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Banking in the European Union

Latest business news and information covering the EU's banking sector.

EU Regulatory Framework for Financial Services: call for evidence 30 September 2015, 17:40 CET
The Commission is inviting all interested parties to provide feedback and empirical evidence on the benefits, unintended effects, consistency and coherence of the financial legislation adopted in response to the financial crisis.

Action Plan on building a Capital Markets Union 30 September 2015, 16:11 CET
The European Commission launched the Capital Markets Union Action Plan on 30 September to help build a true single market for capital across the 28 EU Member States.

EU roadmap for tackling the risks inherent in shadow banking 04 September 2013, 17:05 CET
The Commission has today adopted a communication on shadow banking and proposed new rules for money market funds (MMFs). The communication, a follow-up to last year's Green Paper on Shadow Banking, summarises the work undertaken so far by the Commission and sets out possible further actions in this important area. The first of these further actions - the proposed new rules for money market funds - is unveiled today and aims to ensure that MMFs can better withstand redemption pressure in stressed market conditions by enhancing their liquidity profile and stability.

Capital requirements directive revision - guide 20 July 2011, 17:54 CET
Banks have been at the centre of the financial crisis the global economy is facing since 2008. Lessons have been drawn from this and mistakes of the past should not repeat themselves. This is why the European Commission has brought forward today proposals to change the behaviour of the 8000 banks that operate in Europe The overarching goal of this proposal is to strengthen the resilience of the EU banking sector while ensuring that banks continue to finance economic activity and growth.

Access to a basic payment account - guide 19 July 2011, 00:28 CET
According to recent studies, around 30 million consumers over the age of 18 in the European Union do not have a bank account. Out of these 30 million 'unbanked' citizens, it is estimated that between 6 and 7 million do not have a bank account because they have been denied access to one. These individuals cannot currently benefit fully from the Single Market. Today's Recommendation from the European Commission on access to a basic payment account will promote financial and social inclusion for consumers across Europe. The Commission invites Member States to ensure that such accounts become available at a reasonable charge to consumers, regardless of their country of residence in the EU or their financial situation. It will assess the situation in one year's time and propose any further measures as necessary, including legislative measures.

Committee of European Banking Supervisors (CEBS) 22 July 2010, 13:19 CET
The Committee of European Banking Supervisors (CEBS) gives advice to the European Commission on policy and regulatory issues related to banking supervision. It also promotes cooperation and convergence of supervisory practice across the European Union, especially through the development of guidelines and recommendations, addressed both to credit institutions and national supervisors. In addition, CEBS contributes to the consistent implementation of these guidelines and recommendations through trainings etc and promotes a common application of Community legislation through peer reviews and other tools. Since 2009, CEBS has been tasked to provide regular bank sector analysis and perform assessments on risks, vulnerabilities, etc on the banking sector and reports its outcomes periodically to the EU political institutions.

Euro-MPs call for more EU powers in the financial sector 22 June 2010, 23:24 CET
The European Parliament's Economic Affairs Committee passed today two resolutions, calling for legislation on remuneration in the financial service sector and on the management of cross-border banking crises.

EU Court upholds Commission decision on State aid for banks 10 March 2010, 00:48 CET
The EU General Court has upheld the Commission's decision which stated that the two investment funds that Landesbank Hessen-Thüringen received in1998 from the state were made available to underpin its competitive business, and hence could not be classified as State aid.

Capital Requirements Directive ('CRD IV') - public consultation 28 February 2010, 00:19 CET
The European Commission has launched a public consultation on further possible changes to the Capital Requirements Directive (CRD) aimed at strengthening the resilience of the banking sector and the financial system as a whole. The proposed changes, known as 'CRD IV', following two earlier Commission proposals amending the CRD, relate to seven specific policy areas, most of which reflect commitments made by G20 leaders at summits in London and Pittsburgh during 2009. These commitments included building high-quality capital, strengthening risk coverage, mitigating pro-cyclicality and discouraging leverage, as well as strengthening liquidity risk requirements and forward-looking provisioning for credit losses. All interested stakeholders are invited to reply to the consultation by 16 April 2010, indicating what impact the potential changes would have on their activities. The results will feed into a legislative proposal scheduled for the second half of 2010.

Commission decisions on KBC, ING and Lloyds - briefing 19 November 2009, 12:02 CET
The European Commission on 18 October approved the restructuring plan of Lloyds Banking Group, the ING restructuring plan and illiquid asset back-up facility, and the asset relief and restructuring package for KBC.

EU framework for Crisis Management in the Banking Sector - briefing 20 October 2009, 22:23 CET
The European Commission has adopted a Communication on an EU framework for crisis management in the banking sector. The purpose of the Communication is to consult as widely as possible on a broad range of issues aimed at safeguarding financial stability and the continuity of banking services in a cross border banking crisis. The Communication sets out questions on the tools that the Commission considers would be necessary for an EU crisis management framework. These tools range from “early intervention” action by banking supervisors aimed at correcting irregularities at banks, to bank resolution measures which involve the reorganisation of ailing banks, , to insolvency frameworks under which failed banks are wound up. The Commission’s consultation will last for three months, and will be followed by a public hearing to present the results and set out the Commission’s intentions.

European System of Financial Supervisors (ESFS) - briefing 24 September 2009, 11:19 CET
The European Commission has adopted a package of draft legislation to strengthen the supervision of the financial sector in Europe. The aim of these enhanced cooperative arrangements is to sustainably reinforce financial stability throughout the EU; to ensure that the same basic technical rules are applied and enforced consistently; to identify risks in the system at an early stage; and to be able to act together far more effectively in emergency situations and in resolving disagreements among supervisors. The legislation will create a new European Systemic Risk Board (ESRB) to detect risks to the financial system as a whole, and it will also set up a European System of Financial Supervisors (ESFS), composed of national supervisors and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors.

Financial Services Supervision and Committee Architecture 23 September 2009, 11:37 CET
Currently, three committees exist at the EU level in the financial services sector, with advisory powers, the Committee of European Banking Supervisors (CEBS), the Committee of European Insurance and Occupational Pensions Committee (CEIOPS) and the Committee of European Securities Regulators (CESR). These are often known as the “Lamfalussy level 3 Committees” because of the role which they play in the EU framework for financial services legislation, created following a report by a group chaired by Alexandre Lamfalussy.

EC proposals to strengthen financial supervision in Europe - briefing 23 September 2009, 11:38 CET
The European Commission has adopted a package of draft legislation to significantly strengthen the supervision of the financial sector in Europe. The aim of these enhanced cooperative arrangements is to sustainably reinforce financial stability throughout the EU; to ensure that the same basic technical rules are applied and enforced consistently; to identify risks in the system at an early stage; and to be able to act together far more effectively in emergency situations and in resolving disagreements among supervisors. The legislation will create a new European Systemic Risk Board (ESRB) to detect risks to the financial system as a whole with a critical function to issue early risk warnings to be rapidly acted on. It will also set up a European System of Financial Supervisors (ESFS), composed of national supervisors and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors.

Retail Financial Services Report - Bank fees, pre-contractual information, advice and switching 22 September 2009, 17:15 CET
Retail Financial Services Report - Bank fees, pre-contractual information, advice and switching - SEC(2009) 1251 final - The Consumer Markets Scoreboard is the main market monitoring instrument for the consumer policy area. After the publication of the first Consumer Markets Scoreboard early in 2008, which identified retail financial services as a sector in need of monitoring, the Commission selected three areas where consumers are faced with a significant number of problems. A new Commission Staff Working Document analyses the various retail financial services issues which were singled out for examination: pre-contractual information and the related issue of advice, the level and transparency of bank fees and bank account switching.

Commission Report on bank fee charges - briefing 22 September 2009, 17:17 CET
There are widespread problems with the way banks inform and advise their customers according to a European Commission report on retail financial service published today. Specific problems include information which in many cases is difficult to understand, opaque bank fees, problems with advice and low levels of switching. The report describes the price structures of current accounts as "very opaque making it almost impossible for consumers to know how much they are paying and to compare different offers." For 66% of banks surveyed, bank fees were so unclear that experts compiling the report needed additional explanatory contacts with the bank to find the real costs of an account. Austria, France, Italy and Spain score poorly on transparency and are among the most expensive countries for banking accounts. The EU market is fragmented depriving consumers of the advantage of an EU Internal Market. Only 9% of EU consumers switched current accounts for the two years 2007-2008.

Review of national aid schemes introduced during the financial crisis 10 August 2009, 18:14 CET
The European Commission's Directorate-General for Competition has issued a review of the aid schemes introduced by EU Member States and approved by the Commission during the financial crisis. In the review, the DG for Competition addresses the effectiveness of the schemes implemented to date and analyses issues raised by Member States in this context. The review furthermore consolidates the requirements common to all approved guarantee and recapitalisation schemes, in order to provide additional transparency on the general standard for all such schemes. Finally, the review gives an overview per Member State of the public resources involved as a percentage of GDP.

EC guidelines on restructuring aid to banks - briefing 23 July 2009, 16:56 CET
The European Commission has agreed a Communication explaining its approach to assessing restructuring aid given by Member States to banks. The approach is based on three fundamental principles: i) aided banks must be made viable in the long term without further state support, ii) aided banks and their owners must carry a fair burden of the restructuring costs and iii) measures must be taken to limit distortions of competition in the Single Market. The guidelines, which are in force until 31 December 2010, explain in particular how the Commission intends to apply these principles in the context of the current systemic financial crisis, with a view to contributing to the return to viability of the European banking sector.

Regulatory Capital 13 July 2009, 23:59 CET
European Commission website covering Regulatory Capital and the Capital Requirements Directive (CRD)

Further amendments to the Capital Requirements Directive - briefing 16 July 2009, 22:45 CET
The European Commission has adopted a proposal to further amend the Capital Requirements Directive. The proposed amendments address capital requirements for the trading book and re-securitisations, disclosure of securitisation exposures, and remuneration policies. They form part of the Commission's response to the financial crisis by strengthening the regulatory framework in those areas, which were relevant to the causes of the crisis.

Useful information 13 July 2009, 13:18 CET
Useful links and practical information on banking and credit institutions in the EU

Banking: Key EU directives 13 July 2009, 13:20 CET
Key banking legislation in force in the European Union

Banking policy in the EU 13 July 2009, 13:19 CET
Achieving an integrated market for banks and financial conglomerates is a core component of European policy in financial services sector.

Treatment of Toxic Assets in the European Community Banking Sector - briefing 26 February 2009, 17:01 CET
The European Commission has provided guidance on the treatment of asset relief measures by EU Member States. Impaired assets correspond to categories of assets on which banks are likely to incur losses (e.g. US sub-prime mortgage backed securities). The Commission considers that a common European approach is presently needed to deal with the treatment of impaired assets, to make sure that foreseeable losses are disclosed and properly handled and banks can use their capital to resume their normal function of lending to the economy instead of fearing they would need this capital to cushion against possible losses. The Commission's Communication outlines various methods to deal with impaired assets, notably through asset purchase (including bad bank scenarios) or asset insurance schemes. It explains the budgetary and regulatory implications of asset relief measures and presents details concerning the application of the State aid rules to such measures. In particular, the guidance provides methodologies concerning the valuation of the impaired assets, the necessary remuneration of the State for the asset relief and the procedural steps that will be followed as well as the criteria that will be used to evaluate the State aid given to the banks as a result.

EC guidance for the treatment of toxic assets in the EU banking sector 25 February 2009, 23:09 CET
The European Commission has provided guidance on the treatment of asset relief measures by EU Member States. Impaired or 'toxic' assets correspond to categories of assets on which banks are likely to incur losses (e.g. US sub-prime mortgage backed securities). The Commission considers that a common European approach is presently needed to deal with the treatment of impaired assets, to make sure that foreseeable losses are disclosed and properly handled and banks can use their capital to resume their normal function of lending to the economy instead of fearing they would need this capital to cushion against possible losses. The Commission's Communication outlines various methods to deal with impaired assets, notably through asset purchase (including bad bank scenarios) or asset insurance schemes. It explains the budgetary and regulatory implications of asset relief measures and presents details concerning the application of the State aid rules to such measures. In particular, the guidance provides methodologies concerning the valuation of the impaired assets, the necessary remuneration of the State for the asset relief and the procedural steps that will be followed as well as the criteria that will be used to evaluate the State aid given to the banks as a result.