European Parliament’s Committee on ECON Publishes Draft Reports on CRR II Regulation and CRD V Directive

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On December 1, 2017, Economic and Monetary Affairs (“ECON“) published its draft report on the proposed CRR II Regulation and its draft report on the proposed CRD V Directive.

The European Commission’s proposals for the CRR II Regulation and the CRD V Directive contain revisions to the Capital Requirements Regulation (Regulation 575/2013) (CRR) and the CRD IV Directive (2013/36/EU) respectively.

The draft reports contain proposed amendments to the CRR II Regulation and the CRD V Directive as well as explanatory statements by the rapporteur.

The amendments include:

  • Scope: the definition for a small, non-complex institution should be amended to include a relative component geared to the gross domestic product of a particular member state;
  • Global systemically important institutions (G-SIIs): the leverage quotas for G-SIIs should increase to 4%. Grandfathering provisions for the introduction of the total loss absorbing capacity standard for G-SIIs should be introduced in order to ensure that buffers for liabilities capable of being bailed –in are built up as quickly as possible;
  • Remuneration and transparency: large institutions should be obliged to set and disclose a figure for the salary of each individual board member representing a proportion of the median salary of the institutions’ employees; and
  • Lending to SMEs and infrastructure:  the support factor for investment in infrastructure should equally be applicable to lending to public enterprises. A set of criteria to govern the exclusion of certain institutions from the scope of the CRR should also be introduced to encourage the set up promotional banks.

The draft report on the proposed CRR II Regulation (PE613.409v02-00) (dated November 22, 2017) is available here and the draft report on the proposed CRD V Directive (PE613.410v01-00) (dated November 16, 2017) is available here.