At the end of the ‘Economic and Financial Affairs Council’ meeting on Friday 12 December, the European Commissioner for Economy, Valdis Dombrovskis, indicated that the European Commission will only present its communication on the competitiveness of the banking sector “in the second half of next year”.
In its work, the European Commission will take account of the recommendations on simplifying European banking rules presented by the ECB Governing Council on Thursday. Some of the recommendations “may require legislative changes, if the decision is taken to follow them”, noted Mr Dombrovskis, when asked about the possibility of an ‘omnibus’ proposal to simplify the EU’s financial rules, as requested by the EU Council.
The ECB’s recommendations cover a number of areas: - simplify the design of prudential requirements and banks’ capital reserves (‘capital slacks’), by reducing the levels of reserves (releasable and non-releasable reserves) to two, and by reducing the regulatory framework governing the leverage ratio from four to two elements; - further simplify the prudential regime for small banks; - introduce a European governance mechanism to promote a holistic view of the overall level of own funds; - finalise the savings and investment union, including the completion of the banking union in the euro area; - simplify bank stress tests at EU level by rationalising their methodology and scope and making their results more useful for the banking system.
See the ECB’s recommendations: https://aeur.eu/f/jz3
The ECB also presented a report detailing its work agenda aimed at making European banking supervision more effective and risk-oriented.
See the report: https://aeur.eu/f/jz4 (Original version in French by Mathieu Bion)