Have your say consultation: EACB comments on the European Commission banking package “Aligning EU rules on capital requirements to international standards” Proposal for a directive – COM(2021)663 2021/0341 (COD).
The EACB particularly notes that the amendments to the CRD are not limited to complementing
the Basel reforms but are rather sweeping, extending in many respects the powers of supervisors, from fit & proper assessments to new sanctioning tools to acquisition transactions. We find the extension inadequate in some cases.
With regard to ESG risks, supervisory discretion should not be left unchecked. The wording of certain provisions leaves a very wide room for interpretation, especially when looking at the stated possibility of risks of misalignment “with the relevant Union policy objectives or broader transition trends towards a sustainable economy” (Art. 76(2), 87a, 104(1)(m)). Broad consideration of policy objectives and transition trends for supervisory action would leave institutions unable to properly define how to chart their strategy and milestones and to which supervisory expectations to adhere, supervisors would be left without clear guidance too. The ESG mandate in the SREP is already targeted to address ESG risks and ensure that banks actively and substantially contribute
to the transition.