Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-09-01-Speech-1-081"
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"en.20030901.6.1-081"2
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".
Mr President, this is an important subject. I wish to begin by saying that the Commission welcomes this own-initiative report drawn up by Mr Radwan and the Committee on Economic and Monetary Affairs. Parliament's interest in this issue is most welcome. Together with the intensive consultation process that has taken place on the Commission's draft proposals, this debate will contribute strongly to meeting the challenging timetable to adopt a new framework in the European Union at the same time as the new Basel Accord is implemented globally.
I fully share the view expressed in the report that the current rules on capital adequacy need to be revised. They have become outdated and no longer reflect the realities of the financial services sector.
I am also pleased that the report supports the view that the new framework should apply to a broad range of banks and investment firms. That ensures a uniform standard of supervision and also fair competition. A key objective of the Commission is to ensure that the new framework is suitable not only for large banks but also for less complex banks and for investment firms. We are now very close to achieving that objective.
For bank lending to SMEs – which has been of particular concern in the rapporteur's own country – the report states correctly that numerous improvements have been obtained. The results of the recent impact study indicate that capital requirements for loans to SMEs are now very fair and that they are likely to be reduced as compared with the rules currently in force. That is another important reason not to continue the current rules. The report calls for even further reductions for SMEs and for reductions in the bank capital requirements for venture capital and equity investments in start-up companies.
I am duty-bound to tell Parliament that the Commission has very strong concerns about this matter. Venture capital is risk capital. If we use the prudential rules to reduce artificially the capital requirements for risky investments, we will be jeopardising the very interests that we are trying to protect – that is, the safety of consumers' savings and the stability of the financial system.
The report also identifies the very important question of the potential cyclical effects of the new rules: what if, in an economic downturn, the risk sensitivity of the new rules results in less availability of credit? The key lies in striking the right balance between risk sensitivity – and its benefits – and potentially negative cyclical effects. The Commission thinks that the new rules currently proposed strike a good balance. However, this is an aspect that must continue to be closely monitored. We must be ready to act quickly and modify the rules if developments suggest that the balance is not correctly struck.
Let me finish by repeating what I said when the Commission published its third consultation paper in July. I believe the new capital framework will be good for financial stability, that it will be good for financial institutions and that it will be good for their customers. I therefore welcome this report – for which, once again, I thank Mr Radwan – as a further step towards ensuring that the new European framework will be the best it possibly can be, and in ensuring that it is introduced on time so as not to disadvantage European institutions."@en1
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