(1)

On 29 June 2012, the Euro area Heads of State or Government have called on the Commission to present proposals to provide for a single supervisory mechanism involving the European Central Bank (ECB). The European Council in its conclusions of 29 June 2012 invited the President of the European Council to develop, in close collaboration with the President of the Commission, the President of the Eurogroup and the President of the ECB, a specific and time-bound road map for the achievement of a genuine Economic and Monetary Union, which includes concrete proposals on preserving the unity and integrity of the Single Market in financial services. ▌

(2)

The provision for a single supervisory mechanism is the first step towards the creation of a European banking union, underpinned by a true single rulebook for financial services and new frameworks for deposit insurance and resolution ▌.

(3)

In order to provide for the single supervisory mechanism, Council Regulation (EU) No …/… [127(6) Regulation] confers specific tasks on the ECB concerning policies relating to the prudential supervision of credit institutions in the Member States whose currency is the euro. Other Member States may enter in a close cooperation with the ECB. ▌

(4)

The conferral of supervisory tasks to the ECB in the banking sector for part of the Member States of the Union should not in any way hamper the functioning of the internal market in the field of financial services. The European Banking Authority (EBA) should therefore maintain its role and retain all its existing powers and tasks: it should continue developing and contributing to the consistent application of the single rulebook applicable to all Member States and enhancing convergence of supervisory practices across the whole Union.

(4a)

It is critical that the banking union should contain democratic accountability mechanisms.

(4b)

When carrying out the tasks conferred on it, and without prejudice to the objective to ensure the safety and soundness of credit institutions, EBA should have full regard to the diversity of credit institutions and their size and business models, as well as the systemic benefits of diversity in the European banking industry.

(4c)

In order to promote best supervisory practices in the internal market, it is fundamental that the single rulebook is accompanied by a European supervisory handbook on the supervision of financial institutions, drawn up by EBA in consultation with competent authorities. The Supervisory Handbook should identify the best practices across the Union as regards supervisory methodologies and processes so that core international and Union principles are adhered to. The handbook should not take the form of legally binding acts and should not restrict judgement led supervision. It should cover all matters which are within the remit of EBA, including to the extent applicable the areas of consumer protection and efforts against money laundering. It should set out metrics and methodologies for risk assessment, identification of early warnings and criteria for supervisory action. Competent authorities should use the handbook. The use of the handbook should be considered as a significant element in the assessment of the convergence of supervisory practices and for the peer review referred to in this Regulation.

(4d)

Requests for information by EBA should be duly justified and reasoned. Objections as to whether a specific request for information by EBA complies with the requirements set out in this Regulation should be raised in accordance with the relevant procedures. The raising of such an objection should not absolve the addressee of the request from providing the information. The Court of Justice of the European Union should be competent to decide, in accordance with the procedures set out in the Treaty, whether a specific request for information by EBA complies with the requirements set out in this Regulation.

(4e)

The possibility for EBA to request information from financial institutions subject to the conditions set out in this Regulation should relate to any information to which the financial institution has legal access, including information held by persons remunerated by the relevant financial institution for carrying out relevant activities, audits provided to the relevant financial institution by external auditors, copies of relevant documents, books and records.

(4f)

The single market and the cohesion of the Union should be secured. With regard to this, concerns such as governance and voting arrangements in EBA should be considered carefully and equal treatment of Member States participating in the Single Supervisory Mechanism (SSM) and other Member States should be guaranteed.

(4 g)

Bearing in mind that EBA, in which all Member States participate with equal rights, was established with an aim to develop and contribute to the consistent application of the single rulebook and to enhance the coherence of supervisory practices within the Union and given the establishment of the single supervisory mechanism with a leading role for the ECB, EBA should be equipped with adequate instruments, which should enable it to efficiently perform its entrusted tasks concerning the integrity of the single market.

(5)

In view of the supervisory tasks conferred on the ECB by Council Regulation (EU) No …/… [127(6) Regulation], EBA should be able to carry out its tasks also in relation to the ECB in the same manner as in relation to the other competent authorities. In particular, existing mechanisms for settlement of disagreements and actions in emergency situations should be adjusted accordingly to remain effective. ▌

(5a)

In order to be able to perform its facilitating and coordinating role in emergency situations, EBA should be fully informed of any relevant developments, and should be invited to participate as an observer in any relevant gathering by the relevant competent supervisory authorities. This includes the right to speak or to make any other contributions.

(6)

In order to ensure that interests of all Member States are adequately taken into account and to allow for the proper functioning of EBA with a view to maintaining and deepening the internal market in the field of financial services, the voting modalities within the Board of Supervisors should be adapted ▌.

(7)

Decisions concerning breaches of Union law and settlement of disagreements should be examined by an independent panel composed of voting members of the Board of Supervisors which do not have any conflicts of interest, appointed by the Board of Supervisors. The decisions proposed by the panel to the Board of Supervisors should be ▌adopted ▌by a simple majority ▌of the members of the Board of Supervisors from Member States participating in the SSM and a simple majority of its members from Member States that do not participate in the SSM.

(7a)

Decisions concerning actions in emergency situations should be adopted by a simple majority of the Board of Supervisors, which should include a simple majority of its members from Member States participating in the SSM and a simple majority of its members from Member States that do not participate in the SSM.

(7b)

Decisions concerning the acts specified in Articles 10 to 16 of Regulation (EU) No 1093/2010 and measures and decisions adopted under the third subparagraph of Article 9(5) and Chapter VI of that Regulation should be adopted by a qualified majority of the Board of Supervisors which should include a simple majority of its members from Member States participating in the SSM and a simple majority of its members from Member States that do not participate in the SSM.

(8)

▌EBA should develop rules of procedure for the panel that ensure its independence and objectivity.

(9)

The composition of the Management Board should be balanced and proper representation of Member States not participating in the SSM should be ensured.

(9a)

Appointments of the members of EBA internal bodies and committees should ensure a geographical balance among Member States.

(10)

In order to ensure the proper functioning of EBA and adequate representation of all Member States, the voting modalities, the composition of the Management Board, and the composition of the independent panel should be monitored, and reviewed after an appropriate period of time taking into account any experience gained and further developments.

(10a)

No Member State or group of Member States should be discriminated against, directly or indirectly, as a venue for financial services.

(10b)

EBA should be provided with the appropriate financial and human resources, in order to adequately fulfil any additional tasks assigned to it under this Regulation. For this purpose, the procedure for the establishment, implementation and control of its budget as set out in Articles 63 and 64 of Regulation (EU) No 1093/2010 should take due account of these tasks. EBA should ensure that the best standards of efficiency are met.

(11)

Since the objectives of this Regulation, namely ensuring a high level of effective and consistent ▌prudential regulation and supervision across all Member States , protecting the integrity, efficiency and orderly functioning of the internal market and maintaining the stability of the financial system, cannot be sufficiently achieved by the Member States and can, therefore, by reason of the scale of the action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives,

-1.

Article 1 is amended as follows:

-1a.

in Article 2(2), point (f) is replaced by the following:

-1b.

Article 3 is replaced by the following:

‘Article 3

Accountability of the Authorities

The Authorities referred to in Article 2(a) to (d) shall be accountable to the European Parliament and the Council. The ECB shall be accountable to the European Parliament and the Council for the exercise of its supervisory tasks conferred upon it by Regulation [127(6) TFEU Council Regulation] in accordance with that Regulation.’;

1.

in Article 4(2), point (i) is replaced by the following:

(3)  OJ L …, ….., p….’;"

1a.

Article 8 is amended as follows:

1b.

Article 9 is amended as follows:

2.

Article 18 is amended as follows:

3.

in Article 19 (1), the first subparagraph is replaced by the following ▌:

‘1.     Without prejudice to the powers laid down in Article 17, where a competent authority disagrees about the procedure or content of an action or inaction of another competent authority in cases specified in the acts referred to in Article 1(2), the Authority, at the request of one or more of the competent authorities concerned, may assist the authorities in reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4 of this Article.’;

▌

3a.

the following Article is inserted after Article 20:

‘Article 20a

Convergence of Pillar 2

The Authority shall promote, within the scope of its powers, the convergence of the supervisory review and evaluation process (“Pillar 2”) in accordance with Directive …/… EU [CRD4] in order to bring about strong supervisory standards in the Union.’;

3b.

Article 21 is amended as follows:

3c.

in Article 22, the following paragraph is inserted after paragraph 1:

‘1a.     At least once per year the Authority shall consider the appropriateness of carrying out Union-wide assessments of the resilience of financial institutions in accordance with Article 32 and shall inform the European Parliament, the Commission and the Council of its considerations. Where such assessments are carried out the Authority shall, where it deems it relevant or appropriate provide disclosures of the results for each participating financial institution.’;

3d.

in Article 25, paragraph 1 is replaced by the following:

‘1.     The Authority shall contribute to and participate actively in the development and coordination of effective, consistent and up to date recovery and resolution plans for financial institutions. The Authority shall also where provided for in the legislative acts referred to in Article 1(2) assist in developing procedures in emergency situations and preventive measures to minimise the systemic impact of any failure.’;

3e.

in Article 27(2), the first subparagraph is replaced by the following:

‘2.     The Authority shall provide its assessment of the need for a system of coherent, robust and credible funding mechanisms, with appropriate financing instruments linked to a set of coordinated crisis management arrangements.’;

3f.

in Article 29(2), the following subparagraph is added:

‘For the purpose of building a common supervisory culture, the Authority shall develop and maintain up to date, taking into account, inter alia, changing business practices and business models of financial institutions, a European supervisory handbook on the supervision of financial institutions for the whole Union. The European supervisory handbook shall set out supervisory best practice in methodologies and processes.’;

3 g.

in Article 30, paragraph 3 is replaced by the following:

‘3.     On the basis of a peer review, the Authority may issue guidelines and recommendations pursuant to Article 16. In accordance with Article 16(3), the competent authorities shall endeavour to follow those guidelines and recommendations. When developing draft regulatory technical or implementing technical standards in accordance with Articles 10 to 15 the Authority shall take into account the outcome of the peer review, along with any other information acquired in the conduct of its tasks, in order to ensure convergence on the standards and practices of the highest quality.

3a.     The Authority shall address an opinion to the Commission whenever the peer review or any other information acquired in the conduct of its tasks shows that a legislative initiative is necessary to ensure the further harmonisation of prudential definitions and rules.’;

3h.

in Article 31, the second subparagraph is replaced by the following:

‘The Authority shall promote a coordinated Union response, inter alia, by:

3i.

Article 32 is amended as follows:

4.

▌Article 35 is replaced by the following:

‘ Article 35

Collection of information

1.   At the request of the Authority, the competent authorities shall provide the Authority with all the necessary information in specified formats to carry out the duties assigned to it by this Regulation, provided that they have legal access to the relevant information ▌. The information must be accurate, coherent, complete and timely.

2.   The Authority may also request information to be provided at recurring intervals and in specified formats or comparable templates approved by the Authority . Such requests shall, where possible, be made using common reporting formats.

3.   Upon a duly justified request from a competent authority, the Authority shall provide any information that is necessary to enable the competent authority to carry out its duties, in accordance with the professional secrecy obligations laid down in sectoral legislation and in Article 70.

4.     Before requesting information in accordance with this Article and in order to avoid the duplication of reporting obligations, the Authority shall take account of any relevant existing statistics produced and disseminated by the European Statistical System and the European System of Central Banks.

5.     Where information is not available or is not made available by the competent authorities in a timely fashion, the Authority may address a duly justified and reasoned request to other supervisory authorities, to the ministry responsible for finance where it has at its disposal prudential information, to the national central bank or to the statistical office of the Member State concerned.

6.     Where complete or accurate information is not available or is not made available under paragraph 1 or 5, in a timely fashion, the Authority may request information, by way of a duly justified and reasoned request, directly from:

The addressees of such a request shall provide the Authority with clear, accurate and complete information promptly and without undue delay.

The Authority shall inform the relevant competent authorities of requests in accordance with this paragraph and with paragraph 5.

At the request of the Authority, the competent authorities shall assist the Authority in collecting the information.

7.     The Authority may use confidential information received pursuant to this Article only for the purposes of carrying out the duties assigned to it by this Regulation.

8.     Where the addressees of a request in accordance with paragraph 6 do not provide clear, accurate and complete information promptly, the Authority shall inform the ECB when applicable and shall inform the relevant authorities in Member States concerned which, subject to national law, shall cooperate with the Authority with a view of ensuring full access to the information and to any originating documents, books or records to which the addressee has legal access in order to verify the information. ’;

4a.

Article 36 is amended as follows:

4b.

Article 37 is amended as follows:

4c.

Article 40 is amended as follows:

5.

Article 41 is amended as follows :

6.

in Article 42, the following paragraph is added:

‘The first and second paragraphs are without prejudice to the tasks conferred upon the ECB by Regulation (EU) No …/… [127(6) TFEU Council Regulation].’;

7.

Article 44 is amended as follows:

8.

in Article 45(1), the third subparagraph is replaced by the following:

‘The term of office of the members elected by the Board of Supervisors shall be two-and-a-half years. That term may be extended once. The composition of the Management Board shall be balanced and proportionate and shall reflect the Union as a whole. The Management Board shall include at least two representatives from Member States which are not participating Member States in accordance with Regulation [127(6) TFEU Council Regulation] nor have entered into close cooperation with the ECB in accordance with that Regulation. Mandates shall be overlapping and an appropriate rotating arrangement shall apply.’;

8a.

the following Article is inserted after Article 49:

‘Article 49a

Expenses

The Chair shall make public meetings held and hospitality received. Expenses shall be recorded publicly in accordance with the staff regulation of officials of the European Communities.’;

8b.

the following Article is inserted after Article 52:

‘Article 52a

Expenses

The Executive Director shall make public meetings held and hospitality received. Expenses shall be recorded publicly in accordance with the staff regulation of officials of the European Communities.’;

8c.

in Article 63, paragraph 7 is deleted.

8d.

Article 81(3) is replaced by the following:

‘3.     Concerning the issue of direct supervision of institutions or infrastructures of pan-European reach and taking account of market developments, the stability of the internal market and the cohesion of the Union as a whole, the Commission shall draw up an annual report on the appropriateness of entrusting the Authority with further supervisory responsibilities in this area.’;

8e.

the following Article is inserted after Article 81:

‘Article 81a

Review of voting arrangements

As from the date on which the number of Member States that are not participating Member States reaches four, the Commission shall review and report to the European Parliament, the European Council and the Council on the operation of the voting arrangements described in Articles 41 and 44, taking into account any experience gained since the entry into force of this Regulation.’;

(b)

the composition of the Management Board; and

(c)

the composition of the independent panel preparing decisions for the purposes of Articles 17 and 19.