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The revision of the rules on capital requirements for banks aims at enhancing stability, reducing risk exposure and improving supervision of banks that operate in more than one EU country.

UNI-Europa Finance welcomes the revision of the rules on capital requirement. It is clear that all loans and credit liabilities must be backed by adequate equity. High risks must be supported by higher capital adequacy ratios to avoid destabilisation of markets as with the recent turmoil.

UNI-Europa Finance equally welcomes the initiatives to improving cross-border financial supervision and cooperation and the proposal of establishing colleges of supervisors for each cross-border banking group. Banking groups operating across borders must be subject to a thorough financial supervision with a profound exchange of information between national supervisory authorities in the countries the group operates in.

However, the role and functioning of these suggested colleges of supervisors could be developed. UNI-Europa finance sees a role for the colleges in the internal risk assessment of firms, also looking into the risk impact of internal operating procedures like the remuneration incentives, sales targets, working conditions etc. This requires a close dialogue among supervisory authorities, management, UNI Finance, its affiliates and employee representatives in the company.

The perspective of strengthening the role of the colleges of supervisors looks promising with the recently issued recommendations from the de Larosière High Level Expert Group on supervision of the finance sector.

The revision of the Capital Requirement Directive is currently being discussed in the European Parliament. The final vote on the revised Directive will take place at the Parliament’s plenary session on 21 April.