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Caroline Liesegang, Head of Prudential Regulation at AFME, said:
“European banks have raised hundreds of billions in equity capital
since the financial crisis, and their resilience has been proven during
recent economic shocks. The co-legislators should therefore uphold their
commitment to avoid any significant further increases in capital
requirements, which could have negative consequences for lending and the
broader economic recovery. While the Commission proposals include some
transitional measures to allow the market to adjust, AFME’s impact
analysis suggests that capital increases could still be material and the
legislative texts need to be reviewed with care.”
In particular, as the Parliament continues its examination of the
proposals, AFME recommends that it considers targeted adjustments in a
number of areas. These include allowing flexibility on the duration of
the above-mentioned transitional measures and avoiding a
disproportionate impact on end-users’ ability to access a broad range of
important services like trade finance, hedging and trading.
It is important that certain aspects of the package, in particular
those which are most relevant for capital market businesses and global
in nature are implemented simultaneously and consistently across
jurisdictions. In this context, we encourage the Parliament to support
the delegation of powers to the European Commission as the most
efficient tool for ensuring international alignment.
Finally, we welcome the rapporteur’s initial support for the application of the Output Floor at the consolidated level. This is important to avoid undue capital impacts and fragmentation in Europe, and we call on the Parliament to uphold this approach in the course of their work to finalise the package.