Principles and practices of EU external representation - Asser Institute

CLEER WORKING PAPERS 2012/5Wouters, Van Kerckhoven and Odermattsector. 106 The Commission states that this proposal ‘translates in Europe internationalstandards on bank capital agreed at the G20 level (most commonlyknown as the Basel III agreement). Europe will be leading on this matter,applying these rules to more than 8000 banks, amounting for 53% of globalassets.’ 107 So far, however, the CRD, one of the most significant – and alsopolitically sensitive – regulatory measures proposed since the financial crisis,is moving very slowly through the legislative process. On 2 May 2012 anECOFIN meeting which sought to come to an agreement on new rules failedto find a compromise solution. The United Kingdom has been critical of theCommission proposal, and wants greater flexibility given to national regulators.Systemically important financial institutions (SIFIs)At Cannes, G20 Leaders pledged that they were ‘determined to make sure thatno financial firm is ”too big to fail” and that taxpayers should not bear the costsof resolution.’ G20 Leaders at Pittsburgh committed to act together to ‘[…].create more powerful tools to hold large global firms to account for the risksthey take’ 108 and to ‘develop resolution tools and frameworks for the effectiveresolution of financial groups to help mitigate the disruption of financial institutionfailures and reduce moral hazard in the future.’ 109 “Too big to fail” institutions,or Systematically Important Financial Institutions (SIFIs) are seen as anotherarea of reform needed to adequately respond to the crisis, and one that requiresco-ordinated reforms in different states. On 4 November 2011 the FSB delivereda set of ‘Policy Measures to Address Systemically Important Financial Institutions’at the request of the G20. In response to these developments, the EuropeanCommission is developing an EU-wide crisis management framework 110to address SIFIs. This work has been done in connection with the work onSIFIs by the Committee on Payment and Settlement Systems (CPSS) andIOSCO. The Commission is set to present legislative proposals and states thatthey ’will be accompanied by an impact assessment, and will complete theCommission’s implementation of the principal G20 reforms in the area of financialregulation.’ 111 As yet, the Commission has not formally adopted a legislative106 European Commission, Proposal for a Directive of the European Parliament and theCouncil on the access to the activity of credit institutions and the prudential supervision of creditinstitutions and investment firms and amending Directive 2002/87/EC of the European Parliamentand of the Council on the supplementary supervision of credit institutions, insurance undertakingsand investment firms in a financial conglomerate, COM (2011) 453.107 European Commission, Commission wants stronger and more responsible banks inEurope, 20 July 2011. Press Release.108 G20 Leaders supra note 1 para. 13.109 Ibid.110 Communication from the Commission to the European Parliament, The Council, The EuropeanEconomic and Social Committee, the Committee of the Regions and the European CentralBank, An EU Framework for Crisis Management in the Financial Sector, Brussels, 20.10.2010:“The Commission is helping to shape the work of the FSB and the G20, and is also closely monitoringother international developments.” p.3.111 Communication from the Commission to the European Parliament, The Council, The EuropeanEconomic and Social Committee, the Committee of the Regions and the European Central140