The European Union’s Economy and Finance Ministers will take stock of developments with regard to the Revised Capital Requirements Directive (CRD IV), when they meet on Tuesday, December 4, in Brussels. During the ECOFIN Council, ministers will also hold an exchange of views on the way forward regarding the Banking Union and discuss the Annual Growth Survey for 2013,that will be presented by the European Commission.
Tuesday’s meeting is the last ECOFIN Council to take place under the Cyprus Presidency and will be chaired by Cyprus’ Minister of Finance, Mr. Vassos Shiarly.
Revised Capital Requirements Directive (CRD IV): State of play and further guidance
The Cyprus Presidency intends to present a progress report to the Council on a number of outstanding political issues related to the Revised Capital Requirements Rules and thereafter the ministers are expected to hold an exchange of views. The objective is to conclude the agreement with the European Parliament before the end of the year.
The ‘CRD IV’ legislative package, consisting of two proposals (Directive (CRD) and Regulation (CRR) by the European Commission, aims, inter alia, to transpose into EU law the agreements on capital requirements reached by the Basel Committee on Banking Supervision (the Basel III requirements), as endorsed by the G20 leaders, and confirmed by the European Council.
The so-called "Basel III" agreement, concluded by the Basel Committee on Banking Supervision, strengthens bank capital requirements and foresees a framework for new regulatory requirements on liquidity and leverage.
“This is a very important issue in order to establish stability in the financial sector. Despite the complications, Cyprus Presidency will put maximum effort in order to conclude it by December 2012,” Mr. Shiarly says.
Single Supervisory Mechanism: Debate on open issues
The Presidency will brief ministers on the state of play and key open issues related to the establishment of a Single Supervisory Mechanism. Ministers are expected to provide guidance for the way forward, respecting the timelines set by the European Council. The objective is to reach a general approach/mandate to negotiate with the European Parliament, with a view to reaching agreement before the end of the year.
On September 12 2012, the Commission proposed the establishment of a single supervisory mechanism for banks led by the European Central Bank. This proposal is a first step towards a fully integrated financial framework, which includes further components such as a single rulebook, common deposit protection and a single bank resolution mechanism.
A temporary Ad-Hoc Working Party on the Banking Supervision Mechanism has been set up, in order to examine the relevant European Commission proposals. This Working Party has now met six times and has made considerable progress.
“The Cyprus Presidency considers the creation of a Banking Supervisory Mechanism as a very important step for further strengthening the stability in the financial sector and deepening of the European Union. Our aim is to move forward on this issue as fast as possible and conclude by the end of the year”, Mr. Shiarly says.
Annual Growth Survey 2013
The European Commission will present the Annual Growth Survey for 2013.
The Annual Growth Survey sets out what the Commission believes must be the EU’s priorities for the coming 12 months in terms of economic and budgetary policies and reforms to boost growth and employment. Its presentation marks the opening of the European Semester of economic governance.
Ministers will also have the opportunity to discuss the Alert Mechanism Report presented by the European Commission, in the context of the Macroeconomic Imbalances Procedure.