Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-10-21-Speech-2-224"
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"en.20031021.6.2-224"2
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".
The Commission would like to thank Mr Karas for his questions, which are important and detailed. The Commission services are preparing a proposal for a directive on the capital adequacy of banks and investment firms. As Parliament will be aware, the Basel Committee has announced a short delay in its timetable in reaching agreement on the new Basel Accord. The accord should now be finalised by the middle of 2004 at the latest. The Commission's proposal should be made very shortly thereafter.
The Commission services are pursuing a solution for covered bonds which appropriately reflects the risk of these instruments. I apologise for having been so detailed, Mr President, but the questions were also detailed and I wanted to reply in a similar vein.
Implementation at the end of 2006 remains a challenging but achievable task. The Commission services remain firmly on track in the development of a proposal for an EU directive. That draft proposal is broadly consistent with the work done by the Basel Committee, but appropriately differentiated, where necessary, to take account of the specificities of the EU context as supported by the European Parliament.
Regarding Mr Karas' fourth question, let me confirm that the results of the study on the consequences of the new framework on the European economy – especially SMEs – will be available in due time to inform the EU legislature. The technical details of the draft directive are still subject to reflection and consultation within the Commission, but I am pleased to provide you now with the following elements in response to the questions raised by Mr Karas.
First, with regard to his question on retail loans, the draft directive should indeed allow a wide use of comitology procedures to make necessary changes in the light of market developments, including inflation adjustments.
With regard to his second question, the Commission services' third consultative paper – the so-called CP3 of 1 July 2003 – no longer refers to a specific granularity criterion to distinguish retail from corporate loan portfolios.
With respect to questions 3, 7 and 8 on banks' internal rating systems, the draft proposals do not spell out how banks should develop their rating systems and which risk factors they should take into account. As is currently the case, banks are only required to take into account all relevant available information when they assess the credit quality of their borrowers, including any investments and research activities a potential borrower has undertaken or plans to make. This is not new and should be expected of any bank.
Irrespective of that, the Commission services have started a project to examine ways of promoting the use of rating systems that include technology risk assessments – in other words, technology ratings – to enable potential investors to appraise the specific risks and rewards associated with investments in technology-based SMEs. But, if a bank wants to use its internal ratings for regulatory capital purposes, its supervisor will need in future to check the reliability of the bank's rating system. That will improve the quality of the systems and ratings and is in the interest of all parties involved.
On question 5 it is important for the Commission that the new rules are appropriate for all types and sizes of institutions, especially small banks. Work in Basel and Brussels reflects this in numerous areas, for example by allowing a partial use of methodologies to avoid unnecessary burdens for small credit institutions.
Finally, on question 6, a broader range of collateral is already recognised in connection with significant improvements for loans to SMEs. At this stage, both the Commission and the Member States' supervisory authorities believe that a further recognition of collateral and the destandardised approach would not be justified on prudential grounds."@en1
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