On Tuesday 10 October, the committee on economic and monetary affairs of the Parliament adopted its position for negotiations with the Council of the EU on the proposed directive modifying the hierarchy of creditors to be called upon to contribute in the event of bank resolution, as laid down in the 'BRRD' directive (see EUROPE 11819).
In order to improve the protection of depositors, the MEPs support the introduction of a new category of assets made up of debt instruments classified as senior, but non-preferred. Under international prudential rules (TLAC), debt instruments in this new category may not be derivatives.
The MEPs also adopted a grandfathering regime aiming to take account of existing national legislation. Whilst France has already legislated to create this new category of assets, Germany has decided to convert existing assets to bring them into line with the TLAC standards.
“This proposal will improve the resilience of European banks and bring our legislation into line with new prudential international standards”, said Gunnar Hökmark (EPP, Sweden), Parliament's rapporteur, in a press release.
The draft 'Hökmark' report is “very close” to the position of the Council of the EU reached by the European finance ministers in mid-June, according to a parliamentary source (see EUROPE 11810). The source went on to say that a single negotiating session may be enough for an inter-institutional agreement to be reached.
Even so, the proposed compromises were modified up to the last minute in order to avoid any incompatibility with the TLAC standards. For instance, the amendments tabled by Pedro Silva Pereira (S&D, Portugal), which could have led to certain deposits being included in the category of securities benefiting from maximum protection, were among those rejected. (Original version in French by Mathieu Bion)