Compromise amendments on A European Systemic Risk Board
COMPROMISE A
Article 2
Definitions
For the purpose of this Regulation, the following definitions shall apply:
(a) 'financial institution' means any undertaking whose main business is to take deposits, grant credits, provide insurance services or other financial services to its clients or members or engage in financial investment or trading activities on its own account, and any other undertaking or entity operating in the European Union, whose financial activities may pose a systemic risk even if they have no direct links with the public at large;.
(b) 'financial system' means all financial institutions, markets, products and market infrastructures.
(c) 'systemic risk' means risk of disruption in financial services, including bubbles related to the financial markets, that (i) is caused by an impairment of all or parts of the financial system and (ii) has the potential to have serious negative consequences for the internal market and the real economy.
All types of financial intermediaries, markets and infrastructure can potentially be systematically important to some degree.
COMPROMISE B
Article 3
Mission, Objectives and Tasks
1. The ESRB shall be responsible for the macro-prudential oversight of the financial system within the European Union in order to prevent or mitigate systemic risks within the financial system so as to avoid periods of widespread financial distress,contribute to a smooth functioning of the Internal Market and ensure a sustainable contribution of the financial sector to economic growth.
2. For the purposes of paragraph 1, the ESRB shall carry out the following tasks:
(a) Determine and/or collect, as appropriate, and analyse all the information relevant, including legislation with a potential impact on financial stability such as accounting, reorganisation and winding-up rules, for the mission described in paragraph 1;
(aa) identify and/or collect the relevant data from financial institutions and through the European Supervisory Authorities, in accordance with article 15;
(b) identify and prioritise such risks;
(ba) where appropriate, declare the existence of an emergency situation;
(c) issue warnings where risks are deemed to be significant, make them public where appropriate;
(d) issue recommendations for remedial action and make them public where appropriate;
(e) monitor the follow-up to warnings and recommendations;
(f) cooperate closely with all the other parties to the European System of Financial Supervisors and , where appropriate, provide the European Supervisory Authorities with the information on systemic risks required for the achievement of their tasks; in particular the European Systemic Risk Board, shall in collaboration with the European Authority, develop a common set of quantitative and qualitative indicators ("Risk Dashboard") which will serve as the basis to assign a “Supervisory rating” to cross border institutions that potentially could pose a systemic risk.
Such rating will be reviewed on a regular basis, reflecting material changes of the risk profile of an institution. The Supervisory Rating will be a critical element for the decision to directly supervise or intervene in an ailing institution
(fa) participate in the European Supervisory Authorities (Joint Committee);
(g) coordinate with international institutions, particularly the International Monetary Fund and the Financial Stability Board as well as the relevant bodies in third countries on matters related to macro-prudential oversight;
(h) carry out other related tasks as specified in Community legislation.
COMPROMISE C
Article 4
Structure
The ESRB shall have a General Board, a Steering Committee and a Secretariat and an Advisory Scientific Committee.
2. The General Board shall take the decisions necessary to ensure the performance of the tasks entrusted to the ESRB.
3. The Steering Committee shall assist in the decision-making process of the ESRB by identifying risks and preparing the meetings of the General Board, reviewing the documents to be discussed and monitoring the progress of the ESRB's ongoing work and maintaining a strong link with all the parties to the ESFS. Where the General Board is called upon to take decisions on sector-specific matters, the Steering Committee shall prepare any meetings in this regard after consultation of the competent European authority.
4. The Secretariat shall be responsible for the day-to-day business of the ESRB and all staff matters. It shall provide high-quality analytical, statistical, administrative and logistical support to the ESRB under the direction of the Chair of the General Board in accordance with Council Regulation XXXX/EC/2009. It shall also draw on technical advice from ESAs, national central banks and national supervisors.
5. The Advisory Scientific Committee referred to in Article 12 shall provide advice and assistance on issues relevant to the work of the ESRB.
COMPROMISE D
Article 5
Chairmanship
1. TheChairof the ESRB shall be the President of the ECB. His or her term of office shall be the same as his or her term of office as President of the ECB.
1 (a). The first Vice-Chair shall be elected by the members of the General Council of the ECB for the same term as that of his or her membership of the General Council, with regard to the need for a balanced representation of Member States, and those within and outside the euro area. He or she may be re-elected.
1 (b). The second Vice-Chair shall be the Chair of the Joint Committee of European Supervisory Authorities.
1c. Before taking office, the Chair and first Vice-Chair of the ESRB shall present to the European Parliament, during a public hearing, how they intend to discharge their duties under this Regulation. The second Vice-Chair shall be heard by the European Parliament in his or her role as Chair of the European Supervisory Authority (Joint Committee).
2. The Chair shall preside at the meetings of the General Board and the Steering Committee.
3. The Vice-Chairs, in order of precedence, shall preside at the General Board and/or the Steering Committee when the Chair cannot participate in a meeting.
4. If for any reason the Vice-Chairs are unable to discharge their duties, new Vice-Chairs shall beelected in accordance with paragraphs 1a and 1b and 1c.
5. The Chair shall represent the ESRB externally.
COMPROMISE E
Article 6
General Board
1. The following persons shall be Members of the General Board with voting rights
(a) the President and the Vice-President of the ECB;
(b) the Governors of the national central banks;
(c) a Member of the European Commission;
(d) the Chairperson of the European Banking Authority;
(e) the Chairperson of the European Insurance and Occupational Pensions Authority;
(f) the Chairperson of the European Securities and Markets Authority.
(fa) six independent persons appointed by the members of the General Board with voting rights on the proposal of the Joint Committee of European Supervisory authorities; the nominees must not be Members of the ESAs and shall be chosen on the basis of their general competence, as well as for their diverse backgrounds in academic fields or other sectors, in particular in small and medium size enterprises, trade-unions or as providers or consumers of financial services; at the time of their nomination, the Joint Committee shall indicate which persons are designated also to serve on the Steering Committee ; in carrying out their responsibilities, the persons nominated shall neither seek nor take instructions from any Government, institution, body, office, entity or private person; they shall refrain from any action incompatible with their duties or the performance of their tasks.
2. One high level representative per Member State of the competent national supervisory authority, in accordance with paragraph 3, shall be Member of the General Board without voting rights.
3. With regard to the representation of national supervisory authorities, the respective high level representatives shall rotate depending on the item discussed, unless the national supervisory authorities have agreed on a common representative.
4. The General Board shall establish the Rules of Procedure for the ESRB.
COMPROMISE F
Article 7
Impartiality
1. When participating in the activities of the General Board and of the Steering Committee or when conducting any other activity relating to the ESRB, the Members of the ESRB shall perform their duties impartially and shall neither seek nor take instructions from Member States.
1a. (new) Members of the General Board who are also members of the General Council of the ECB shall act independently when performing their duties
2. Member States shall not seek to influence the members of the ESRB in the performance of their ESRB tasks.
COMPROMISE G
Article 9
Meetings of the General Board
1. Ordinary plenary meetings of the General Board shall be convened by the Chair of the General Board and shall occur at least four times a year. Extraordinary meetings may be convened at the initiative of the Chair of the General Board or at the request of at least one third of the Members.
2. Each Member shall be present in person at the meetings of the General Board and may not be represented.
3. By way of derogation from paragraph 2, a Member who is prevented from attending the meetings for a prolonged period may appoint an alternate. That Member may also be replaced by a person who has been formally appointed under the rules governing the institution concerned for the substitution of representatives on a temporary basis.
3(a). Where appropriate, high-level representatives from international institutions carrying out other related activities may be invited to attend the meetings of the General Board.
3(b). Where appropriate, and on an ad hoc basis, one high-level representative of a third country, in particular from non-EU European Economic Area/European Free Trade Association states, may be invited to attend meetings of the General Board, depending on the item discussed.
4. The proceedings of the meetings shall be confidential.
COMPROMISE H
Article 10
Voting modalities of the General Board
1. The General Board shall strive for consensus. Where consensus cannot be achieved each Member of the General Board with a voting right shall have one vote. After a period of time, to be defined in the Rules of Procedure of the ESRB, members of the Board may request a vote on a draft warning or a draft recommendation.
2. The General Board shall act by a simple majority of Members present with voting rights. In the event of a tie, the Chair shall have the casting vote.
3. A quorum of two-thirds of the Members with voting rights is needed for any vote to be taken by the General Board. If the quorum is not met, the Chair may convene an extraordinary meeting at which decisions may be taken without regard to the quorum.
3a. By derogation from paragraph 2, a majority of two-thirds of the votes is needed to make a warning or recommendation public.
COMPROMISE I
Article11
Steering Committee
1. The Steering Committee shall be composed of the following:
(a) the Chair of the ESRB;
(b) the first Vice-Chair of the ESRB;
(ba) the ECB Vice-President;
(c) [4] other members of the General Board who are also members of the General Council of the ECB, with regard to the need for a balanced representation of Member States and those within and outside the euro area. They shall be elected by and from among the Members of the General Board who are also members of the General Council of the ECB for a period of four years;
(d) a Member of the European Commission;
(e) the Chairperson of the European Supervisory Authority (Banking);
(f) the Chairperson of the European Supervisory Authority (Insurance and Occupational Pensions);
(g) the Chairperson of the European Supervisory Authority (Securities and Markets);
(h) three of the six independent persons referred to in Article 6 (1)(fa).
Any vacancy for an elected Member of the Steering Committee shall be filled by the election of a new Member by the General Board.
2. Meetings of the Steering Committee shall be convened by the Chair at least quarterly, before each meeting of the General Board. The Chair may also convene ad-hoc meetings.
COMPROMISE J
Article 12
Advisory Scientific Committee
1. The Advisory Scientific Committee shall be composed of the following:
(a) 9 experts with acknowledged competence and guaranteed independence proposed by the Steering Committee, who shall represent a wide range of experiences and skills and who shall be approved by the General Board for a 4-year, renewable mandate;
(b) one representative of the European Supervisory Authority (Banking);
(c) one representative of the European Supervisory Authority (Insurance and occupational Pensions) ;
(d) one representative of the European Supervisory Authority (Securities and Markets) ;
(f) two representatives of the Commission;
(g) one representative of the Economic and Financial Committee.
2. The Chair of the Advisory Scientific Committee shall be appointed by the General Board following a proposal from the Chair of the General Board.
3. The Committee shall perform the tasks referred to in Article 4(5) at the request of the Chair of the General Board.
4. The ESRB Secretariat shall support the work of the Advisory Scientific Committee and the Head of the Secretariat shall participate in the meetings.
4a. In order to provide advice and assistance on issues relevant to the work of the ESRB, the Advisory Scientific Committee shall work closely with the experts' working groups of the ESCB and also draw advice from the ESAs regarding the macroeconomic risk profiles of the various sectors involved in financial services.
4b. Where appropriate, the Advisory Scientific Committee shall organize consultations at an early stage with stakeholders such as market participants, consumer bodies, academic experts, in an open and transparent manner, while keeping in mind the confidentiality requirement.
4c. The Advisory Scientific Committee should be provided with all necessary means in order to successfully complete its tasks, in particular analytical and ICT tools.
COMPROMISE K
Article 13
Other sources of advice
In performing its tasks, the ESRB shall seek, where appropriate, the views of relevant private or public sector stakeholders, particularly, but not exclusively, the stakeholder groups of the ESAs.
COMPROMISE L
Article 15
Collection and exchange of information
1. The ESRB shall provide each European Supervisory Authority with the information on systemic risks necessary for the achievement of its tasks.
2. The European Supervisory Authorities, the national central banks and all relevant authorities in the Member States shall cooperate closely, in compliance with Article 1(1b), with the ESRB and provide the collated information necessary for the fulfilment of its tasks in accordance with Community legislation. This should be done without prejudice to the prerogatives respectively conferred on the Council, the Commission (Eurostat), the ECB, the Eurosystem and the ESCB in the field of statistics and data collection.
3. On the request of the ESRB, the European Supervisory Authorities shall provide information in summary or collective form, such that individual financial institutions cannot be identified. If the requested data are not available to those Authorities or are not made available in a timely manner, national supervisory authorities, national central banks or other authorities of Member States shall provide those data.
4. Where, to the extent that there might be a sustained and severe risk, and which might reasonably concern a specific institution, the information in Article 15(3) is not sufficient for the ESRB to achieve its tasks, the ESRB may address a reasoned request to the European Supervisory Authorities to provide data that are not in summary or collective form.
4a. If information is not made available or in the event of an emergency, the General Board of the ESRB may call on the European Parliament and the Council to act in an appropriate way.
5. The ESRB may request information from an undertaking which engages in financial investment or trading activities on its own account but is not covered by Regulation (EU) No xx/2010 [(EBA)], Regulation (EU) No xx/2009 [ESMA] or Regulation (EU) No xx/2009 [EIOPA]. The ESRB shall inform the Commission and consult the department of the central government administration responsible for legislation on supervision of financial institutions of the relevant Member State in order to ensure that the request is proportionate. The additional obligation of data provision incurred by financial institutions at the request of the ESRB should not lead to any disproportionate increase in administrative burdens.
5a. Staff of the ESRB may attend meetings of the Board of Supervisors of the ESAs , and may ask questions and receive relevant information.
5b. The ESRB shall cooperate with third-country national central banks, supervisory authorities and international forums in order to facilitate the information exchange and establish a mechanism for collecting and exchanging information on systemic risk necessary for the achievement of its tasks.
COMPROMISE M
Article 16
Warnings and recommendations
1. When significant risks to the achievement of the objective in article 3(1) are identified, the ESRB shall provide warnings and, where appropriate, issue recommendations for remedial action, including, where appropriate, for legislative initiatives.
2. Warnings or recommendations issued by the ESRB in accordance with points (c) and (d) of Article 3(2) may be either of a general or specific nature and shall be addressed in particular to the Community as a whole or to one or more Member States, or to one or more of the European Supervisory Authorities, or to one or more national supervisory authorities. Recommendations shall include a specified timeline for the policy response. Recommendations may also be addressed to the Commission in respect of the relevant Community legislation.
3. The warnings or recommendations shall also be transmitted to the European Parliament, the Council, the Commission, the addressees in accordance with paragraph 2, and, where addressed to one or more national supervisory authority, to the European Supervisory Authorities.
4. In order to enhance the awareness of risks in the European economy and to prioritise such risks, the ERSB, in close cooperation with the ESFS, shall elaborate a colour-coded system corresponding to situations of different risk levels. Once the criteria of such classification have been elaborated, its warnings and recommendations will indicate, on a case-by-case basis, and where appropriate, to which category the risk belongs.
COMPROMISE N
Article 16 a (new)
Action in emergency situations
1.In the event of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the European Union, the ESRB in accordance with point (b) of Article 3(2) and Article 10 of each of Regulation (EU) No …/… [EBA], No .../... [ESMA], No …/…[EIOPA], may issue warnings, on its own initiative or following a request by an ESA, the European Parliament, the Council or the Commission, declaring the existence of an emergency situation.
2. As soon as it issues a warning, the ESRB shall simultaneously notify the European Parliament, the Council, the Commission and the European Supervisory Authority, in accordance with article 18(3).
As soon as possible after the notification, the Chair of the ERSB and the competent Commissioner should be heard by the competent committee of the European Parliament.
3. The ESRB shall review the warning referred to in paragraph 1 upon its own initiative or following a request by a European Supervisory Authority, the Council, the European Parliament or the Commission.
COMPROMISE O
Article 17
Follow-up of the ESRB recommendations
1. Where a recommendation referred to in letter (d) of Article 3(2) is addressed to one or more Member States, one or more European Supervisory Authorities, or one or more national supervisory authorities, the addressees shall communicate the actions undertaken in response to the recommendations to the ESRB or explain why they have not acted. The European Parliament, the Council and, where relevant, the European Supervisory Authorities shall be informed.
2. If the ESRB decides that its recommendation has not been followed or it is not satisfied on how the addressees have followed up the recommendations, and that the addressees have failed to provide adequate justifications, it shall inform the European Parliament, the Council, the Commission and, where relevant, the European Supervisory Authorities concerned.
2a. Where a recommendation has been made public and has not been followed and the addressees of the recommendation have failed to explain their inaction, the European Parliament may invite the addressees to be questioned by the competent Committee of the European Parliament.
COMPROMISE P
Article 18
Public warnings and recommendations
1. In accordance with Article 10(3a), the General Board of the ESRB shall decide on a case-by-case basis whether a warning or a recommendation should be made public. . By derogation to Article 10(2), a majority of two-thirds of the votes is needed to make a warning or recommendation public.
2. Where the General Board of the ESRB decides to make a warning or recommendation public, it shall inform the addressee(s) in advance.
2a. The addressees of warnings and recommendations released by European Systemic Risk Board should be provided with the rights of making public its views and reasoning as well in response to the warning and recommendation published by the ESRB.
3. Where the general Board of the ESRB decides not to make a warning or a recommendation public, the addressee and where appropriate, the European Parliament, the Council and the European Supervisory Authorities as well as the national supervisory authorities, shall take all the measures necessary for the protection of their confidential nature.
3a. Any data on which the General Board of the ESRB bases its analysis before issuing a warning or a recommendation shall be made public for analysis in an appropriately anonymous form. In the event of confidential warnings, information shall be made available within an appropriate period of time, to be defined in its Rules of Procedure.
COMPROMISE Q
Article 19
Accountability and reporting obligations
1. The ESRB shall report at least annually to the Council and the European Parliament marking the publication of its annual report, more frequently in the event of widespread financial distress. This report should be made in a different context from the Monetary Dialogue between the European Parliament and the President of the European Central Bank.
1a. The reports referred to in this Article shall be made available to the public.
2. The ESRB shall also examine specific issues at the invitation of the European Parliament, the Council or the Commission.
2a. The President of the ESRB and the other members of the Steering Committee may, at the request of the European Parliament, be heard by the competent Committees of the European Parliament.
COMPROMISE R
Article 20
Review clause
The European Parliament and the Council shall examine this Regulation on the basis of a report from the Commission three years after its entry into force and shall determine whether the missions and organisation of the ESRB need to be reviewed after having received an opinion from the ECB.
The report should assess, in particular, whether:
- the architecture of the ESFS needs to be simplified and reinforced, in order to increase the coherence between the macro and the micro levels as well as between the ESAs;
- the regulatory powers of the ESAs need to be increased ;
- the evolution of the ESFS is consistent with that of the global evolution;
- there is sufficient diversity and excellence within the ESFS ;
- accountability and transparency in relation to publication requirements are adequate.
COMPROMISE S
Recital 8
(8) The ESRB should, where appropriate, issue and make public warnings and recommendations of a general nature concerning the Community as a whole, individual Member States or groups of Member States, with a specified timeline for the relevant policy response. Where such warnings or recommendations are addressed to individual or a group of Member States, the ESRB may also propose appropriate support measures. Where appropriate, the ESRB should declare the existence of an emergency situation.
COMPROMISE T
Recital 9
(9) In order to increase their weight and legitimacy, such warnings and recommendations should be transmitted through the European Parliament, the Council, the Commission, the addresses, and, where appropriate, the European Supervisory Authority (ESA).
COMPROMISE U
Recital 16
(16) The interconnectedness of financial institutions and markets implies that the monitoring and assessment of potential systemic risks should be based on a broad set of relevant macro-economic and micro-financial data and indicators.
These systemic risks include risks of disruption to financial services caused by a significant impairment of all or parts of the financial system and have the potential to have serious negative consequences for the internal market and the real economy. In this context, any type of financial institution and intermediary, market, infrastructure and instrument has the potential to be systemically significant.
The ESRB should therefore have access to all the information necessary to perform its duties while preserving the confidentiality of these data as required.
14 février, Le Monde,
