Brussels, 19/01/2001 (Agence Europe) - The European Commission favourably welcomed the new proposals from the Basel Committee on the reform of the solvency ratio of banks. In a press release published on Wednesday, it asserts that it will "closely take into account" in the drafts of new legislative proposals at the European level, "while necessarily concentrating of certain points of detail". "The European legislation must take into account the specificities of the European banking sector, which is notably characterised by a higher number of small establishments playing a crucial role in the financing of small and medium-sized enterprises", she explained, while announcing the launching of an new round of consultations with the interested parties towards the end of the month of January.
The Commission has been working for two years for the revision of the European banking legislation, in view of instituting a new provision for adequate own funds which would apply to all of the credit establishments and investment companies with their headquarters in the European Union. Thus it is looking to "better calibrate the requirements of the own funds in relations to the real risks as well as inciting the establishments concerned to strengthen the quality of their risk management systems". "This work completes that of the Basel Committee (of which eight Member States are part of the EU: Germany, Belgium, France, Italy, Luxembourg, the Netherlands, the United Kingdom and Sweden), and the close ties that unite the Union to the Group of Ten have determined a permanent interaction between the two processes", commented the European Commission responsible for Financial Services, Frits Bolkenstein. "The new rules will have to take into account the diversity of banking cultures. They will also have to create a health, solid, disciplines and monitored banking systems,, but sufficiently flexible to enable the banks and other financial establishments to compete fairly and to react rapidly to the changes in their environment", he said. In the same spirit as Basle the Union will centre the new system on the minimum requirements for own funds, a prudential monitoring systems and an increased use of market discipline, foresees the Commission.