The letter was addressed to Prime Minister David Cameron, Prime Minister Mark Rutte, Prime Minister Mario Monti, Prime Minister Andrus Ansip, Prime Minister Valdis Dombrovskis, Prime Minister Jyrki Katainen, Taoiseach Enda Kenny, Prime Minister Petr Nečas, Prime Minister Iveta Radičová, Prime Minister Mariano Rajoy, Prime Minister Fredrik Reinfeldt and Prime Minister Donald Tusk.
The letter presents the following key initiatives on financial sector legislation
a) Bank resolution
The Commission is following a two-pronged approach: by reducing the probability of banking failure through stronger supervision, better corporate governance and tighter regulatory standards, and by appropriate tools and resources available for orderly and timely resolution. The Commission will be making a proposal for a new system of bank resolution.
b) EU legislation compatible with Basel III standards
Whereas Basel III applies to 'internationally-active banks', in the EU it has always applied to all banks (more than 8,300) as well as investment firms. The Commission has taken these particular circumstances into account when transposing Basel III into EU law. Nevertheless, the proposal delivers a faithful implementation of Basel III standards in EU law.
c) Regulatory capital
To qualify for inclusion in the highest quality category of regulatory capital, a capital instrument must be of extremely high quality and must absorb losses fully as they arise. The criteria agreed in Basel III are extremely strict and are transposed exactly in the Commission's proposal. This is not a matter of the origin of capital.
d) Implementation of the G20 principles on banking sector remuneration in line with existing EU legislation
Rules have already been introduced, on the basis of Commission proposals, for banks and alternative investment fund managers. Forthcoming Commission proposals will extend these rules to other parts of the financial sector.
Full letter
© European Commission
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