Today, the European Parliament’s economic and monetary affairs committee (ECON) adopted a resolution with an oral question to the EU Commission on the finalisation of Basel III. The text drafted by rapporteur and ECON chair Roberto Gualtieri was carried by a large majority of conservatives, social democrats, liberals and eurosceptics. Greens and the Left group voted against. The resolution has still to be voted in the plenary. A discussion with the Commission in the plenary of the Parliament is likely.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“This resolution marks a bad turning point after the financial crisis. For the first time ECON sides with those who are generally against higher capital requirements for banks. It is welcome that the European Parliament takes its role seriously to control the positions taken by the EU Commission, the ECB and the European Banking Authority in the framework of the Basel Committee on Banking Supervision. The Basel based institution suffers from a lack of democratic control and the Parliament should do more to correct it. But, it is unfortunate that the European Parliament criticizes that the finalisation of Basel III might increase capital requirements. The banking sector is still weakly capitalized and overly complex. Many bank balance sheets are weak. Even thinly capitalised banks continue to pay out dividends, bonuses and high wages. The problems of shadow banks and too big to fail are still not tackled seriously. Therefore, it is legitimate that Europe insists that its banking model is not hit unfairly by Basel rules. But, it is a severe mistake to side with the banking lobby that capital requirements are sufficient and should not be increased further.
We are pleased that our suggestion for a “small banking box” was voted in the resolution. A one size fits all approach with complex rules in banking regulation and supervision hits small institutions disproportionally and will weaken fair competition.”
The original draft resolution can be found here. The finally agreed text looks considerably different and will only be published in the days to come:
DRAFT ECON MfR on Finalisation of Basel III_20161024
The amendments by the members of ECON, which demonstrate the different views, can be found here: