Today the European Parliament's Economic and Monetary Affairs committee (ECON) voted the new draft legislation to reform bank prudential requirements on capital and liquidity, also known as Basel III, an accord that responds to the 2008-09 financial crisis and aims to force the banks to significantly increase their own capital against the risk.

Sharon Bowles (Lib Dems, UK) ALDE spokesperson on this dossier and Chairperson of ECON said: "We have voted through an ambitious and innovative text. On the key concern of maximum versus minimum harmonisation there is sufficient flexibility within an EU framework. This will allow countries with a very large debt to GDP ratio to take the necessary action to protect themselves".

"The Parliament has also been conscious that the regulation should encourage growth. In particular we have supported better treatment of trade financing, which is important for boosting world trade and EU exports. We have also introduced measures to ensure banks continue lending to SME in times of crisis".

"We have embedded basic aspects of crisis resolution and introduced a requirement for banks to have living wills, ensuring the involvement of the European Banking Authority in their coordination".



The Parliament committee has also supported reporting of all repurchase agreements (repos) and securities lending. According to Mrs Bowles, in fact: "It is vital to get a proper picture of who owns what and whether assets are encumbered or not, especially when we are trying to get a better grip on shadow banking".

By referring to the issue of bonuses, which have been capped no more then 1:1 of their salaries Mrs Bowles continued: "As we have done in the past, the Parliament has taken a firm line on variable remuneration. It is clear that these ultra high levels of remuneration for bankers cannot continue, as indeed recent shareholder votes are beginning to show.

"In many quarters there have been concerns about internal banking models so we've proposed benchmarking of these in order to get a better understanding of how they compare".

"Although some have suggested the parliament's honeymoon with the European Supervisory Authorities is over, the text we have agreed demonstrates this is clearly not the case", she concluded.