities

26.5.2000

ANNEX IV

TYPES OF OFF-BALANCE-SHEET ITEMS

1.

Interest-rate contracts:

(a)

single-currency interest rate swaps;

(b) basis-swaps;

(c)

forward rate agreements;

(d)

interest-rate futures;

(e)

interest-rate options purchased;

(f) other contracts of similar nature.

2.

Foreign-exchange contracts and contracts concerning gold:

(a) cross-currency interest-rate swaps;

(b)

forward foreign-exchange contracts;

(c) currency futures;

(d) currency options purchased;

(e) other contracts of a similar nature;

(f)

contracts concerning gold of a nature similar to (a) to (e).

3. Contracts of a nature similar to those in points 1(a) to (e) and 2(a) to (d) concerning other reference items

or indices concerning:

(a) equities;

(b) precious metals except gold;

(c) commodities other than precious metals;

(d) other contracts of a similar nature.

26.5.2000

EN

Official Journal of the European Communities

L 126/53

ANNEX V

PART A

REPEALED DIRECTIVES TOGETHER WITH THEIR SUCCESSIVE AMENDMENTS

(referred to in Article 67)

Council Directive 73/183/EEC

Council Directive 77/780/EEC

Council Directive 85/345/EEC

Council Directive 86/137/EEC

Council Directive 86/524/EEC

Council Directive 89/646/EEC

Directive 95/26/EC of the European Parliament and of the Council,

only Article 1, first indent, Article 2(1), first indent and (2), first indent, Article 3(2), Article 4(2), (3) and (4), as
regards references to Directive 77/780/EEC, and (6), and Article 5, first indent

Council Directive 96/13/EC

Directive 98/33/EC of the European Parliament and of the Council

Council Directive 89/299/EEC

Council Directive 91/633/EEC

Council Directive 92/16/EEC

Council Directive 92/30/EEC

Council Directive 89/646/EEC

Council Directive 92/30/EEC

Directive 95/26/EC of the European Parliament and of the Council

only Article 1, first indent

Council Directive 89/647/EEC

Commission Directive 91/31/EEC

Council Directive 92/30/EEC

Commission Directive 94/7/EC

Commission Directive 95/15/EC

Commission Directive 95/67/EC

Directive 96/10/EC of the European Parliament and of the Council

Directive 98/32/EC of the European Parliament and of the Council

Directive 98/33/EC of the European Parliament and of the Council (Article 2)

Council Directive 92/30/EEC

Council Directive 92/121/EEC

L 126/54

EN

Official Journal of the European Communities

26.5.2000

PART B

DEADLINES FOR IMPLEMENTATION

(referred to in Article 67)

Directive

Deadline for implementation

Article 6(2),

other provisions

73/183/EEC (OJ L 194, 16.7.1973, p. 1)

77/780/EEC (OJ L 322, 17.12.1977, p. 30)

85/345/EEC (OJ L 183, 16.7.1985, p. 19)

86/137/EEC (OJ L 106, 23.4.1986, p. 35)

86/524/EEC (OJ L 309, 4.11.1986, p. 15)

89/299/EEC (OJ L 124, 5.5.1989, p. 16)

89/646/EEC (OJ L 386, 30.12.1989, p. 1)

89/647/EEC (OJ L 386, 30.12.1989, p. 14)

91/31/EEC (OJ L 17, 23.1.1991, p. 20)

91/633/EEC (OJ L 339, 11.12.1991, p. 16)

92/16/EEC (OJ L 75, 31.3.1992, p. 48)

92/30/EEC (OJ L 110, 28.4.1992, p. 52)

92/121/EEC (OJ L 29, 5.2.1993, p. 1)

94/7/EC (OJ L 89, 6.4.1994, p. 17)

95/15/EC (OJ L 125, 8.6.1995, p. 23)

95/26/EC (OJ L 168, 18.7.1995, p. 7)

95/67/EC (OJ L 314, 28.12.1995, p. 72)

96/10/EC (OJ L 85, 3.4.1996, p. 17)

96/13/EC (OJ L 66, 16.3.1996, p. 15)

98/32/EC (OJ L 204, 21.7.1998, p. 26)

98/33/EC (OJ L 204, 21.7.1998, p. 29)

2.1.1975 (1)

15.12.1979

15.7.1985

(cid:151)

31.12.1986

1.1.1993

1.1.1990

1.1.1993

1.1.1991

31.3.1991

31.12.1992

31.12.1992

31.12.1992

31.12.1993

25.11.1994

30.9.1995

18.7.1996

1.7.1996

30.6.1996

15.4.1996

21.7.2000

21.7.2000

(1) However, as regards the abolition of

the restriction referred to in Article 3(2)(g),

the Netherlands was allowed to defer

implementation until 2 July 1977. (See: Article 8, second subparagraph of Directive 73/183/EEC).

ANNEX VI

CORRELATION TABLE

This Directive

Directive 77/780/EEC

Directive 89/299/EEC

Directive 89/646/EEC

Directive 89/647/EEC

Directive 92/30/EEC

Directive 92/121/EEC

Directive 96/10/EC

Article 1(1)

Article 1, first indent

Article 1, first indent

Article 1(a)

Article 1, second
indent

Article 1(2)

Article 1(3)

Article 1(4) to (8)

Article 1(9)

Article 1(10) and (11)

Article 1(12)

Article 1(13)

Article 1(14) to (17)

Article 1(18) to (20)

Article 1(21) to (23)

Article 1(24)

Article 1(25)

Article 1(26)

Article 1, fifth indent

Article 1(27)

Article 1(3)

Article 1(5) to (9)

Article 1(10) and (11)

Article 1(12)

Article 1(13)

Article 1, sixth indent

Article 1, seventh
indent

Article 1, eighth
indent

Article 1(c)

Article 1(d)

Article 1, third to fifth
indents

Article 1(h)

Article 1(m)

Article 2(1), second to
fifth indents

Article 2(1), sixth to
eighth indents

Article 2(1), ninth
indent

Article 2(1)

Article 2(1)

Article 2(1)

Article 1(1)

Article 2(2)

Article 2(3)

Article 2(2)

Article 2

.

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This Directive

Directive 77/780/EEC

Directive 89/299/EEC

Directive 89/646/EEC

Directive 89/647/EEC

Directive 92/30/EEC

Directive 92/121/EEC

Directive 96/10/EC

Article 2(4)

Article 2(3)

Article 2(5), first, second
and third subparagraph

Article 2(4)(a), (b) and
(c)

Article 2(6)

Article 3

Article 4

Article 3(1)

Article 5(1), first
subparagraph

Article 3(2), first
subparagraph

Article 5(1), second
subparagraph

Article 10(1), third
subparagraph

Article 5(2)

Article 5(3) to (7)

Article 6(1)

Article 3(2), first
subparagraph, third
indent and second
subparagraph

Article 6(2)

Article 3(2)a

Article 7(1) and (2)

Article 3(2) third,
fourth and fifth
subparagraphs

Article 3(4)

Article 3(3)(a)

Article 3(6)

Article 3(7)

Article 7(3)

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 2(3)

Article 1(3)

Article 2(2)(b)

Article 3

Article 4(1)

Article 4(2),
introductory sentence,
(a), (b) and (c)

Article 10(1) to (5)

Article 1(10), second
subparagraph and
Article 5(1) and (2)

Article 7

Article 6(1)

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This Directive

Directive 77/780/EEC

Directive 89/299/EEC

Directive 89/646/EEC

Directive 89/647/EEC

Directive 92/30/EEC

Directive 92/121/EEC

Directive 96/10/EC

Article 14(1)

Article 14(2)

Article 15

Article 16(1) to (5)

Article 16(6)

Article 17

Article 18

Article 19

Article 20(1) to (6)

Article 20(7)

Article 21(1) and (2)

Article 21(3)

Article 22

Article 23(1)

Article 23(2) to (7)

Article 24

Article 25

Article 26

Article 27

Article 28

Article 29

Article 8(1)

Article 8(5)

Article 5

Article 9

Article 7(1)

Article 30(1) to (5)

Article 12(1) to (5)

Article 30(6)

Article 30(7)

Article 30(8)

Article 30(9)

Article 12(5a)

Article 12(5b)

Article 12(6)

Article 12(7)

Article 30(10)

Article 12(8)

Article 11(1) to (5)

Article 1(10), second
subparagraph

Article 13(2)

Article 18(1)

Article 18(2)

Article 19

Article 23(1)

Article 20

Article 23(2)

Article 21

Article 8

Article 9

Article 13(1) and (3)

Article 14(2)

Article 15

Article 8

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This Directive

Directive 77/780/EEC

Directive 89/299/EEC

Directive 89/646/EEC

Directive 89/647/EEC

Directive 92/30/EEC

Directive 92/121/EEC

Directive 96/10/EC

Article 12a

Article 13

Article 31

Article 32

Article 33

Article 34(1)

Article 34(2) to (4)

Article 35

Article 36

Article 37

Article 38

Article 39

Article 40

Article 41

Article 42

Article 43

Article 44

Article 45

Article 46

Article 47

Article 48

Article 49

Article 50

Article 51(1) to (5)

Article 51(6)

Article 52(1) to (7)

Article 17

Article 1(1)

Article 2(1) to (3)

Article 3

Article 4

Article 5

Article 6(1) and (4)

Article 7

Article 3(1) to (4), (7)
and (8)

Article 4

Article 5

Article 6

Article 7

Article 8

Article 2(2)

Article 10

Article 3

Article 4(1) to (7)(r),
second subparagraph,
first sentence, and
(7)(s) to (12)

Article 5(1) to (3)

Article 12(1) to (5)

Article 12(8)

Article 3(1) to (7)

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This Directive

Directive 77/780/EEC

Directive 89/299/EEC

Directive 89/646/EEC

Directive 89/647/EEC

Directive 92/30/EEC

Directive 92/121/EEC

Directive 96/10/EC

Article 52(8) and (9)

Article 52(10)

Article 53

Article 54

Article 55

Article 56

Article 57

Article 58

Article 59

Article 60

Article 61

Article 62(1) and (2)

Article 62(3)

Article 63

Article 64

Article 65

Article 66

Article 67

Article 68

Article 69

Annex I

Annex II

Annex III

Annex IV

Annex V

Annex VI

Article 3(5) and (6)

Article 3(8) and (9)

Article 5(4) and (5)

Article 3(10)

Article 4

Article 5

Article 6

Article 7

Article 11

Article 3(5)

Article 6

Article 8

Article 4a

Article 22

Article 9

Article 7

Article 11(4) and (5)

Article 11(1) to (3)

Article 2

Article 6(1) to (9)

Article 14(2)

Article 9(2)

Article 24(3)

Article 12(2)

Article 12(7)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

Annex

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

Annex I

Annex II

Annex III

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

(cid:151)

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