Economic and Monetary Affairs Committee (ECON)

ECON Draft Reports on Proposed BRRD II Directive and SRM II Regulation


On September 29, 2017, the European Parliament’s Economic and Monetary Affairs Committee (“ECON“) published two draft reports relating to the European Commission’s proposed revisions to the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD) and to the implementation in the EU of the Financial Stability Board’s total loss absorbing capacity (TLAC) standard (BRRD II):

  1. Draft report on the Commission’s proposal for a Regulation to amend the Single Resolution Mechanism (Regulation 806/2014) (proposed SRM II Regulation).
  2. Draft report on the Commission’s proposal for a Directive to amend the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD) (proposed BRRD II Directive).

Each of the draft reports contains a Parliament legislative resolution on the proposed Regulation and Directive (as applicable), which suggests amendments to the European Commission’s original legislative proposal. They also each contain an explanatory statement by the rapporteur Gunnar Hökmark.

Next, ECON will vote to finalize the draft reports before they are considered by the Parliament.

Alterations related to insolvency rankings are necessary to integrate the TLAC standard requirements into the BRRD. In June 2017, ECON published a draft report on the Commission’s proposed Directive amending the BRRD as regards the ranking of unsecured debt instruments in insolvency hierarchy (the proposed Insolvency Hierarchy Directive).

As part of a package of banking reforms, the Commission published the proposed Directive in November 2016. The EU institutions have agreed to fast-track this proposal. The Council of the EU agreed to its general approach on the proposed Directive in June 2017 and, at that time, stated that it hoped the Parliament would be able to start negotiating by the end of 2017.

European Parliament Publishes Report on Fifth Money Laundering Directive Proposal


On March 9, 2017, the European Parliament published a report on the Fifth Money Laundering Directive (MLD5), this being the same report adopted by the Parliament’s Economic and Monetary Affairs Committee (ECON), as well as Parliament’s Civil Liberties, Justice and Home Affairs Committee (LIBE).

The report focuses on draft EP legislation resolutions and also contains opinions from the Committee on Legal Affairs (JURI), Development (DEVE) and International Trade (INTA).

Following publication of the report, the EP must now permit MEPs to start discussions with the European Commission and the Council to begin the process of amending and potentially implementing the directive so that it can be integrated by Member States.

Econ Vote on Resolution on Basel III Revisions


On November 10, 2016, the European Parliament published a press release on a vote taken by its Committee on Economic and Monetary Affairs (“ECON“) in relation to revisions to Basel III, which are currently under consideration by the Basel Committee on Banking Supervision (“BCBS“).

The text of the resolution has not been published, yet the release states that it calls on the European Central Bank (“ECB”), the European Commission (“EC”) and the EBA to engage in the BCBS’s work and report to the ECON on their progress. Furthermore, the press release states that the revisions should:

  • strengthen the overall financial provision of European banks but should not significantly increase overall capital requirements;
  • respect the principle of proportionality and the important role played by banks in financing the European economy; and
  • consider and mitigate the differences between jurisdictions and, at the same time, avoid penalizing the EU banking model.

The resolution will be considered by the European Parliament in its plenary session between November 21, 2016 and November 24, 2016.

The package of reforms to Basel III is expected by the end of 2016 and will cover issues such as internal ratings-based (“IRB“) approaches and operational risk as well as the standardized approach for credit risk.

ECON Adopts Resolution on CMU

On June 16, 2015, the European Parliament published a press release announcing that its Economic and Monetary Affairs Committee (ECON) has adopted a resolution on the capital markets union (CMU).

The adopted resolution has not yet been published, although the press release highlights:

  • ECON wants to see a balanced approach towards the CMU, with non-bank sources of finance being developed.
  • The need for effective cross-border insolvency rules needs to be addressed.
  • Possible changes and additions to the existing regulatory regime should aim at removing entry barriers for small and medium-sized enterprises (SMEs).