MEPs have endorsed the proposed directive on capital requirements with the proviso that they have the right of recall on the details.
The European Parliament’s Economic and Monetary Affairs Committee, meeting on 12 July, broadly agreed on the proposals for a capital requirements directive, approving a report by Alexander Radwan. The aim of the measure is to transpose into EU law rules on how much capital banks and credit institutions should be required to hold in reserve. The rules, known as Basel II, were agreed at international level through the Bank for International Settlements in June 2004.
However, procedures whereby Parliament would have a right to ‘call back’ any future detailed implementation measures, decided by expert committees under the comitology procedure, were to be contained in the EU Constitution. Since the future of the Constitution is now so uncertain, MEPs stipulated that alternative arrangements for call back would have to be reached before they could fully endorse the proposed implementing procedures.
Industry federations have welcomed the Parliament’s agreement but some are concerned at the delay and rigidity that would result from any possible deletion of the comitology provisions.