S&Ds have pushed for a stronger and more sustainable banking sector

Single Supervisory Mechanism (SSM)

The Socialists and Democrats welcomed today the preliminary deal struck between the Parliament and the Council on the banking package, but stressed the need to achieve a concrete outcome on the reform of the European Stability Mechanism (ESM) and the European Monetary Union (EMU) at the next Euro Summit in December. The agreement aims to reduce risk in the EU banking system, safeguard taxpayers’ deposits and to deepen the Banking Union. The S&Ds fought hard to ensure that banks will be able to cover their own losses and that they will address environmental, social and governance (ESG) risks.

S&D negotiator for BRRD/SRM, Pedro Silva Pereira MEP, stated:

“We welcome the agreement reached on the Bank Recovery and Resolution Directive (BRRD2). It is a positive compromise between the political concerns of the European Parliament and those of the Council. We are convinced it will contribute to the consolidation agenda for the Banking Union and the reform of the Economic and Monetary Union (EMU). This is to be delivered by the Euro Summit next week. Risk sharing should go hand-in-hand with risk reduction.”

Parliament's negotiator for CRR/CRD, S&D MEP Peter Simon stated:

“We Socialists and Democrats have long been advocating for more financial stability and clear regulatory requirements for small and low-risk banks alike. Thanks to our efforts, prudential and liquidity requirements will be put in place to ensure that banks are better capitalised. Furthermore, we made sure that banks, and especially the systematically important ones, will hold enough own funds and eligible liabilities (MREL) to cover for own losses.

“Stable and resilient banks are crucial for supporting growth that benefits all. We also want them to be able to finance the real economy, and in particular households, SMEs and sustainable finance projects in order to promote economic growth and job creation. To this end, we have ensured that in the future, banks will have to assess environmental, social and governance (ESG) risks and take appropriate measures to address them.

“To avoid a repeat of the recent tax scandals, from Panama Papers to CumEx, strict prudential rules on money laundering will be established. Supervisory authorities and anti-money laundering authorities will finally be obliged to cooperate closely and exchange information in the future. This will put an end to the shameful situation with member states not warning each other about potential money laundering efforts and leaving perpetrators to run away undisturbed.”

S&D MEP Roberto Gualtieri, chair of the economic and monetary committee in the European Parliament, added:

“The European Parliament has given a major contribution in delivering a comprehensive and balanced package which reduces risks in the EU banking sector and protects taxpayers and citizens' deposits, while providing the necessary incentives to sound lending to the real economy and to the reduction of non-performing loans (NPLs).”

S&D Group spokesperson on economic and monetary affairs, Pervenche Berès, added:

“The deal reached signals the end of a long and arduous process to finalise the banking package. We are glad that the Council has so far cooperated to reduce risk in the banking sector, but it is imperative that member states show the same will to deliver on those risk-sharing measures that have been promised for years.

“In particular, we expect the Council to reach a deal on the reform of the European Stability Mechanism (ESM) and to endow the Eurozone of its own fiscal capacity.
“A concrete outcome on the EMU, including EDIS, is indispensable for sealing this banking package in plenary. No progress is something the EU can no longer afford. An ambitious reform of the Eurozone is more urgent and necessary than ever. Time for procrastination and shallow promises is over.”