1. Objectives of the proposed Regulation and proposed Directive
On 20 July 2011, the European Commission adopted the proposed Directive and proposed Regulation, which are to replace Directives 2006/48/EC and 2006/49/EC. The proposals represent an important step towards strengthening regulation of the banking and investment firms sector and creating a sounder and safer financial system in the Union. The ECB welcomes the Union’s strong commitment to implement international standards and agreements in the field of financial regulation, while taking into consideration, where relevant, specific features of the Union’s legal and financial system. The proposed measures will substantially increase systemic resilience, contribute to the smooth functioning of the financial system, and ensure a stable and sustainable framework for the provision of financial services in the Union.
2. Reform of Union banking legislation
The ECB welcomes the innovative approach taken by the Commission, in particular with regard to the proposed regulation, which incorporates most of the technical Annexes to Directives 2006/48/EC and 2006/49/EC and limits Member State options and discretion. The proposed framework will lead to increased legal certainty, while reducing duplication risks at Member State level. The financial crisis also demonstrated the need to act rapidly and efficiently. It is important to ensure the appropriate level of flexibility for the development of Union banking regulation. As regards future reviews of the proposed regulation and as pointed out in previous opinions, the ECB recommends ensuring that only framework principles contained in the proposed regulation reflecting basic political choices and substantive matters remain subject to the ordinary legislative procedure. Technical rules, including those in the proposed regulation, should be adopted as delegated or implementing acts in accordance with Articles 290 and 291 of the Treaty, which will thereby emerge as the main body of rules applying to Union financial institutions.
3. Single European rulebook in the financial sector
3.1 As stated in previous opinions, the ECB strongly supports the development of a single European rulebook for all financial institutions, as it promotes the smooth functioning of the single market within the Union and facilitates greater financial integration in Europe. A single European rulebook ensures that financial institutions providing financial services in the single market comply with one set of prudential rules. This mitigates regulatory arbitrage opportunities and distortions to competition. Furthermore, harmonised rules improve transparency and reduce regulatory and compliance costs.
Full Opinion
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