Changes from report parliamentary committee draft to plenary report

Change 9

Removed7. Notes that the average Common Equity Tier 1 ratio has remained at high levels, at 15.81 %;

Added19. Recalls that the Banking Package contains a high number of mandates to the European Banking Authority; calls on the European Banking Authority to respect these mandates;

Added20. Notes that even within the existing regulatory framework the banking sector has shown its resilience during the market events of recent years, and that the average Common Equity Tier 1 ratio has remained at high levels, at 15.81 %;

Change 10

Removed9. Notes the lack of progress on the proposal for a directive on credit servicers, credit purchasers and the recovery of collateral, which intends to provide banks, under certain conditions, with a mechanism for accelerating the value recovery from secured loans via extrajudicial enforcement of procedures in order to further develop secondary markets for non-performing loans;

Added22. Notes the varying levels of exposure to non-performing loans and recalls that there are Member States which have exposure levels in the order of 1 % or even lower, while other Member States have exposure levels exceeding 4 %; considers that efforts to reduce European banks’ exposure to this type of loan should continue as good risk management practice;

Removed10. Notes that the current levels of banking sector profitability may provide an opportunity for some Member States to implement additional targeted increases in macroprudential buffers and help to preserve banking sector resilience;

Added23. Highlights the fact that adverse macroeconomic conditions, geopolitical headwinds and the rapid development of deferred payment services may lead to a deterioration in asset quality and affect the level of non-performing loans in the future; highlights, therefore, the importance of prudent risk management and appropriate provisioning;

Removed11. Welcomes the creation of the new Authority for Anti-Money Laundering and Countering the Financing of Terrorism;

Added24. Notes that the current levels of banking sector profitability may provide an opportunity for an increase in macroprudential buffers and help to preserve banking sector resilience; invites the Commission to further explore this option and carefully evaluate how to revise the macroprudential framework, taking into consideration the potential impact on capital requirements and bearing in mind a level playing field with other jurisdictions;

Change 11

Changed13.31. WelcomesRecalls that the objectiveposition ofadopted theby proposalParliament in April 2024 on the crisis management and deposit insurance offramework ensuringensures a more consistent approach across all Member States to the application of resolution tools and deposit protection to enhance financial stability, taxpayer protection and depositor confidence; notes that small banks dohave notsome posespecificities anythat risksmay warrant a proportionate approach; stresses that European and national competent authorities should have at their disposal appropriate and sufficient tools to respond effectively to bank failures and safeguard financial stability;stability, and that banks need to operate in an effective regulatory environment that fosters their development;

Change 12

Changed14.32. Highlights the importance of preserving shareholders’ and creditors’ primary responsibility for bearing losses in the event of a bank’s failure,failure; stresses that resorting to using taxpayers’ money must be avoided, which is still a key lesson learned from the global financial crisis; stresses that the bail-in of shareholders and creditors must remain the main source for resolution financing before any recourse is made to industry-funded sources;

Change 13

Changed15.33. Recalls that a sufficient minimum requirement for own funds and eligible liabilities (MREL) is crucial for a credible resolution framework and for ensuring that resolution authorities have sufficient flexibility to effectively apply the resolution strategies needed in a specific crisis situation; warnsunderlines that reductions in this minimum requirement,requirement resultingshould frombe specificsufficient to effectively implement any of the resolution strategies included in a bank’s resolution plan; recalls that the resolution planningframework phase,should couldavoid hamperundue increases in MREL calibration and disproportionate contributions to the resolvabilitySingle ofResolution banks;Fund;

Change 14

Removed16. Highlights that liquidity support in resolution should not be based on any additional public funds; notes that any reliance on taxpayer money for the resolution of banks should be avoided;

Added34. Stresses that if a bank’s eligible liabilities are issued to non-EU investors, the write-down or conversion of these liabilities should be enforceable with full certainty to safeguard the effective application of resolution tools;

Removed17. Welcomes the ‘SRM Vision 2028’ strategic review initiated by the SRB to set its long-term goals, address new challenges and further strengthen collaboration with the national resolution authorities and other stakeholders;

Added35. Notes that any reliance on taxpayer money for the resolution of banks, including for liquidity support, should be avoided, in keeping with the principles of fiscal and social responsibility and market discipline;

Added36. Recalls that banks need to continue to meet their obligations and perform their key functions after the implementation of a resolution decision;

Added37. Recalls the importance of clarifying the role of the ECB as liquidity provider in resolution, paying due attention to appropriate guarantees and the ECB’s mandate;

Change 15

Changed20.42. Highlights the need for additional efforts to ensure full resolvability for all banks falling under the scope of resolution; recalls that achieving resolvability cannot be considered a ‘moving target’ and therefore calls for more standardisation and harmonisation of the resolvability assessment; recalls, nonetheless, the important role played by national resolution authorities in the assessment of resolvability;

Change 16

Changed21.43. Underlines the fact that the Commission’s proposal to establish a European deposit insurance scheme was published back in 2015,2015 and that the landscape has changed significantly since then;

Change 17

Removed22. Notes that national deposit guarantee schemes have been introduced successfully and have proved their functionality in a number of cases; underlines the need to take specific national characteristics into account and to preserve the well-functioning systems for smaller banks that are already in place in some Member States;

Added44. Recalls that the position of its Committee on Economic and Monetary Affairs on a European deposit insurance scheme was adopted in April 2024; notes that that position deviates from the Commission’s 2015 proposal and adopts a new approach; is waiting for, and encourages the Council to move forward with, the negotiations on a European deposit insurance scheme;

Removed23. Underlines the necessity to take the specifics of institutional protection schemes into account and preserve their functioning;

Added45. Notes that national deposit guarantee schemes were introduced successfully and have proved their functionality in a number of cases; underlines the need to take specific national characteristics into account and to preserve the well-functioning systems for smaller banks that are already in place in some Member States, such as institutional protection schemes, in a way that ensures a level playing field across the BU;

Removed24. Takes note of the Eurogroup statement of 16 June 2022 on the future of the BU;

Removed25. Recalls that breaking the link between bank and sovereign risk remains a challenge for the BU; emphasises that the risk on banks’ balance sheets can be reduced further through the regulatory treatment of sovereign exposures;