Debate: Amending Directive //EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks - Amending Regulation  No  as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor
Date: WEDNESDAY, 24 APRIL 2024
Speaker: Mairead McGuinness
Language: EN

I want to thank the rapporteur, Mr Fernandez, who has just resumed his seat, and the many colleagues in the Chamber who have contributed to getting this agreement in place. It is a significant milestone that we have political agreement on the banking package, and it is a huge achievement for the European Union. Just to recall that this allows for the implementation of the final elements of the Basel III reforms, completing the banking reforms which started after the 2018 global financial crisis. I think many of us – I hope all of us – remember the immense difficulties caused by that crisis. We should never forget the horrific implications for our countries, our society and our citizens. Some have never fully recovered. Our economies came close to collapse. A number of financial institutions failed or had to be bailed out by taxpayers. Many people lost their homes and their livelihoods. The Basel reforms are about fixing the problems in the banking system that contributed to that catastrophe. Now to the specifics of what we are discussing today. The main goal in finalising the implementation of Basel III is to restore confidence in risk-based capital requirements. In other words, our rules should make sure that banks hold capital in proportion to the risks of their activities. We stayed faithful to the Basel agreement, showing our commitment to international regulatory cooperation. We did use the flexibility within Basel to make some targeted adjustments to reflect the characteristics of the EU economy and banking sector. EU banks are especially important for lending to corporates and providing mortgages to homeowners, so there are transitional arrangements for activities like these. We’ve also avoided unnecessary burdens for small banks. The EU applies these rules to all of our 4 500 banks, and not just to the large and internationally active banks. We have ensured that there is no significant increase in overall capital requirements. So the result of our work is a balanced compromise, which keeps our banks resilient and competitive. This banking package will make our banks more resilient to future economic shocks and ensure banks can continue to fund the EU economy, including in times of crisis. So, again, my appreciation and thanks to Parliament for your very significant contribution to this ambitious outcome. Parliament’s negotiating team – in particular rapporteur Jonás Fernández and the shadow rapporteurs – deserve, and have, our appreciation. I do recall seeing Othmar Karas in the Chamber. Ah! ‘He’s behind you’, as they say at the pantomime. Just a word for Othmar, if I may – and I’m sure colleagues will not be upset if I mention Othmar, as a colleague, a friend, and a very significant parliamentarian, who has made a huge contribution to banking regulation over the last 25 years in this House. I think your work is hugely appreciated and, indeed, the way you go about your work is, I think, an example for new Members. We all together have done our work, and I think now is not the time to rest. We have to implement, and this is the next stage of that process. The Commission will also take the co-legislators’ mandate to review the single market for banking very seriously. So to that end, I want to make the following very clear statement. The Commission undertakes to carry out a fair and balanced assessment of the state of the single market for banking, taking into consideration, in particular, prudential requirements, including the level of application of the output floor, and the provisions on the waiver of capital and liquidity requirements. It will carry out this mandate based on inputs from the European Banking Authority, and from the European Central Bank and the Single Supervisory Mechanism, and will consult with interested parties to ensure that the various perspectives are appropriately considered. The Commission will, where appropriate, present a legislative proposal based on the report. So I think it is appropriate, as this Parliament concludes its five-year mandate, that we are debating financial regulation, because this is not a dry, disconnected debate about percentages and risk-based. This is core to the wellbeing of our society and our economy. And I will recall the votes on EDIS and CMDI. I’ll mention them further in my concluding remarks. You have done a lot of work in this mandate to move the process of banking union, and indeed, I hope, capital markets union a step forward. I look forward to hearing your views.