Official Journal of the European Union
DIRECTIVE 2009/111/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 September 2009
amending Directives 2006/48/EC, 2006/49/EC and 2007/64/EC as regards banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO PEAN UNION,
Having regard to the Treaty establishing the European Commu nity, and in particular Article 47(2) thereof,
Having regard to the proposal from the Commission,
into national law by 15 December 1979. Those time lim its prevent Member States, especially those which acceded to the European Union since 1980, from introducing or maintaining such special prudential regimes for similarly affiliated credit institutions which were set up on their ter ritories. It is therefore appropriate to remove the time lim its set out in Article 3 of that Directive, in order to ensure equal conditions for competition between credit institu tions in Member States. The Committee of European Bank ing Supervisors should provide for guidelines in order to enhance the convergence of supervisory practices in this regard.
Having regard to the opinion of the European Economic and Social Committee (1),
Having regard to the opinion of the European Central Bank (2),
After consulting the Committee of the Regions,
Acting in accordance with the procedure laid down in Article 251 of the Treaty (3),
Hybrid capital instruments play an important role in the ongoing capital management of credit institutions. Those instruments allow credit institutions to achieve a diversi fied capital structure and to access a wide range of finan cial investors. On 28 October 1998, the Basel Committee on Banking Supervision adopted an agreement on both the eligibility criteria and limits to inclusion of certain types of hybrid capital instruments in original own funds of credit institutions.
In accordance with the European Council and Ecofin Conclusions and international initiatives such as the Group of Twenty (G-20) summit on 2 April 2009, this Directive represents a first important step to address shortcomings revealed by the financial crisis ahead of further initiatives announced by the Commission and set out in Commission Communication of 4 March 2009 entitled ‘Driving Euro pean recovery’.
Article 3 of Directive 2006/48/EC of the European Parlia ment and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institu tions (4) allows Member States to provide for special pru dential regimes for credit institutions which are permanently affiliated to a central body since 15 Decem ber 1977, provided that those regimes were introduced
Opinion of 24 March 2009 (not yet published in the Official Journal).
OJ C 93, 22.4.2009, p. 3.
Opinion of the European Parliament of 6 May 2009 (not yet published
in the Official Journal) and Council Decision of 27 July 2009. (4) OJ L 177, 30.6.2006, p. 1.
It is therefore important to lay down criteria for those capi tal instruments to be eligible for original own funds of credit institutions and to align the provisions in Directive 2006/48/EC to that agreement. The amendments to Annex XII to Directive 2006/48/EC result directly from the establishment of those criteria. Original own funds referred to in Article 57(a) of Directive 2006/48/EC should include all instruments that are regarded under national law as equity capital, rank pari passu with ordinary shares during liquidation and fully absorb losses on a going-concern basis pari passu with ordinary shares. It should be possible for those instruments to include instruments providing preferential rights for dividend payment on a non- cumulative basis, provided that they are included in Article 22 of Council Directive 86/635/EEC of 8 Decem ber 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (5), rank pari passu with ordinary shares during liquidation and fully absorb losses on a going-concern basis pari passu with ordinary shares. Original own funds referred to in Article 57(a) of Directive 2006/48/EC should also include any other instrument under a credit institution’s statutory terms taking into account the specific constitution of
(5) OJ L 372, 31.12.1986, p. 1.