|
|
The Council adopted a Directive amending the Financial Conglomerate Directive in order to close loopholes and ensure appropriate supplementary supervision of financial entities in a financial conglomerate (PE-CONS 39/11 + 15670/11 ADD 1). The new Directive also adapts the supervision of financial conglomerates to the EU's new supervisory structure.
The Financial Conglomerate Directive (FICOD), adopted at the end of 2002, gave national financial supervisors additional powers and tools to watch over conglomerates and apply supplementary supervision on them, in addition to specific banking and insurance supervision. The objective of supplementary supervision was to control group risks and the risk arising from double gearing (i.e. multiple use of capital within a conglomerate), whereby a number of companies pool their overall risk by placing capital with each other.
The revision of FICOD also amends the relevant legislation on banking and insurance supervision, namely the Capital Requirements Directive (2006/48/EC and 2006/49/EC) and the Directive on Supplementary Supervision of Insurance Undertakings in Insurance Groups (98/78/EC).
A financial conglomerate is a group that combines different types of regulated financial firms (bank, securities firm, insurance company) and is therefore exposed to two or more sector-based regulatory regimes.