The European Finance Ministers confirmed agreement on the Capital Requirements Directive incorporating the Basel II rules regulating capital adequacy across the international banking industry. The EcoFin Council in Luxembourg approved the Capital Adequacy Directive, accepting all amendments voted by the European Parliament in first reading. The directive can now be adopted without discussion at a forthcoming Council meeting, once the texts amending the 2000 Banking Directive and the 1993 Directive on the capital adequacy of investment firms and credit institutions have been finalised.
Agreement on Parliament's right to 'call back' was reached at the last minute, shortly before the plenary vote, on a two-year 'sunset clause' under which current practice would continue until 2008, until which time the Parliament, Council and Commission can agree on a new comitology procedure, including the Parliament's call-back right.
The Commission welcomed the agreement by the ECOFIN Council to accept Parliaments’ amendments and underlined the excellent co-operation of both institutions.
“I congratulate the UK Presidency on the rapid progress that has been made with this proposal. This demonstrates that the EU is capable of acting quickly and effectively. Now we need to make sure it is implemented in a coherent way across Europe”, Commissioner McCreevy said.
A key aspect of the new framework is its flexibility. This provides institutions with the opportunity to adopt the approaches most appropriate to their situation and to the sophistication of their risk management.
Member States are to apply the Directive from the start of 2007, with the most sophisticated approaches being available from 2008.
Council press release
Commission press release
Original Proposal
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Parliaments’ amendments
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