Banking supervision and crisis management
A crucial step in the process is the strengthening of the foundations. The presentation of the Basel III package on capital requirements for credit institutions is indeed the most fundamental response to the 2008 crisis. The European Union transposes it via the fourth Directive on Capital Requirements (CRD IV) as well as via a regulation of the same name (CRR). Both documents date back to last summer and have since been discussed by the EU’s legislators, the European Parliament and the Council. An agreement is expected by the summer of 2012.
If the Capital Requirements Directive is preventative by nature, the European Commission has also been working on an instrument that is meant to address crisis resolution in the banking sector. In short: how to deal with future earthquakes and have an evacuation plan in such an event. A proposal for a Directive is currently expected in February 2012 or even later.
Financial markets
The Commission presented in autumn a proposal for a Directive revising the Markets in Financial Instruments Directive (MiFID), as well as a proposal for a regulation. A new proposal on credit rating agencies is on the table as well, which will also keep the legislators busy for the better part of this year. On the issue of short selling, an agreement was found in late 2011 and progress has been made on the European Markets Infrastructure Regulation (EMIR). Legislative proposals are also expected in 2012 on central securities depositaries and on a securities law. On the financial stability front, shadow banking has been identified by the G20, the Financial Stability Board and the European institutions as a further priority.
Consumer protection
Regarding deposit guarantee schemes, the guaranteed amount has been raised to €100,000, while the pay-out period is to be reduced. Similar works are ongoing on the Investor Compensation Schemes Directive. The UCITS V proposal is expected in April 2012 and should, amongst others, significantly increase the liability of the depositary. Furthermore, the PRIPs initiative is to improve the comparability among packaged retail investment products via an extension of the key investor information document from UCITS to other comparable products.
The internal market
Regarding payment services, after intensive negotiations during the best part of last year, an agreement was found in December on the SEPA end date regulation. In retail banking, both the Council and the European Parliament are currently working on the Mortgage Directive, and the Parliament is considering an own initiative report on access to basic bank accounts after judging the mere recommendation of the Commission as not going far enough. On bank account fees, the Commission is expected to come out with a legislative proposal in 2012 and might consider doing the same thing on collective redress.
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