Activities of Olle SCHMIDT related to 2011/0203(COD)

Proposal for a directive
Article 5 – paragraph 6 a (new)

6a. Member States shall designate one or more resolution authorities for overseeing and approving resolution plans as referenced in this Directive and Regulation (EU) No .../2012 of the European Parliament and of the Council of ... [on prudential requirements for credit institutions and investment firms]. They shall inform the Commission and EBA thereof, indicating any division of duties.

2012/03/07
Committee: ECON

Sharon BOWLES, Sylvie GOULARD, Olle SCHMIDT

Proposal for a directive
Article 8 a (new)

Article 8 a Recovery Plans 1. Member States shall require institutions and groups to prepare and maintain resolution plans at the individual and group level, and for these to be submitted to the resolution authorities for approval. For groups the resolution plans shall be submitted to the resolution authority for the consolidated level, and coordinated at the international level for international groups. 2. In accordance with Art 25 of EBA Regulation 1093/2010, EBA shall contribute to and participate actively in the development and coordination of effective and consistent recovery and resolution plans. EBA shall review any generalised conditions that Member States impose on recovery plans. In particular generalised requirements must respect the single market and not create negative effects in other Member States. 3. Competent authorities and EBA shall take account of resolution plans in the application, waiver or proportionality of discretionary measures referred to in this Directive and Regulation (EU) No .../2012 of the European Parliament and of the Council of ... [on prudential requirements for credit institutions and investment firms] . This applies in particular where there may be material or practical or legal impediments to transfer or liquidity of funds or repayment of liabilities or assets. 4. The resolution plans must include provisions, including contractual and legal agreements as necessary, to secure the resolution of institutions in a way that minimises adverse effects on financial stability or the need for public funding, deals with cross-border situations with branches and subsidiaries, including confidentiality and information sharing, and provides continuity of essential services. 5. EBA shall draft regulatory technical standards specifying the criteria to identify systemic institutions, systemic business model related clusters of institutions, the elements of recovery and resolution plans, the criteria that the competent authorities and resolution authorities shall take into account for the purpose of their assessment and the process they shall follow. Elements of recovery and resolution plans shall encompass: provisions allowing special arrangements at EU level for separation of insolvent cross- border financial conglomerates into viable units, enabling recovery of assets across borders in order to achieve an equitable result, treatment of similarly ranking creditors equally across the EU and that ranking can not be based solely on location.

2012/03/07
Committee: ECON

Proposal for a directive
Article 67 – paragraph 1 – point m a (new)

(ma) an institution has been found liable for a serious infringement of the national provisions adopted pursuant to Directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

2012/03/07
Committee: ECON

Proposal for a directive
Article 69 – paragraph 2

2. EBA shall issue guidelines addressed to competent authorities in accordance with Article 16 of Regulation (EU) No 1093/2010 on types of administrative measures and sanctions and level of administrative pecuniary sanctions.deleted

2012/03/07
Committee: ECON

Proposal for a directive
Article 75 – paragraph 5 – subparagraph 3

The risk management function shall be able to report directly to the management body in its supervisory function when necessary, independent from senior management. and to raise concerns and warn this body, where appropriate, in case of specific risk developments that affect or may affect the institution, without prejudice to the responsibilities of the management body in both its supervisory and/or managerial functions pursuant to this Directive and Regulation (EU) No .../2012 of the European Parliament and of the Council of ... [on prudential requirements for credit institutions and investment firms].

2012/03/07
Committee: ECON

Proposal for a directive
Article 86 – paragraph 2 – subparagraph 2 – point b

(b) periodically, and at least annually, assess the structure, size, composition and performance of the management body, and make recommendations to the management body in its supervisory function with regard to any changes;

2012/03/07
Committee: ECON

Proposal for a directive
Article 86 – paragraph 2 – subparagraph 2 – point c

(c) periodically, and at least annually, assess the knowledge, skills and experience of individual members of the management body and of the management body collectively, and report this to the management body in its supervisory function;

2012/03/07
Committee: ECON

Proposal for a directive
Article 86 – paragraph 2 – subparagraph 2 – point d

(d) periodically, and at least annually, review the policy of the management body for selection and appointment of senior management, ensuring there is a formal and transparent process in place, and make recommendations to the management body.

2012/03/07
Committee: ECON

Proposal for a directive
Article 87 – paragraph 1 – point a – introductory part

(a) Members of the management body shall commit sufficient time to perform their functions in the institution. ~~They shall not combine at the same time more than one of the following combinations:~~

2012/03/07
Committee: ECON

Proposal for a directive
Article 87 – paragraph 1 – point a – point i

~~(i) one executive directorship with two non-executive directorships;~~deleted

2012/03/07
Committee: ECON

Proposal for a directive
Article 87 – paragraph 1 – point a – point ii

~~(ii) four non-executive directorships.~~deleted

2012/03/07
Committee: ECON

Proposal for a directive
Article 87 – paragraph 1 – point a – subparagraph 2

~~Executive or non-executive directorships held within the same group shall count as one single directorship.~~deleted

2012/03/07
Committee: ECON

Proposal for a directive
Article 87 – paragraph 1 – point a – subparagraph 3

Competent authorities may ~~authorise~~reject a member of the management body of an institution ~~to combine more directorships than permitted, if this does not prevent the member from~~on the grounds that such a person may be combining too many directorships. Rejection may also be justified if, for any other reason, the competent authorities have grounds to believe that the member in question is not expected to be able to commit~~ting~~ sufficient time to perform its functions in the credit institution, taking into account individual circumstances and the nature, scale and complexity of the institution's activities.

2012/03/07
Committee: ECON

Proposal for a directive
Article 87 – paragraph 1 – point c a (new)

(ca) Members of the management body in its supervisory function shall have adequate access to information and documents which are needed to oversee and monitor management decision- making.

2012/03/07
Committee: ECON

Sharon BOWLES, Olle SCHMIDT, Ramon TREMOSA i BALCELLS

Proposal for a directive
Article 87 – paragraph 3

3. Competent authorities shall require institutions and their respective nomination committees to take into account diversity as one of the criteria for selection of members of the management body. In particular, institutions shall put in place a policy promoting gender, age, geographical, educational and professional diversity on the management body; as well as take concrete steps towards a more balanced representation on boards. Such concrete measures may for example include training of nomination committees, the creation of rosters of competent candidates, and the introduction of a nomination process where at least one candidate of each sex is presented.

2012/03/07
Committee: ECON

Proposal for a directive
Article 89 a (new)

Article 89a Institutions that benefit from ECB long- term refinancing operations In the case of institutions that benefit from any long- term financing operations from the ECB, the following principles shall apply in addition to those set out in Article 88(2): (a) Disclosure of profit made from the ECB LTRO through carry trades; (b) Any profit from carry trades should not count towards computation of remuneration and bonus pools.

2012/03/07
Committee: ECON

Proposal for a directive
Section III a (new)

SECTION IIIa STRICTER OWN FUNDS REQUIREMENTS BY MEMBER STATES Article 98a Own funds requirements 1. Subject to Articles 88 and 89, institutions shall at all times satisfy the following own funds requirements: (a) a Common Equity Tier 1 capital ratio as set out in article 87 of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms]; (b) a Tier 1 capital ratio as set out in article 87 of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms]; (c) a total capital ratio as set out in article 87 of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms]; (d) a SIFI add-on in accordance with articles 98e to 98h of this Directive, or (e) a systemic risk buffer in accordance with article 124a of this Directive. 2. Institutions shall calculate their capital ratios as follows: (a) the Common Equity Tier 1 capital ratio is the Common Equity Tier 1 capital of the institution expressed as a percentage of the total risk exposure amount; (b) the Tier 1 capital ratio is the Tier 1 capital of the institution expressed as a percentage of the total risk exposure amount; (c) the total capital ratio is the own funds of the institution expressed as a percentage of the total risk exposure amount. 3. Total risk exposure amount shall be calculated as the sum of the following points (a) to (f) after taking into account the provisions laid down in paragraph 4: (a) the risk weighted exposure amounts for credit risk and dilution risk, calculated in accordance with Title II of Part Three, in respect of all the business activities of an institution, excluding risk weighted exposure amounts from the trading book business of the institution; (b) the own funds requirements, determined in accordance with Title IV of Part Three or Part Four, as applicable, for the trading-book business of an institution, for the following: (i) position risk; (ii) large exposures exceeding the limits specified in Articles 384 to 390 of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms], to the extent an institution is permitted to exceed those limits; (c) the own funds requirements determined in accordance with Title IV of Part Three or Title V of Part Three, as applicable, for the following: (i) foreign-exchange risk; (ii) settlement risk; (iii) commodities risk; (d) the own funds requirements calculated in accordance with Title VI for credit valuation adjustment risk of OTC derivative instruments other than credit derivatives recognised to reduce risk- weighted exposure amounts for credit risk; (e) the own funds requirements determined in accordance with Title III of Part Three for operational risk; (f) the risk weighted exposure amounts determined in accordance with Title II of Part Three for counterparty risk arising from the trading book business of the institution for the following types of transactions and agreements: (i) OTC derivative instruments and credit derivatives; (ii) repurchase transactions, securities or commodities lending or borrowing transactions based on securities or commodities; (iii) margin lending transactions based on securities or commodities; (iv) long settlement transactions. 4. The following provisions shall apply in the calculation of the total exposure amount referred to in paragraph 3: (a) the own funds requirements referred to in points (c) to (e) of paragraph 3 shall include those arising from all the business activities of an institution; (b) institutions shall multiply the own funds requirements set out in points (b) to (e) of paragraph 3 by 12.5.

2012/03/07
Committee: ECON

Proposal for a directive
Article 98 b (new) (in SECTION III a new)

Article 98b SIFI ad-on - Definitions For the purpose of this Chapter, the following definitions shall apply: (1) 'Systemic institution' means an institution which in case of failure or malfunction could lead to systemic risk within a Member State or across two or more Member States; (2) '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; (3) 'Systemic buffer' means the own funds ratio that a specific systemic institution is required to maintain in accordance with Article 98a(3).

2012/03/07
Committee: ECON

Proposal for a directive
Article 98 c (new) (in SECTION III a new)

Article 98c SIFI ad-on - Identification of systemic institutions 1. Competent authorities shall, based on quantitative and qualitative analysis, identify systemic institutions within their jurisdiction taking into account, in particular, their: (a) Size; (b) Substitutability of the services provided by the institution; (c) Interconnectedness with the financial system of the institution; (d) complexity; (e) cross-border activity. 2. The competent authorities shall notify the identified systemic institutions, the ESRB, EBA and the Commission.

2012/03/07
Committee: ECON

Proposal for a directive
Article 98 d (new) (in SECTION III a new)

Article 98d SIFI ad-on - Requirement to maintain a Systemic Buffer 1. Member States may require a systemic institution to maintain an appropriate systemic buffer calculated in accordance with Article 87(3) of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms] on an individual basis, as applicable in accordance with Part One, Title II of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms]. 2. Member States may, by way of derogation from paragraph 1, permit the systemic buffer to be calculated and maintained on a consolidated basis, as applicable in accordance with Part One, Title II of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms]. 3. A systemic buffer required under paragraph 1 shall be determined with due consideration to the significance of the items under paragraph 1 of Article 98b associated with the systemic institution. 4. Competent authorities shall assess the systemic buffer required under paragraph 1 as part of the supervisory review and evaluation process in accordance with Article 92. 5. 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. 6. Competent authorities shall disclose the systemic buffer required under paragraph 1. 7. Where a systemic institution fails to meet in full the requirement under paragraph 1, the competent authorities shall 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. 8. Competent authorities may 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

Proposal for a directive
Article 98 e (new) (in SECTION III a new)

Article 98e SIFI ad-on - Systemic institutions By December 2014 the Commission shall, after consulting EBA, review Articles 98a to 98d taking into account internationally agreed standards for systemic institutions and, if appropriate, submit a legislative proposal to the European Parliament and the Council.

2012/03/07
Committee: ECON

Proposal for a directive
Article 124 a (new)

Article 124a Requirement to maintain a Systemic Risk Buffer 1. Each Member State may introduce a Systemic Risk Buffer of Common Equity Tier 1 for the banking sector or one or more subsets of the sector. 2. For the purpose of paragraph 1, the [Member State] OR [designated authority] may require credit institutions to maintain, in addition to the 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], a Systemic Risk Buffer of Common Equity Tier 1 capital. 3. The Systemic Risk Buffer requirement may be introduced in order to mitigate long term non cyclical macro-prudential risk not covered by Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms] in particular in order to mitigate systemic risk, within the meaning of a risk of disruption in the financial system with the potential to have serious negative consequences to the financial system and the real economy in a specific Member State. 4. Institutions shall not use Common Equity Tier 1 capital that is maintained to meet the requirement under paragraph 2 to meet any requirements imposed under Article 87 of Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms] and Article 123, 124 and any requirements imposed under Article 99 and 100. 5. When requiring a Systemic Risk Buffer [Member States] OR [designated authority] shall respect the following principles: a) the Systemic Risk Buffer requirement may not entail disproportionate adverse effects on the whole or parts of the financial system in other Member States or of the EU as a whole forming or creating an obstacle to the functioning of the internal market; b) the Systemic Risk Buffer Rate shall apply to all institutions, or one or more subsets of those institutions, for which the authorities of the Member State concerned are competent in accordance with this Directive. There can be introduced different requirements for different subsets of the sector; c) the Systemic Risk Buffer requirement shall be reviewed by [Member States] OR [designated authority] on or up to a biannual basis; d) the Systemic Risk Buffer may be calculated on a consolidated basis [as set forth in...]. 6. When setting or resetting a Systemic Risk Buffer requirement [Member States] OR [designated authority] shall notify the Commission, EBA and the ESRB two months prior to the publication of the decision. This notification shall describe in detail the following elements: a) the systemic or macro-prudential risk in the Member State; b) the reasons why such changes pose a threat to financial stability at national level; c) the justification for the proposed measures to be deemed effective to mitigate the intensity of risk; d) the analysis of the impact of the measures on the single market; e) the justification for why any of the existing measures in Regulation (EU) No. .../2012 of ... [on prudential requirements for credit institutions and investment firms], excluding Article 443a and 443b, or this Directive alone or a combination of both will not be sufficient to address the identified macro-prudential risk. 7. When a [Member State] OR [designated authority] sets or resets the Systemic Risk Buffer it shall also decide the date from which the institutions must apply the increased buffer. 8. Each [Member State] OR [designated authority] shall announce the setting of the Systemic Risk Buffer requirement by publication on an appropriate web site. The announcement shall at least include the following information: a) the level of the applicable Systemic Risk Buffer; b) a justification for the Systemic Risk Buffer requirement; c) the date from which the institutions must apply the setting or resetting of the Systemic Risk Buffer. If the publication referred to in point (b) of paragraph 10 would jeopardise financial stability within one or more Member States, the required information in point (b) of paragraph 10 shall not be included in the announcement.

2012/03/07
Committee: ECON