[ParlTrack]

Proposal for a directive
Recital 48

(48) In order to ensure that credit institutions and investment firms have in place sound remuneration policies, it is appropriate to specify clear principles on governance and on the structure of remuneration policies. In particular, remuneration policies should be aligned with the risk appetite, values and long-term interests of the credit institution or investment firm. For this purpose, the assessment of the performance-based components of remuneration should be based on longer-term performance and take into account the current and future risks associated with that performance. In any event, in order to avoid excessive risk taking, the variable part of the remuneration should be limited to two times the fixed income. The fixed income should be set in a manner that in case of a claw back, it will still be sufficient to ensure a proper remuneration of the employee. In order to ensure that the design of remuneration policies is integrated in the risk management of the credit institution, the management body, in its supervisory function, should adopt and periodically review the remuneration policies in place. The provisions on remuneration reflect differences between different types of credit institutions and investment firms in a proportionate manner, according to their size, internal organisation and the nature, scope and complexity of their activities and, in particular, it could not be proportionate for certain types of investment firms to comply with all of the principles.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 88 – paragraph 2 – point f a (new)

(fa) the variable part of the remuneration does not exceed two times the fixed part.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 90 – paragraph 2 – subparagraph 1

EBA shall develop draft regulatory technical standards ~~with respect to~~to specify to the following: (a) the criteria to determine the appropriate ratios between fixed and the variable component of the total remuneration referred to in point (e) ~~and to specifying~~; (b) the classes of instruments that satisfy the conditions laid down point (j)(ii); (c) the qualitative and appropriate quantitative criteria to identify categories of staff whose professional activities have a material impact on the institutions risk profile as referred to in Article 88(2).

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 108 – paragraph 1 – point b a (new)

(ba) on the designation of a banking group or individual subsidiaries of a banking group as systemically important financial institutions at global, European or domestic level.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Chapter 4 – Section I – title

Capital Conservation ~~and~~, Countercyclical Capital Buffers and additional buffers for Systemically Important Financial Institutions

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 122 – paragraph 1 – point 2

(2) ‘Combined Buffer Requirement’ means the total Common Equity Tier 1 capital required to meet the requirement for the Capital Conservation Buffer extended by an institution specific Countercyclical Capital Buffer if ~~more~~the latter is greater than 0% of risk weighted assets plus the amount set for systemically important financial institutions;

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 122 – paragraph 1 – point 2 a (new)

(2a) 'Capital Buffer for systemically important financial institutions' means the additional Common Equity Tier 1 capital buffer required for individual institutions in accordance with [Article] which have been identified in accordance with Article 132a.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 122 – paragraph 1 – point 4 a (new)

(4a) 'Systemically important financial institution' means an institution which in case of failure or malfunction could lead to systemic risk at global or European level or within a Member State.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 122 – paragraph 1 – point 4 b (new)

(4b) 'Systemic risk' means a risk of disruption in the financial system with the potential to have serious negative consequences for the financial system and the real economy;

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Section III a (new)

Section IIIa Identification of Systemically Important Financial Institutions and Setting the Applicable Additional Systemic Buffer Requirement Article 132a Identification of systemically important financial institutions Competent authorities shall indicate systemically important financial institutions within their jurisdiction to EBA. In the case of banking groups or individual subsidiaries of a banking group this designation shall be based on a joint decision taken in accordance with Article 108 by the consolidating supervisor and the competent authorities of the subsidiaries concerned. Systemically important financial institutions may also be identified by the ESRB. This identification shall be based on quantitative and qualitative analysis on global, Union or domestic level, in particular taking into account their: (a) cross-jurisdictional activity within the internal market and with third countries; (b) size; (c) interconnectedness of the institution with the financial system ; (d) lack of Substitutability of the services or the financial infrastructure provided by the institution; (e) complexity. 2. EBA shall compile a list of systemically important financial institutions on global, Union and domestic level. The list of systemically important financial institutions shall be communicated to competent authorities, the ESRB and the Commission. 3. The ESRB shall review the criteria and process of identification of systemically important institutions in paragraphs 1 and 2. If warranted by the development of international standards or own findings, it shall issue recommendations to adapt the criteria and the process of identification of systemically important institutions. The Commission shall be empowered to adapt the criteria for the identification of systemically important financial institutions accordingly.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 132 b (new) (under Section IIIa)

Article 132b Requirement to Maintain a Systemic Buffer 1. Based on the criteria set out in Article 132a systemically important financial institutions at global or Union level al well as domestic systemically important financial institutions shall be assigned to one of five categories of systemic relevance with regard to their relevance for the European or an individual domestic financial market respectively. In the lowest category, systemic financial institutions shall be required to maintain an additional Core-Tier 1 capital buffer of 1,0% of total risk exposure amount calculated in accordance with Article 87(3) of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms], increasing by 0,5% with each of the following categories. 2. By way of derogation from paragraph 1, Member States may require financial institutions in the highest category of systemic relevance to maintain an additional Core-Tier 1 capital buffer of up to 10% of total risk exposure amount calculated in accordance with Article 87(3) of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms], if this is justified by exceptional circumstances such as the size of the banking group in relation to the economy of the home country or the degree of concentration in the domestic financial market. 3. Systemic institutions shall meet the requirement imposed by paragraph 1 with Common Equity Tier 1 capital, which shall be additional to any Common Equity Tier 1 capital maintained to meet the own funds requirement imposed by Article 87 of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms], the requirement to maintain a Capital Conservation Buffer under Article 123, the requirement to maintain an institution specific countercyclical capital buffer under Article 124 and any requirement imposed under Article 100. 4. The systemic buffer of banking groups which are identified as systemically important on global or European level shall be maintained at consolidated or subconsolidated level within the Single Market even if subsidiaries of that group have been identified as systemically relevant on the domestic level in one or several Member States. 5. The systemic buffer for entities which are identified as systemically relevant in only one Member State shall be maintained on single entity or subconsolidated level within that Member State. 6. By derogation from subparagraph 4, the systemic buffer may also be maintained on single entity or subconsolidated level within a Member State if the competent authority demonstrates to EBA that in a crisis situation, there would be substantive legal or practical barriers to the free flow of capital within the group. EBA shall inform and issue recommendations to the Commission to ensure effective cross- border crisis management and resolution within the Single Market. 5. Competent authorities may choose to disclose the systemic buffer required under paragraph 1. 6. Where a systemic institution fails to meet in full the requirement under paragraph 1, the competent authorities may restrict distributions in connection with Core Equity Tier 1 capital, restrict payments on Additional Tier 1 instruments and restrict variable remuneration and discretionary pension benefits. 7. Competent authorities shall require systemic institutions to prepare and submit a plan for their resolution in accordance with the guidelines provided for Global Systemically Important Banks by the Financial Stability Board.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 135 – point b a (new)

(ba) adaptation of the criteria for the identification of systemically important financial institutions as set out in Article 132a on the basis of recommendations by the ESRB.

2012/03/07
Committee: ECON

Othmar KARAS

Proposal for a directive
Article 138 – paragraph 5

5. A delegated act adopted pursuant to Article 135 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of 23 months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by 23 months at the initiative of the European Parliament or the Council.

2012/03/07
Committee: ECON

13 Amendments of Othmar KARAS related to 2011/0203(COD)

ParlTrack - 2011-2024