Commission's reform package
Content
Article from the Annual Report 2016 of the BaFin
Banks
Since the start of the financial crisis in 2007/2008, banking regulation has been significantly tightened – at both the global and the European level. In 2016, the European Commission dealt intensively with the issue of whether post-crisis regulation is adequate and at the same time proportionate. At the end of November 2016, it presented a comprehensive package of reform proposals intended to further complete the regulation of the financial markets and also improve proportionality at the same time (see info box "Planned amendments").
Planned amendments
The European Commission aims to reduce risks and thus increase financial stability and strengthen the trust in the European banking sector. To this end, the Commission intends to make additions in particular to the Capital Requirements Regulation (CRR) and the Capital Requirements Directive IV (CRD IV) as well as the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation (SRMR).
Capital markets
The Capital Markets Union project, which the European Commission launched with an action plan in 2015 and which is intended to create a single EU market for capital, made further progress in 2016. A number of the 33 actions and individual measures contained in the Commission's action plan are about to be concluded. The Commission is expected to publish a mid-term review of the project in June 2017, based on a public consultation process running until March. All the planned actions are to be finalised by 2019.
In particular, the Commission aims at greater involvement of institutional and private investors in the long-term financing of companies and infrastructure projects. In addition to traditional bank financing, capital-market-based financing instruments and access to equity and risk capital are to be promoted. The aim is to invigorate the European securitisation market and to make it more robust, in particular by introducing simple, transparent securitisations (STS) as a new product. Deeper, more closely integrated and more liquid markets are intended to provide a larger portfolio of financing sources to the real economy and expand the investment horizon for investors. The project is a key component of the Investment Plan initiated by the European Commission in order to create more jobs and generate growth in the EU.
Germany provides constructive feedback and support on the action plan. Elisabeth Roegele, Chief Executive Director of Securities Supervision, believes that efforts will have to be made in many areas to ensure that all measures, which might be amended or expanded in the light of fresh challenges, are completed on schedule. "But if the outcome is the promotion of an investment-friendly environment, these efforts should ultimately pay off – for investors as well as for companies that require capital in order to expand and create jobs."
