Capital requirements for banks: trading book issues and re-securitisations (CRD III)
This legislation was one of the first major steps taken after the crisis to regulate financial transactions.
Following the collapse of the U.S. bank Lehman Brothers, the Commission proposed several measures to tighten risk management by financial institutions.
The text of the Directive mainly concerned re-packaged or re-sold loans and the proper evaluation of assets in a bank's trading book.
What was the Greens' position?
The Greens believe that stricter regulation of banks is essential, both to make them safer in the event of market turbulence and to ensure that they once again serve the real economy.
Our analysis suggests that regulating bankers' salaries can serve as a powerful incentive for them to adopt a less risky and more long-term approach to investment.
We think that some financial products, like re-packaged loans, should be banned because they make markets too complex and overly increase risk.
Banks that received financial support to prevent their collapse should be even more tightly regulated, to reduce risks in their trading book and thus lower the chances of them having to ask for a further bailout.
Did other MEPs accept the Greens' position?
The Greens succeeded in fixing rules on bankers' salaries. As a result, cash bonuses were sharply reduced and around half of them will only paid out after investments have proved successful, instead of immediately.
One half of each bonus must be paid in the form of 'contingent capital', with the money being paid to creditors if the financial institution in question goes bankrupt.
Initially we merely succeeded in introducing the principle of a salary cap in relation to fixed salaries, but in subsequent legislation we even managed to introduce a fixed percentage.
Which points did the Greens lose?
The Greens were unable to achieve progress on the issue of re-packaged loans.
As a result, financial products can still be designed in ways that are so complex that nobody can accurately estimate their underlying risk.
This is probably due to fierce lobbying by the financial industry and the susceptibility of many members of the EPP, ALDE, EFD and ECR groups to be swayed by the lobbyists' arguments.
Procedure:Ordinary legislative procedure
Lead MEP:Arlene McCarthy (S&D)
Green MEP responsible:Philippe Lamberts
Staff contact:Francisco Padilla (Email)
Outcome of the vote
Below you find the results of the final vote in plenary. How did the political groups vote? What about national delegations? And what was the position of your MEP?