Brussels, 09/09/2014 (Agence Europe) - Negotiations between the European Parliament and the European Commission on the delegated acts which will lay down the details of how to calculate the banks' contributions to the resolution funds continued on Monday 8 September.
The Commission was supposed to present two draft implementing measures in September, one for the banks' contributions to the national resolution funds (under the BRRD directive) and the other for the contributions of the eurozone banks to the single resolution mechanism (under Regulation 806/2014, single resolution). Given the considerable pressure brought to bear by the MEPs, the member states and the industry, it has chosen instead to give itself more time - until the beginning of October - to fine-tune the texts.
On Monday, 14 MEPs on the committee on economic and monetary affairs from the EPP, S&D and Greens/EFA Groups - including six German MEPs - wrote to Commissioner for the Internal Market Michel Barnier to express their “serious reservations” on certain key aspects of the texts currently being put together (see EUROPE 11128). “Globally, the proposal is unbalanced: the banks which take the most risks should pay the most, irrespective of where they are located”, Sven Giegold (Greens/EFA, Germany) told EUROPE.
Stressing the principle of “proportionality”, these MEPs argue that it is vital that the risk factor, which will increase or decrease the base contribution (related to size) of a bank to the resolution fund, better reflect the risk profiles of the financial institutions. Amongst other things, they feel that it is wrong that the contribution of a high-risk bank will be limited to 150% of its base contribution. They go on to refer to the American FDIC rules which, according to the Commission itself, would apply a risk multiplying factor capped at 400%.
The MEPs agree with the Commission that intra-group liabilities should be excluded from the contribution calculation formula. However, if these liabilities could be used to reduce the base contribution under certain conditions, they argue that this rule would need to be applied in a non-discriminatory way to “all similar structures”. This has been interpreted by one expert as calling for the institutional protection schemes (IPS) linking certain banks (for instance Landensbanken and Sparkassen in Germany) to offer the same advantages as those linking large private banking groups. This expert criticises the “ideological stance” of the German MEPs, which seems to be that this banking model should not have to contribute to the resolution funds at all.
The 14 signatory MEPs also feel that it is essential to guarantee that the contributions to the SRF are not tax-deductible. In France, banks will be able to offset their contributions, but not in Germany, the expert explained, adding that it will not in any case be possible to deal with the issue in the framework of the drafting of the delegated acts.
The signatory MEPs are: Burkhard Balz (EPP, Germany), Udo Bullmann (S&D, Germany), Sven Giegold (Greens/EFA, Germany), Gunnar Hökmark (EPP, Sweden), Danuta Hübner (EPP, Poland), Philippe Lamberts (Greens/EFA, Belgium), Olle Ludvigsson (S&D, Sweden), Siegfried Muresan (EPP, Romania), Ludek Niedermayer (EPP, Czech Republic), Dariusz Rosati (EPP, Poland), Andreas Schwab (EPP, Germany), Peter Simon (S&D, Germany), Jakob von Weizsäcker (S&D, Germany) and Pablo Zalba Bidegain (EPP, Spain).
Lack of data. It also emerges from these discussions that the Commission is still not in a position to make its decision on these ultra-sensitive texts on the basis of exhaustive data, despite repeated requests by Commissioner Barnier. The Netherlands has not supplied any data and those submitted by France are not completely usable. (MB)