48 Amendments of Molly SCOTT CATO related to 2017/2124(INI)
Amendment 85 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Gives a positive assessment of the monetary policy pursued by the ECB in the period 2012-2016 in terms of its contribution to economic recovery by preventing deflation, preserving favourable financing conditionsAcknowledges the ECB’s contribution in the period 2012-2016 to economic recovery by preventing deflation, improving financing conditions, particularly in the periphery, and maintaining financial stability and the proper functioning of the payment systems;
Amendment 88 #
Motion for a resolution
Paragraph 2 a (new)
Paragraph 2 a (new)
2 a. Points out that under normal circumstances monetary policy is, in principle, supposed to involve unbiased and unsystematic distributional effects in the short to medium term while fostering price stability in the longer term;notes however that under the current non- conventional policy regime, distributional consequences may clearly arise in the short-term while the long-term effects of such unconventional policies areas yet unknown and subject to controversy within the academic and policy making spheres;
Amendment 93 #
Motion for a resolution
Paragraph 2 b (new)
Paragraph 2 b (new)
2 b. Warns that prolonged non- conventional monetary policy actions may have significant distributional effects between the wealthy and poor, young and old, and also between regions with different financial structures;urges and suggests the ECB to monitor comprehensively in its next annual report the side effects of its monetary policy measures and its impact on inequality;
Amendment 95 #
Motion for a resolution
Paragraph 2 c (new)
Paragraph 2 c (new)
2 c. Emphasizes that the ECB started a new series of four targeted longer-term refinancing operations (TLTRO II) in June 2016;points out that the incentive structure of the programme has changed in comparison with the original TLTRO as several banks have been able to borrow at negative rates even if they do not increase their net lending to the real economy;
Amendment 96 #
Motion for a resolution
Paragraph 2 d (new)
Paragraph 2 d (new)
2 d. Is concerned by the fact that by offering liquidity at negative rates, but eliminating the requirements for banks to return the funds when they do not achieve their lending benchmark, the ECB has therefore weakened the link between the provision of central bank liquidity and lending to the real economy that was at the centre of the TLTRO concept;
Amendment 97 #
Motion for a resolution
Paragraph 2 e (new)
Paragraph 2 e (new)
2 e. Is concerned that Euro-area banks didn’t use the advantageous environment created by the ECB to strengthen their capital bases but, according to the Bank for International Settlements, to pay substantial dividends sometimes exceeding the level of retained earnings;
Amendment 98 #
Motion for a resolution
Paragraph 2 f (new)
Paragraph 2 f (new)
2 f. Points out that, while the effects on the real economy have been limited, banks have been able to access funding at virtually no or very low cost which has directly subsidised their balance sheets;deplores the fact that the size of this subsidy, despite representing a clear fiscal spill-over effect of monetary policy, is not monitored and published and that it is free from strict conditionality in terms of whether or how it is invested;insists that any extraordinary measures of this kind should be accompanied by measures to mitigate distortions to markets and the economy;
Amendment 99 #
Motion for a resolution
Paragraph 2 g (new)
Paragraph 2 g (new)
2 g. Underlines that a prolonged period of ultra-low (negative) interest rates creates potential risks for the insurance and pension sector, in particular for defined benefits schemes as recently highlighted by an EIOPA stress test;
Amendment 100 #
Motion for a resolution
Paragraph 2 h (new)
Paragraph 2 h (new)
2 h. Remains concerned by the still significant levels of non-marketable assets and asset-backed securities put forward as collateral to the eurosystem in the framework of its refinancing operations;reiterates its request to the ECB to provide information on which central banks have accepted such securities as well as to disclose valuation methods regarding such assets;underlines that such disclosure would be beneficial for the purpose of parliamentary scrutiny of supervisory tasks conferred to the ECB;
Amendment 101 #
Motion for a resolution
Paragraph 2 i (new)
Paragraph 2 i (new)
2 i. Notes with concern that TARGET 2 imbalances are rising in the euro area again despite a narrowing in trade imbalances indicating continued capital outflows from the euro area periphery;
Amendment 116 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Is concerned that the ECB will likely not reach its inflation target for at least six consecutive years and will remain below the medium-term target level of 2 % until at least 2020 despite pursuing a very accommodative monetary policy, which indicates that the economy is noturo area economy in aggregate is still operating atwell below full capacity;
Amendment 124 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Acknowledges that without the ECB’s policy package, inflation would be almomight be at least 0.5 % lower on average than the rate currently projected for the years 2016- 2019;
Amendment 132 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Agrees with the ECBacknowledgement of the ECB’s President in the Jackson Hole meeting of 2016 that in order to reach the inflation target in a context of very low interest rates, supportive fiscal policies and socially balanced productivity- enhancing reforms are required;
Amendment 154 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. BelievesIs of the opinion that ongoing discussion on tapering in a context of a strong euro might be premature and that additional policy measures should be considerednot be excluded, if appropriate, in order to move closer and more rapidly towards the inflation objective, including an increase in monthly purchases, the inclusion of equity purchases in the APP and the extension of the TLTRO programme to householdclimate change related projects through zero-coupon perpetual or very long term loans;
Amendment 156 #
Motion for a resolution
Paragraph 7 a (new)
Paragraph 7 a (new)
7 a. Urges the ECB together with other relevant Union bodies and in the light of the requirement under TFEU 127.1 to consider the possibility of using its APP strategically, by encouraging in coordination with the EIB the development of safe and simple marketable asset classes, suitable for the Program, that are linked to the achievement of key EU targets particularly the transition to a sustainable and fair economy and to consider drawing up a range of green and social projects for which credit created through quantitative easing could be used as direct financing;
Amendment 161 #
Motion for a resolution
Paragraph 7 b (new)
Paragraph 7 b (new)
7 b. Asks the ECB to prepare in the framework of its next annual report research on the pro and the cons and the legal feasibility of different options regarding the channelling of newly created money towards sustainable investment while respecting the provisions of the Treaty;
Amendment 163 #
Motion for a resolution
Paragraph 7 c (new)
Paragraph 7 c (new)
7 c. Underlines that the need to cement confidence in what a debt or claim denominated in the domestic currency will be worth at some point in future is a prerequisite for efficient economic planning;points out that the result of nominal prices deviating from they where expected to be leads to unintended redistribution effects and the frustrated expectations on which prior economic decisions were based;hence points out that the way in which ECB defines in full discretion its target as an operational translation of its price stability mandate should take explicit account of the need to avoid or reduce to the maximum extent possible distributional effects;
Amendment 172 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Asks the ECB to consider complementing its price stability objective with nominal GDP growth targetingUnderlines that article 127 of the TFEU leaves a wide margin of discretion to the ECB to adopt an operational translation of its price stability mandate; asks the ECB to thoroughly explore the pro and cons of reviewing, in consistency with the Treaties, such operational translation of its price stability mandate as a ‘close but below to 2%’ target and assess, in particular, whether a price level or nominal GDP growth targeting might better achieve such price stability objective;
Amendment 177 #
Motion for a resolution
Paragraph 8 a (new)
Paragraph 8 a (new)
8 a. Calls in that respect for a revision of the ECB treaty mandate with a view to strengthening its democratic accountability and its strict separation with the EMU Single Supervisory Mechanism;underlines that the fundamental principle of 'no taxation or provision of public subsidies without representation' should be enshrined in such mandate and therefore that a permanent scrutiny mechanism should be established so as to ensure a strict separation between fiscal and monetary policy;hence preventing and correcting the provision of implicit subsidies by the monetary authority and ensuring that in the medium term the monetary policy does not entail distributive effects;
Amendment 179 #
Motion for a resolution
Paragraph 8 b (new)
Paragraph 8 b (new)
8 b. Calls, in the framework of a revision of the ECB Treaty based mandate, to reflect on the possibility to add explicitly to article 127 TFEU the objective of ensuring financial stability;
Amendment 187 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Recalls that, in accordance with Article 3 of its Statute, the ECB must support ‘the general economic policies of the Union’, including, as stated in Article 3 of the TEU, ‘the sustainable development of Europe based on balanced economic growth’; and ‘a high level of protection and improvement of the quality of the environment’;believes the ECB’s duty in that respect is even greater after the ratification of the Paris agreement on climate change which commits all EU institutions;
Amendment 198 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Highlights that according to the IMF’s April 2017 World Economic Outlook, the Eeurozone area output gap was - 1.2 % of the potential GDP in 2016, a gap which willis expected to remain negative until 2019; underlines that in the persistence of a negative output gap and a strong euro there is room for preserving an accommodative monetary policy;
Amendment 200 #
Motion for a resolution
Paragraph 11 a (new)
Paragraph 11 a (new)
11 a. Underlines that frontloaded fiscal consolidation in the euro area as a whole during a period of large output gap has not only had a severe impact on aggregate demand but has generated long lasting negative hysteresis effects, which have undermined the effectiveness of the monetary transmission mechanism despite the unprecedented policy measures implemented by the ECB;
Amendment 212 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Underlines the positive effect of the ECB monetary policy on growth, employment and the financing costs of several euro area Member States, non- financial companies and households;
Amendment 281 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Stresses that excessive current account surpluses in some Member States must be corrected through appropriate fiscaleconomic policies;
Amendment 334 #
Motion for a resolution
Paragraph 21
Paragraph 21
21. Acknowledges that the current policy of low interest rates has a positive effect on the level of non performing loans (NPLs); calls for a European strategy involving inter alia a secondary market for NPLs in order to alleviate the burden of NPLs in some Member States; notes that the banks recently bailed-out in Italy showed high NPL ratios and is concerned that one of these banks, although supervised by the ECB’s supervisory arm (SSM), have not been required to increase its persistent low NPL coverage ratio beforehand;
Amendment 360 #
Motion for a resolution
Paragraph 23
Paragraph 23
23. Calls the ECB’s attention to the need for the sufficiently wide coverage and methodological pertinence and robustness of recent stress tests vis-à-vis the resolution or liquidation of certain banks;
Amendment 362 #
Motion for a resolution
Paragraph 23 a (new)
Paragraph 23 a (new)
23 a. Stresses that the ECB's supervisory role (SSM), its responsibility for systemic stability (ESRB) and its monetary policy function should not be confused and should not generate any conflict of interest in the execution of its principal functions;further stresses the importance of exploring future institutional independence of these three functions with a democratically accountable mechanism for resolving conflicts between them;points out that one source of such potential conflict of interest arises with the fact that recent stress tests, to which the SSM as the supervisory arm of the ECB participates, fail to integrate adverse scenarios of persistently low interest and inflation rates:scenarios which in practice challenge the future effectiveness of monetary policy measures;
Amendment 364 #
Motion for a resolution
Paragraph 23 b (new)
Paragraph 23 b (new)
23 b. Notes that only a small number of SSM member states have activated or planned to activate general systemic risk buffers and a counter-cyclical capital buffer in 2017;notes that the ECB has so far not fully exercised its macroeconomic supervisory powers by fostering the adoption of macro-prudential supervisory instruments by national authorities;
Amendment 368 #
Motion for a resolution
Paragraph 23 c (new)
Paragraph 23 c (new)
23 c. Asks the Commission to come forward with proposals to improve macroprudential oversight and the policy tools available for mitigating the risks in shadow banks in light of the warning delivered by the ECB that the steady expansion over the last decade to 22 trillion EUR in assets of non-bank credit intermediation;underlines that further initiatives are needed to monitor and assess vulnerabilities in the growing shadow banking sector;
Amendment 370 #
Motion for a resolution
Paragraph 23 d (new)
Paragraph 23 d (new)
23 d. Supports the ECB's assessment that the current CRR/CRD IV package lacks certain measures which could also effectively address specific types of systemic risk - such as (i) various asset- side measures including the application of limits to loan-to-value, loan-to income or debt service-to-income ratios, and (ii) the introduction of various exposure limits falling outside the current definition of large exposures;
Amendment 372 #
Motion for a resolution
Paragraph 23 e (new)
Paragraph 23 e (new)
23 e. Acknowledges that the ECB, as the competent authority for prudential supervision of significant institutions, has harmonised the exercise of the options and discretion which are granted to the supervisor in the CRD-CRR package, in accordance with its legal mandate;notes that other sources of regulatory divergence which are not within ECB’s remit remain, representing an obstacle to truly single supervision and potentially giving rise to systemic risks;supports the ECB’s view that the legislative review of the CRD-CRR package that is currently under way provides a good opportunity for the EU legislator to take steps towards further harmonisation;
Amendment 373 #
Motion for a resolution
Paragraph 23 f (new)
Paragraph 23 f (new)
23 f. Urges the Commission to examine the need for legislative proposals in this regard;notes that some of these measures could already be integrated in the context of the ongoing legislative work around the risk reduction package;
Amendment 374 #
Motion for a resolution
Paragraph 23 g (new)
Paragraph 23 g (new)
23 g. Underlines the still urgent need for deep structural reform of the euro area banking system as institutions remain 'too-big and interconnected to fail' and still enjoy unjustifiable public subsidies whilst representing a fundamental threat to the stability and efficient allocation of capital in the EU and international economies;emphasizes that an institution that is 'too-bigto fail' must be considered 'too dangerous to exist' and should therefore be downsized, simplified into manageable entities with defined economic functions to the service of the real economy;
Amendment 378 #
Motion for a resolution
Paragraph 25
Paragraph 25
25. Calls on the ECB to go one step further by ensuring full transparency on volumes and eligibility criteria in respect of the potential participation of SMEdisclosing the volumes of the purchases made under CSPP after a reasonable delay; emphasizes that in any case full transparency should be provided when the programme ends;
Amendment 392 #
Motion for a resolution
Paragraph 26
Paragraph 26
26. Encourages the ECB to take steps to align its CSPP purchases with the EU’s commitment to tackling climate change based on specific criteria that would facilitate future oriented and long-term investments and would take explicit account of the need to reduce the overall exposure of the economy to stranded carbon assets;
Amendment 397 #
Motion for a resolution
Paragraph 26 a (new)
Paragraph 26 a (new)
26 a. Calls for a recomposition of the ECB’s portfolio of securities held under the CSPP in order to reduce its holding of bonds linked with fossil fuel industries, and increase its holdings of bonds linked with sustainable investments, for example in the framework of a mutually non coercive coordination between the ECB and the European Fund for Strategic Investment (EFSI) and the European Investment Bank (EIB);
Amendment 447 #
Motion for a resolution
Paragraph 31
Paragraph 31
31. Agrees with the ECB on the importance of physical money as the only legal tender, and reminds all Eurozone countries that euro coins and banknotes must not be rejected in transactions;
Amendment 454 #
Motion for a resolution
Paragraph 32
Paragraph 32
32. Takes note of the ongoing discussion about a ‘central bank digital currency’ or ‘digital base money’ made available to a wide range of counterparties including households; encourages the Commission and the ECB to look into the potential of such schemes; asks the ECB to provide an impact assessment on the best way to design a euro area DBM in its next annual report on the issue, taking particular account of the Swedish Central Bank project-plan for an e-krona;
Amendment 501 #
Motion for a resolution
Paragraph 35
Paragraph 35
35. Believes that ECB profits from seigniorage revenue shouldwhich might be considered an EU budgetary resource, since they are directly linked to a fully developed, sui generis European policy;
Amendment 509 #
Motion for a resolution
Paragraph 36
Paragraph 36
36. Considers that the ECB’s growing number of responsibilities and tasks necessitaterequires greater ECB transparency and accountability towards the Parliament; stands ready to this effect to improve the setup of the monetary dialogue with the ECB president, if appropriate by means of an interinstitutional arrangement after assessing other examples such as those of the UK Parliament and the US Congress; recalls its request to the ECB to add a chapter or an annex in its annual report providing a paragraph-by-paragraph feedback to the Parliament's annual report on the European Central Bank Annual Report;
Amendment 532 #
Motion for a resolution
Paragraph 37 a (new)
Paragraph 37 a (new)
37 a. Underlines that the current ELA legal framework has often been justified on grounds that the provision of emergency liquidity assistance needed to remain within the remit of National Central Banks as the supervision of these banks used to be circumscribed within the Member States' competent authorities perimeter;is of the opinion that as banking supervision, of at least significant institutions, has been Europeanised such development points towards the need to reform and update the ELA legal framework and to adapt it to the new institutional setting;welcomes in that respect recent remarks from President Draghi hinting that such reforms would be required and are to be discussed;suggests the ECB to develop further policy options for such reform in its next annual report;
Amendment 535 #
Motion for a resolution
Paragraph 37 b (new)
Paragraph 37 b (new)
37 b. Points out, that as indicated by the ECB’s role in relation to liquidity provision to Greece in June 2015 and the leaked discussions of the ECB Council of Governors on the solvency of Cypriot banks, the concept of' 'insolvency' underpinning the provision of central bank liquidity to institutions in the Euro area lacks a sufficient level of clarity and legal certainty as the ECB has in the previous years alternatively referred to a static concept (whether a bank complies with minimum capital requirements at acertain point in time) or to a dynamic concept of solvency based on forward looking scenarios of stress tests for justifying the continuation or the limitation of ELA provision;underlines that such a lack of clarity needs to be addressed so as to guarantee legal certainty and foster financial stability;looks forward for further explanations from the ECB as to whether the recently revised ELA legal framework is expected to impact on the ECB understanding of the solvency concept;
Amendment 548 #
Motion for a resolution
Paragraph 38 a (new)
Paragraph 38 a (new)
38 a. Notes that the ECB is required by the SSM Regulation to conduct a public consultation only before adopting a regulation;acknowledges that the ECB has conducted public consultations inviting feedback also when adopting specific non-binding policy stances but encourages the ECB to conduct public consultations and disclose the results thereof in all fields of quasi-legislative measures;
Amendment 555 #
Motion for a resolution
Paragraph 38 b (new)
Paragraph 38 b (new)
38 b. Asks the ECB to overhaul its whistleblowing framework, adopting a clearly identifiable and public whistleblowing policy, which sets out in detail how reports will be investigated and includes the option to report anonymously;
Amendment 557 #
Motion for a resolution
Paragraph 38 c (new)
Paragraph 38 c (new)
38 c. Is of the opinion that a future interinstitutional arrangement aiming at ensuring an enhanced and more effective accountability of the ECB in a context in which it has largely expanded its missions since the beginning of the global financial crisis should at least contain the following elements: ·publication requirements on declarations of interests for Governing Council members; ·ensure that there are independent members in the Audit Committee as well as in the Ethics committee; ·adopt a new whistleblowing policy; ·set clear guidelines and transparency requirements and as appropriate limits on meetings with stakeholders; ·provide for specific requirements as regards the positions taken by the institution in the framework of financial assistance programmes as well as in multilateral fora such as the Basel committee;
Amendment 559 #
Motion for a resolution
Paragraph 38 d (new)
Paragraph 38 d (new)
38 d. Notes with concern the participation of ECB Board and Council of governors Members in instances and informal fora involving secretive discussions with the participation of prominent senior representatives of the private sector such as the 'group of thirty' where discussions are not in the public domain;is of the opinion that rules related to such involvement as well as regarding revolving door practices for all public institutions including the ECB should be significantly strengthened as potential conflicts of interest undermine the necessary trust, transparency and accountability of these institutions;
Amendment 561 #
Motion for a resolution
Paragraph 38 e (new)
Paragraph 38 e (new)
38 e. Believes that the on-going crisis has highlighted the need to diversify the theoretical background underlying the policy framework within central banks;requests the ECB to develop in its next annual report on what has been the impact of the crisis as regards the evolution of its theoretical framework;