Brussels, 01/04/2015 (Agence Europe) - On Tuesday 31 March, member states' experts examined the latest version of the approach submitted by the Latvian Presidency to find a reasonable balance at the Council on the controversial question of reform of the structure of the banking sector.
Initially, three levels had been identified (see EUROPE 11241), but the Latvian compromise has dropped one of them, taking into account that not all the banks covered by the regulation are of equal systemic importance and therefore will not all need to hive off their investment arm in order to comply with the regulation's objectives, explained Latvian sources. The Council Presidency worked to incorporate into its compromise deal the “good aspects” of legislative reforms that have taken place at national level (in Germany, Belgium, France and the United Kingdom), such as the need to carry out a “detailed assessment of a banking group's trading activities using both quantitative and qualitative criteria”. Nevertheless, the systems introduced in individual member states will not be wholly applicable to the whole of the EU, says the Latvian Presidency and it therefore aims to draw up a mechanism that strikes “a balance between legal certainty, proportionality and discretion for supervisory bodies to adjust to what is unique about each big banking group”.
At the European Parliament on Tuesday, the chair of the Single Supervisory Board at the ECB, Danièle Nouy, said that supervisors had to have room for manoeuvre to hive off the riskiest trading activities from high street banking (see EUROPE 11286).
Agreement hoped for at Council level in June. Arguing that the 7 May general elections in the United Kingdom will impact on the speed of negotiations, the Latvian Presidency feels that broad agreement at the Ecofin Council on the bank reform plans would be possible in June.
At the European Parliament, the formal date for a vote at the economic and monetary affairs committee on the draft report by Gunnar Hökmark (EPP, Sweden) has not yet been set. The negotiations will be ongoing in April between the rapporteurs of the various political groups to ensure that the MEPs are able to decide on a negotiating mandate before the summer break at the latest. (Mathieu Bion)