Brussels, 20th November 2002
Financial conglomerates: Commission welcomes the European Parliament's adoption of Directive
The European Commission has welcomed the adoption today by the European Parliament of the Financial Conglomerates Directive. The Directive will enhance the prudential soundness and effective supervision of financial conglomerates - large financial groups active in different financial sectors, often across borders. It will also promote convergence in national supervisory approaches. It is an important step in the ongoing modernisation of EU financial legislation, it will enhance financial stability and is a significant improvement in the protection of depositors, insurance policy holders and investors. The Directive marks the first comprehensive implementation in the world of international recommendations on supervision of financial conglomerates agreed in the framework of the Group of Ten (G-10) under the auspices of the Bank of International Settlements. The Directive was proposed by the European Commission in April 2001 (see IP/01/609). The text adopted by the Parliament had already been approved by the Council in May 2002 (IP/02/669) so will become law as soon as it has been formally signed by the Presidents of the two institutions.
Internal Market Commissioner Frits Bolkestein paid tribute to the speed and quality of the work done by the Council and the Parliament. He said: "The rapid adoption of this key Directive in the Financial Services Action Plan shows that EU law can keep pace with market developments. The Directive will enhance effective supervision of financial conglomerates across different financial sectors and across borders and promote convergence in supervisory approaches. It will make a much-needed contribution to the stability of the financial sector. It is in line with international recommendations in the framework of the G-10 and addresses an important loophole in current EU financial legislation."
The financial conglomerates covered by the Directive include large groups that are important for the overall stability of the financial system.
The Directive sets out requirements:
Furthermore, the Directive amends some existing rules for homogeneous financial groups (banking groups, insurance groups, investment firm groups) in order to achieve more coherence between the different supervisory regimes for such groups and for financial conglomerates.
The Directive was adopted by the Parliament under the co-decision procedure without the need for a second reading in the Council because the European Parliament endorsed in full the text of the Council's Common Position. The Directive must be implemented by Member States within 18 months of its publication in the EU's Official Journal.