Capital Requirements Directive (CRD)
The CRD continues its progress through Parliament amid rows over call-back procedures (see our CRD LinksDossier). Assuming these are solved, the final draft is due for agreement at the EcoFin Council on 11 October 2005.
Banking consolidation
‘Cross-border banking and insurance’ is an agenda item for the 8 November EcoFin Council. Facilitation of cross-border banking and mergers is caught up in the issue of supervision (which supervisor from which country should look after cross-border banking groups; should there be a lead supervisor (see EurActiv 30 June 2005). Another major debate is over the use of Article 16 of the CRD. This provides that in the event of a cross-border merger, bank supervisors in the member state of the target company must give their blessing. The question raised: is this provision being used illegitimately to protect national banking markets?
MiFID
The detail on implementation of MiFID (the markets in financial services directive) is being thrashed out with the help of CESR (Committee of European Banking Regulators). As the complexity of the new legislation has led to severe jitters among member states and industry, the Commission has relented on timing. It extended the deadline for implementation by member states to 30 October 2006 and has given industry until April 2007 to adapt their procedures to the new regime.
Clearing and settlement
Will there be legislation or not? The Commission is still not saying (see EurActiv 3 Feb 2005). Most commentators agree that there is dire need for a streamlining of procedures – but how should this be done? Industry says: no more regulation, please (see EurActiv 20 July 2005).
Mortgage credit
Another will-there-or-won’t-there be legislation issue. The Commission is undecided and the pros and cons are raised in a 22 July green paper. A cost benefit study will come out in August, consultation is open to November and a public hearing will be held in December 2005 (see EurActiv 22 July).
Asset management
The UCITS Directive, dealing with investment funds sold across the European union, is under review but no further regulation is expected. A green paper published on 14 July opened debate on how to streamline usage of the Directive across member states, through guidelines and simplification of procedures. The debate will be open until November 2005 (see EurActiv 20 July 2005).
Consumer credit
The consumer credit directive, adopted in 1987 is unanimously agreed to be out of date. Attempts to update it, however, have foundered on divergent member state consumer protection views and have dissolved into rows. The Commission produced a modified proposal in October 2004 but under the new Commission, responsibility for the dossier, originally with the internal market directorate-general, was switched to consumer affairs. It is expected that a further new proposal will come out in the autumn.
Retail Markets
A new framework for single payments is expected to be published after the summer break. (See related dossier for current framework). This will identify ways in which payment systems across the Union can be streamlined. The Commission may push for improvement on the timetable set by the European Payments Council , which does not foresee full integration before 2010 (see also EurActiv 4 April 2005).
Terrorism
Increasingly, measures to combat the financing of terrorism are imposing burdens on the financial sector. The third money laundering directive, extended to include transactions which may involve terrorist financing, is to be formally adopted by September 2005. The onus on professionals dealing with clients’ money – accountants, lawyers, bankers – to report any suspicious transactions to the authorities will be increased.
Also, announced on 26 July, is a proposed regulation implementing the anti-terrorism recommendations of the international Financial Action Task Force on money laundering. To facilitate the tracing of terrorist funds, it will compel banks to transfer details of the name, address and account number of a sender of moneys into and out of the EU along with the transfer itself. The regulation is due for adoption by December 2005 and transposition by January 2007.
Lamfalussy
The good news is that much of the above legislation will be nursed through using the Lamfalussy process, following its extension to cover banking, insurance, occupational pensions and UCITS. On 25 July 2005 the EU institutions agreed to re-establish the inter-institutional monitoring group to oversee this process.
