One of the main priorities of the Danish Presidency is to achieve agreement on the new EU rules on capital requirements for banks during the first half of 2012. The Danish Presidency has therefore convened for this extra ECOFIN meeting on 2 May with the purpose of achieving agreement on a general approach in the Council on the Presidency’s compromise proposal regarding capital requirements.
The aim of the new rules is to make the European financial sector more resilient in light of the experiences from the financial crisis. The new rules translate the new global standards (“Basel 3”) into EU legislation. The rules implies extensive regulation, including more and better capital in the banks, the possibility to impose different, temporary additional requirements for banks to ensure financial stability and elements of good corporate governance and a tightening of the requirements for the member states’ sanctions towards non-complying institutions.
Minister for Economic Affairs and the Interior Margrethe Vestager says:
“The Danish Presidency attaches great importance to the extensive work of strengthening the regulation of banks in light of the financial crisis. It is important for growth and employment that we have healthy banks. I hope we can reach agreement on new EU rules on capital requirements for banks. This is a very important lesson from the crisis. I see a strong willingness to compromise but the countries have very different opinions."
At the meeting, the Danish Presidency and the Commission will report on the G20 meeting and the IMF’s spring meeting that took place in Washington 19-22 April 2012 where the Danish Minister for Economic Affairs and the Interior represented the EU at the G20 meeting and the Nordic-Baltic Constituency at the IMF’s ministerial advisory committee (IMFC). The most important result from the meetings is the decision to increase IMF’s resources by more than 430 billion USD, enabling the IMF to play a stronger role in safeguarding global economic and financial stability. Prior to the decision to increase IMF resources, the euro countries had already adopted a strengthening of the euro area's own lending mechanisms EFSF/ESM at the informal ECOFIN meeting in Copenhagen on 30-31 March 2012. The euro countries had also committed themselves to bilateral loans for 150 billion euro as a contribution to the strengthening of IMF's resources, and other EU countries had committed themselves to bilateral loans. The decision to increase the IMF’s resources was made at a joint G20-IMF meeting 20 April 2012.
Margrethe Vestager says:
”I am very pleased with the decision to increase the IMF’s resources with more than 430 billion USD. This corresponds to more than a doubling of the IMF’s current lending capacity. I am also very pleased that it was a joint decision by the IMF and the G20. It is imperative that decisions concerning the IMF are made by the IMF members, not just the G20. We have now - both in Europe and on a global level in the IMF - built a firewall that can help prevent the spreading of the financial crisis. However, the most important thing is that we all continue working to ensure a healthier economic policy that prevents the emergence of a new economic “fire” in Europe or the world economy in the future."