ECOFIN Roadmap of financial reform (October 2009)

30 October 2009

1. Follow-up to the de Larosière Report
Action	Timetable	Actors	State of progress
Revision of EU supervisory framework by:	September 2009	Commission	Legal Proposals by Commission
1. adopting a general approach on the a macro-prudential framework (creation of the ESRB)	October 2009	Council
2. adopting a general approach on a micro-prudential framework (creation of ESFS) European Banking Authority EBA European Securities and Markets Authority ESMA European Insurance and Occupational Pensions Authority EIOPA	December 2009	Council conclusions Dec

2. Colleges of supervisors
Action	Timetable	Actors	State of progress
Establishment of colleges of supervisors for large cross-border financial groups - Principles                                                        CEBS’ report	As soon as possible and at the latest end 2009	CEBS-CEIOPS	Ongoing for CEBS, fulfilled for CEIOPS
Operational guidelines for the colleges of supervisors Advice to the commission financial conglomerates directive	End 2009	CEBS-CEIOPS	Ongoing: CEBS guidelines to be published end 2009; fulfilled for CEIOPS
Establishment of CEBS and CEIOPS risk assessment methodology within colleges	End 2009	CEBS-CEIOPS	Ongoing: both CEBS and CEIOPS respectively working on a common methodology

3. Reports/analysis of operational aspects to EU supervision
Action	Timetable	Actors	State of progress
Explore ways to strengthen national application of guidelines of EU Committees of supervisors		EU Committees of supervisors	Completed by CEBS and CESR. Ongoing in CEIOPS (to be finalised by end 2009)
Study on sanctioning powers CEIOPS Report	Autumn 2009	Commission, based on input from EU supervisory Committees	Postponed Input by the EU Committees of Supervisors has been delivered.
Report on supervisory Cooperation and information exchange	Autumn 2009	Commission	Ongoing (will be released after finalisation of the Supervision package)
Report on delegation of tasks and responsibilities	Autumn 2009	Commission	Input by the EU Committees of Supervisors has been delivered.

4. Transparency
Action	Timetable	Actors	State of progress
Financial institutions provide full risk disclosure in reporting and disclosure of all losses on an ongoing basis	Ongoing	Financial institutions, Commission with input from EU Committees of Supervisors	The CEBS Reports on Financial Statements respectively on Pillar 3 disclosures were published in June 2009; follow-up work is ongoing CEIOPS to develop Level 3 guidance on reporting and disclosure (follow up to Level 2 advice in 2009)

5. Taking account of the EU dimension
Action	Timetable	Actors	State of progress
Enable supervisory authorities to take account of the EU dimension	Mid-2009	Member States, taking into account recent legislation on banking and insurance and securities	Ongoing
	End-2009	FSC to follow up on implementation	Ongoing

1. Bank resolution framework
Action	Timetable	Actors	State of progress
Bank resolution framework (including early intervention tools) of the EU	June 2009	Commission Communication  - (Poss. Follow up: Consultation and legislative proposals in 2010) Input from the EFC -	Ongoing Scheduled for October 2009 ECOFIN December 2009
Resolution plans for financial institutions (‘living wills’), ensuring consistency and coordination in implementation.	2010	Commission, Council with input from Level 3 Committees /ESAs

2. Guarantee Schemes
Action	Timetable	Actors	State of progress
Review the adequacy of existing guarantee schemes in banking, securities and insurance and make appropriate legislative proposals CEIOPS recommendations	July 2009- mid 2010	Commission Consultation in July, possible legislative proposal in early 2010	Ongoing Pre-consultation
Assessment of the need for a pan-EU guarantee scheme EC report	2010	FSC, with inputs from Commission, BSC, CEBS, CEIOPS and CESR/ESAs

3. EU-wide framework for policy coordination on financial stability
Action	Timetable	Actors	State of progress
Creation of a comprehensive EU-wide framework for closer policy coordination on financial stability, including:	2010	EFC
regular transmission of risk assessments,	2010	ESRB
carrying out EU-wide stress tests in cooperation with the Commission and the ESAs as appropriate;	2010	ESRB
further enhancing policy coordination between relevant authorities in the EU, (CBSGs or the ECOFIN/EFC for the EU as a whole), taking into account as appropriate, the links to the ESRB and ESFS , by developing practical arrangements and carrying out further work on burden sharing	2010 End 2009	EFC based on a reflection paper from the EFC AHWG

4. Memorandum of Understanding
Action	Timetable	Actors	State of progress
Implementation of the 2008 MoU	2009	Supervisory authorities, Ministries, Central Banks	Ongoing FSC to report on implementation to the November EFC (in particular on the establishment of CBSGs)
(Poss) revision of the need to revise the 2008 MoU beyond the adjustments for new developments	2010	EFC

5. Home –Host
Action	Timetable	Actors	State of progress
Consider the need and possibility of introducing a number of changes in EU legislation to enhance the functioning of the EU single Passport	2009	Commission	Poss. Legislative changes to be discussed in EBC on 23 October

1. Valuation and accounting standards
Action	Timetable	Actors	State of progress
Replacement of IAS 39 (covering level playing field issue following the FASB's decision of April 2009)		IASB (Commission and EU Committees of Supervisors closely monitoring progress)	Ongoing
o Exposure draft on classification and measurement (phase I)	July 2009 (standard in October 2009)
o Exposure drafts on loan loss provisioning and on hedge accounting (phases II and III)	Oct. (phase II) and Dec. (phase III) 2009 (standards H1/2010)
Enhance and reform governance of accounting standard bodies	2009	Commission	Phase II of constitutional review ongoing
Refinement of the accounting rules in respect of through the cycle provisioning	Oct.2009 (standards H1/2010)	IASB (Commission closely monitoring progress)	Ongoing

2.  Capital requirements for banks (CRD)
Action	Timetable	Actors	State of progress
Enhance liquidity risk assessment and management by banks	2009	CEBS Guidance on liquidity will be published in 2009.	CEBS Consultation ongoing with deadline 31 Oct. Coordinated with Basel Committee process
	2010	BASEL/ COM to propose global liquidity standards
Removal of national options and Discretions	October 2009	Commission Proposal following CEBS advice.	Ongoing, CEBS
Harmonization of the definition of capital	2010	Commission	Basel Committee process, CEBS

3.  Pro-cyclicality
Action	Timetable	Actors	State of progress
Follow-up to the report of the EFC-WG on Pro-cyclicality and the July Ecofin Conclusions Possible measures to address pro-cyclicality of capital	September	EFC with input from Commission and FSC discussion	Ongoing; (the Commission proposal in July addressed one of the perceived drivers of procyclicality: remuneration policies)
o Dynamic provisioning	October 2009	Commission proposal	Ongoing (linked to Basel process), CEBS
o Proc-cyclicality of CRD	End 2009	Commission report	Expected in early 2010

4.  Credit rating agencies
Action	Timetable	Actors	State of progress
Credit rating agencies to adopt standards for compliance with EU regulation based on the IOSCO code of conduct		CESR- CEBS (CRD)	Ongoing
o EU regulation	Autumn 2009	based on IOSCO Works
Registration and oversight of CRAs	2010

5.  UCITS regulation
Action	Timetable	Actors	State of progress
Assess risk management in non-bank investors, particularly for illiquid assets	Autumn 2009	Commission, CESR and industry	Expected level II   Provisions of the UCITS directive
Any further initiative as a follow-up to the Madoff case			CESR draft advice under public consultation

6.  OTC Derivatives
Action	Timetable		Actors		State of progress
Increasing the safety for "over the counter" derivatives markets , by  :- the clearing of standardized OTC derivative contracts through central counterparties and, if not, higher capital requirements ; - the reporting of non-standardized derivative contracts to trade repositories	Autumn/end 2009 (political orientations)/ 2010 (potential legislation)		Commission to examine possible future solutions.       CESR report on trade repository/“warehouse” starting with consultation		Ongoing
Improve transparency in use of derivatives	June 2009 + MIFID review		Commission presented a report		Ongoing
8.  Other actions
Action	Timetable	Actors		State of progress
Extend the scope of regulation to all to date still unregulated instruments, institutions, markets in respect of systemic institutions	Overview By September 2009 and Mifid review in 2010	EFC, FSC, Commission		Ongoing. Initiated for hedge funds managers, CRAs, OTC derivatives.
Member States' common format to disclose national transposition of EU legislation		MS and EU Committees of Supervisors		CEBS completed CESR-CEIOPS ongoing
Review of the Prospectus Directive	Autumn 2009	Commission proposal		Ongoing
Cross sectoral consistency checks of terminology of EU legislation	September 2009	Commission		Ongoing
Harmonization of reporting formats for financial institutions	2012	EU Committees of Supervisors, Commission, FSC		Ongoing
Review market abuse directive	Autumn 2009	Commission proposal		Ongoing

1.  Retail policies
Action	Timetable	Actors	State of progress
Ensure responsible lending and borrowing	Autumn 2009	Commission	Public consultation launched in June 2009 with a deadline of 31 August, public hearing took place on 3 September 2009. Analysis of the results of the consultation and hearing ongoing.
Promote best practices for pre-foreclosures arrangements	October 2009	Commission	Responses to questionnaires to national supervisory authorities on pre-foreclosure practices are being analysed by the Commission
Empowering retail clients	Early 2010	Council, Commission
Packaged Retail Investment Products (PRIPs)	End 2009	Commission	Orientation paper subject to public consultation. EC communication
		EU Committees of Supervisors	Input to the Commission from CESR, CEIOPS and CEBS on issues relating to “scope”, product disclosure and selling practices by end Oct 2009.
Strengthen financial services consumer inputs to EU policy	End 2009	Commission	Internal deliberations on the best approach to strengthen consumer/investor input
Simplify and harmonize national substantive law on securities holding and transactions	Early 2010	Commission proposal	Ongoing
Short Selling	End 2009	CESR	Current public consultation
Complete the Single Euro Payment area	Mid-2009	Commission	Commission Communication (SEPA roadmap) adopted 10 September 2009

2.  Remuneration policies and governance
Action	Timetable	Actors	State of progress
Link capital requirements of banks to remuneration policies and give enforcement powers to supervisors on remuneration issues	End 2009	Commission     Inputs from CEBS	Proposal tabled in July (CRD III)   CEBS guidelines were published on 20 April 2009
Examine additional measures on remuneration and risk management in relation to non-banking institutions	2010	Commission Report	Ongoing, (also input from Basel Committee). CEBS work on internal governance and risk management. CEIOPS work on Level 3 guidance on governance as a follow up on Level 2 advice to EC in 2009.

3.  Non co-operative jurisdictions
Action	Timetable	Actors	State of progress
Implement the agreed strategy in the context of the G-20 on non-cooperative jurisdictions based on:	Various dates. (the FSB to report to G20 on criteria and compliance against regulatory standards by November 2009)	Commission and Member States in the context of the FSB	Ongoing
- Criteria for identifying non cooperative jurisdictions
- Developing a process for evaluating compliance
- Developing a toolbox of dissuasive measures to promote adherence to international prudential standards