FBE position paper on conglomerates

03 October 2001

-
In general the EBF considers the timing of the proposed directive inappropriate as far as the introduction of new capital adequacy requirements for financial conglomerates is concerned. The introduction of such requirements would undoubtedly pre-empt the ongoing discussion on the review of the solvency requirements in the banking sector lead by the Basel Committee. There is a real danger that an unlevel playing field will be created, detrimental to the EU financial institutions. The EBF therefore advocates to wait until the current revision of the Basel Capital Accord is completed before considering the adoption of capital requirements relating to financial conglomerates.
EBF also claims that among other things the envisaged deduction of bank’s equity holdings in insurance undertakings is questionable given the lack of any significant positive correlation between banking and insurance risks.
See full text
See also the STUDY ON THE RISK PROFILE AND CAPITAL ADEQUACY OF FINANCIAL CONGLOMERATES commissioned by De Nederlandsche Bank and other institutions.

© FBE