CELEX: 51989PC0578
Language: en
Date: 1989-11-15
Title: REEXAMINED PROPOSAL FOR A COUNCIL DIRECTIVE ON A SOLVENCY RATIO FOR CREDIT INSTITUTIONS

COMMISSION OF THE EUROPEAN COMMUNITIES
                                     COM (89) 578  final - SYN 133
                                     Brussels, 15 November 1989
                    REEXAMINED PROPOSAL FOR A
                        COUNCIL DIRECTIVE
                     ON A SOLVENCY RATIO FOR
                       CREDIT INSTITUTIONS
            (presented by the Commission pursuant to
              Article 149(2)(d) of the EEC Treaty)
 ---pagebreak---                                                                    GW 0 8
                               REEXAMINED PROPOSAL
                            FOR A COUNCIL DIRECTIVE
                 ON A SOLVENCY RATIO FOR CREDIT INSTITUTIONS
                             Explanatory Memorandum
1. The original proposal for a Council Directive on a Solvency ratio for
   Credit Institutions was submitted by the Commission to the Council on
   27 April 19881>.
2. The Economic and Social Committee delivered its opinion2) on 27 October
   1988 and the European Parliament delivered its opinion3) on 15 March
   1989.
3. Pursuant to Article 149(3) of the Treaty, the Commission submitted an
   amended    proposal4)  which    largely  took   account of  the  proposed
   amendments.
4. On 24 July 1989 the Council unanimously agreed on a common position5)
   on which the Council has delivered its reasons6) and the Commission its
   observâtions7^.
5. The European Parliament had its second reeding on 25 October 1989 under
   the cooperation procedure arid voted in faveur of four amendements8).
T) ÔJ Ki* C 155 of 25.5.1988, p.4
2) OJ N° C 337 of 31.12.1988, p. 8
3) OJ N° C 96 of 17.4.1989, p. 83
4) OJ N° C 167 of 3.7.1989, p. 40
5) The Council Doc. 7836/89 of 24.7.19»
6) The Council Doc. 7836/89, Add. 1 of 20.7.1989 and CON. 1 of 24.7.1989
   and CON. 2 of 25.10.1989
7) Sec(89) 206 final - SYN 133 of 24.7.1989
8) EP 135.514
                                                                             <
 ---pagebreak---                                          - 2. -
6. The two first amendments adopted by the European Parliament concern the
    question   of   comito logy   and    they   propose    to   use   the   management
    committee, procedure 11 B of the        Council's decision of 13 July 1987 9 ).
    The Parliament rejected Art. 9(2) of the Council's common position in
    which   the   Council     suggested     the   use    of    regularoty    committee
    procedure III B.
7. The Commission     thought   it appropriate to propose        in all   the banking
    directives the procedure of regulatory committee, procedure I M A of the
   Council's decision of 13 July 1967. This procedure gives the Commission
   ail the powers it needs and it is the only adequate procedure talcing
    into account the nature of the measures which will have to be taken. In
    the banking field, the implementing powers will not be used for a day-
    to-day management, as it is the case in other sectors (e.g. agriculture)
   where the management committee procedure is appropriate.
8. This is the reason why the Commission, although it welcomes the decision
   of the European Parliament to reject the position of the Council on
   Comitology, prefers to persist in its reexamined proposal and vigorously
   defend the regulatory committee version M I A .
9. The   third  amendment   adopted    by the European      Parliament    proposes  to
   prolong by five years and until 2001 the special derogation in Article
   11(4) which     grants   credit    institutions    the   right   to  apply   a  50%
   weighting on     loans backed by mortgage on commercial           properties. The
   Parliament argues that for reasons of competition this derogation should
   have the same length of time as the derogation             in Article 11(5). The
   Commission can not accept this amendment for the reason that the latter
   derogation is a general one which all Member States can apply whereas
   the derogation in Article 11(4) only is included in order to help three
   Member States with specific problems.
10 The last amendment     is a textual improvement of Article 11(5) which the
   Commission is prepared to accept.
Ô) ÔJ N a L 1Ô7 of 18.7.1987, p. 33
                                                                                       0.
 ---pagebreak---                                          REEXAMINED PROPOSAL
                                      FOR A COUNCIL DIRECTIVE
                         ON A SOLVENCY RATIO FOR CREDIT INSTITUTIONS
Common position of the Council                     Reexamined proposal of the Commission
                                    Recitals 1 to 13 unchanged
14th Recital                                        14th Recital
Whereas technical      modifications to the        Whereas    technical     modifications      to  the
detailed     rules     contained      in    this   detailed rules contained in this directive
directive    may   from    time   to   time   be   may   from  time    to   time   be   necessary   to
necessary to respond to new developments            respond to new developments in the banking
in   the   banking     sector;   whereas     the   sector;    whereas      the   Commission      shaii
Commission shall      accordingly make such        accordingly make such modifications as are
modifications     as  are   necessary,     after   necessary,    after    consulting     the   Banking
consulting       the     Banking       Advisory    Advisory Committee, within the           limits of
Committee,    within    the   limits    of   the   the implementing powers delegated to the
implementing     powers   delegated     to   the   Commission     by    the    provisions     of   the
Commission    by   the   provisions     of   the   Treaty; whereas that Committee shaii act
Treaty; whereas that Committee shall act           as a 'Regulatory' Committee, according to
as a   'Regulatory' Committee, according           the)  rules   of    procedure      laid   down   in
to the rules of procedure        laid down in      Article 2, procedure        III, variant     (a) of
Article 2, procedure M i , variant (b) of          Council   Decision     87/373/EEC     of   13 July
Council Decision 87/373/EEC of 13 July             1987    laying    down    procedures      for   the
1987   laying    down   procedures     for   the   exercise of    implementing powers conferred
exercise      of      implementing        powers   orr the Commission3)
conferred on the CornaitssIon3);
      3) ÔJ No L 197, 18.7.1987, p. 33             3) OJ NO L 197, 18.7.1987, p. 33
 ---pagebreak---                                                  - 2 -
 Common position of the Council                     Reexamined proposal of the Commission
                                    Articles 1 to 8: unchanged
                                      Article 9(1): unchanged
Article 9(2)                                        Article 9(2)
2. The Commission shall be assisted by a            2. The Commission shall be assisted by a
committee composed of representatives of            committee   composed of representatives of
the   Member    States   and    chaired    by  a    the   Member    States     and    chaired     by   a
representative of the Commission.                   representative of the Commission.
The    Commission     representative      shall     The Commission representative shall submit
submit to the committee a draft of the              to the committee a draft of the measures
measures    to   be   taken.   The    committee     to be taken. The committee shall deliver
shall deliver     its opinion on the draft          its opinion on      the draft     within    a time
within a time limit which the chairman              limit  which    the   chairman     may   lay    down
may lay down according to the urgency of            according   to the urgency of         the matter.
the   matter.     The    opinion     shall    be   The   opinion    shall   be    delivered    by    the
delivered by the majority         laid down in     majority    laid down     in Article     148(2) of
Article 148(2) of the Treaty in the case            the Treaty in the case of decisions which
of   decisions     which    the    Council    is    the Council     is required      to   adopt    on a
required to adopt on a proposal from the           proposal from the Commission. The votes of
Commission.       The      votes      of     the    the representatives of the Member states
representatives of the Member States in             in the committee shall be weighted           in the
the committee shall be weighted          in the    manner    set   out    in    that    Article.     The
manner   set   out   in   that   Article.    The   Chairman shall not vote.
Chairman shall not vote.
                                                   The    Commission      shall      implement       the
The Commission shall adopt the measures            envisaged     measures     when     they   are     in
envisaged if they are in accordance with           conformity     with     the    opinion     of     the
the opinion of the Committee.                      Committee.
                                                                                                         5"
 ---pagebreak---                                                      - 3 -
Common position of the Council                          Reexamined proposal of the Commission
 If  the measures      envisaged      are    not  in    When the envisaged measures do not confirm
accordance     with     the    opinion      of   the    with the opinion of the Committee, or in
committee,      or     if     no     opinion      is    the absence of an opinion, the Commission
delivered, the Commission shall, without                shall without delay submit to the Council
delay, submit to the Council a proposal                 a   proposal   relating   to   the measures    to
relating    to the measures         to be taken.        take. The Council shall act according to
The   Council    shall    act   by    a qualified       qualified majority voting.
major ity.
                                                         If at the end of the period which will be
 If the Council does not act within three               set   in the case of each decision         to be
months    of    the    referral       to    it   the    taken by the Council as a result of this
Commission     shall    adopte      the    measures     paragraph, a period which must not exceed
adopted, unless the Council has decided                 three months     from  the day on which      the
against    those     meausres      by    a    simple    Council was informed, the Council has not
major ity.                                              acted, the Commission shall       implement the
                                                        proposed measures.
                                    Articles 10 to 11(4) unchanged
Article 11                                              Article 11
5. 50% for property leasing transactions                5. The Member States may apply a weighting
concluded within ten years of the date                  of   50%   in  respect   of   property   leasing
laid    down     in    Article        12(1)      and    transactions concluded within ten years of
concerning     assets      for     business      use    the date    laid down    in Article 12(1) and
situated    in   the   country      of   the    head    concerning     assets     for    business    use
office     and     governed       by     statutory      situated in the country of the head office
provisions    whereby     the    lessor     retains     and    governed    by   statutory    provisions
full ownership of the rented asset until                whereby the lessor retains full ownership
the   tenant    exercises       his    option     to   of    the   rented   asset   until   the   tenant
purchase.                                              exercises his option to purchase.
                                     Articles 12 and 13: unchanged
                                                                                                          /.;
 ---pagebreak---    Amendments proposed
by the European Parliament
       but rejected
     by the Commission
                           f
 ---pagebreak---        Solvency ratio for credit institutions
       Doc. A 3-45/89
                                         DECISION
                             (COOPERATION PROCEDURE : second reading)
 on the common position of the Council with a view to the adoption of a
 directive on a solvency ratio for credit institutions
 The European Parliament,
       having regard to the common position of the Council (Doc. C 3-17/89 - SYN
       133)
       having regard 'to the relevant provisions of the EEC Treaty and its Rules of
       Procedure,
 1. Has amended the common position as set out below;
 2. Has instructed its President to forward this decision to the Council and
       Commission.
 Common position of the Council             Amendments adopted by Parliament
                                                 (Amendment No. 1)
                                                Fourteenth recital
Whereas technical modification to the           Whereas technical modification to
detailed rules contained in this                the detailed rules contained in this
directive may from time to time be              directive may from time to time be
necessary         to   respond     to   new     necessary     to   respond   to    new
developments in the banking sector;             developments in the banking sector;
whereas        the    Commission      shall     whereas     the   Commission     shall
accordingly make such modifications             accordingly make such modifications
as are necessary, after consulting              as are necessary, being assisted by
the       Banking    Advisory   Committee,      a    committee    composed   of    the
within the limits of the implementing           representatives of the Member States
powers delegated tc the Commission by           and chaired by the representative
the provisions of the Treaty; whereas           of    the    Commission;     whereas
t.?-.-nt Committee     shall   act    as a      appropriate     measures   shall    be
 'Regulatory' Committee, according to           adopted in accordance with procedure
z'r.e rules of procedure, laid down in          II, variant (b) set out in Article 2
article 2, procedure III, variant (a)           of Council Decision 87/373/EEC of
of Council Decision 87/373/EEC of               13 July 1987;
13 July 1987 laying down procedures
for the exercise of implementing
powers conferred on the Commission;
                                                (Amendment No. 2)
                                                Article 9(2), third,      fourth   and
                                                fifth subparagraphs
                                        - 1 -                             PL  135.802
                                                                                    i
 ---pagebreak--- The     Commission      shall   adopt   the     The Commission shall adopt measures
measures envisaged if they are in               which     shall   be    immediately
accordance with the opinion of the              applicable. However, where they do
committee.                                      not conform with the opinion of the
                                                Committee,   the   Commission   shall
I_i_ the measures envisaged are not in          without delay communicate them to
accordance with the opinion of the              the Council.
committee, or if no opinion               is
delivered,      the    Commission    shall,     In this event the Commission shall
without delay, submit to the Council            defer application of the measures ic
a proposal concerning the measures to           has adopted for a time-limit which
be taken. The Council shall act by a           may in no case exceed three months
qualified majority.                             from the date of the communication.
If the Council does not act within             The Council, acting by a gualified
three months of the referral to it             majority, may     take   a   different
the     Commission     shall    adopt   the    decision within the time-limit laid
measures proposed, unless the Council          down in the preceding paragraph.
has decided against those measures by
a simply majority.
                                                (Amendment No. 3)
                                               Article 11(4)
    By      d e r o g a t i o n       from     4.     By     derogation         from
    Article 6(l)(c)(l),              until            Article 6(l)(c)(l),       until
    1 January 1996 Germany, Denmark                   1 January 2001 Member States
    and Greece may apply a weighting                  may apply a weighting of 50%
    of    50% to     assets     which   are           to assets which are entirely
    entirely and completely secured to                and completely secured to the
    the satisfaction of the competent                 satisfaction of the competent
    authorities          concerned,      by           authorities    concerned,    by
    mortgages on completed residential                mortgages on offices or on
    property, on offices or on multi-                 multi-purpose      commercial
    purpose     commercial       premises,            premises, situation within the
    situation within the territories                  territory   of   the   European
    of those three Member States,                     Community, provided that the
    provided that the sum borrowed                    sum borrowed does not exceed
    does not exceed 60% of the value                  60% of the value of the
    of   the property       in question,              property      in    question,
    calculated      on    the    basis   of           calculated on the basis of
    rigorous assessment criteria laid                 rigorous assessment criteria
    dcwn in statutory or regulatory                   laid down in statutory or
    provisions.                                       regulatory    provisions,   and
                                                      provided that the holder of
                                                      the mortgage ranks before any
                                                      other creditor in respect of
                                                      the mortgaged property.
                                           - 2 -                           PE 135.802
                                                                                   3
 ---pagebreak---  ---pagebreak---                                                                       ISSN 0254-1475
                                                               COM(89) 578 final
                                                       DOCUMENTS
EN                                                                               18
                                 Catalogue number : CB-CO-89-533-EN-C
                                                             ISBN 92-77-54954-8
Office for Official Publications of the European Communities
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