WHAT WE STAND FOR

1. Meeting of Inter-Balkan Forum of Banking AssociationsAthens - 4 June 2010Current Activities of the EBF Viktorija Proskurovska, Adviser, Economic and Monetary Affairs – Associates, European Banking Federaration

2. WHAT WE STAND FOR 50 years of sound banking representationWe aim to achieve an integrated European financial services market

3. EBF MEMBERS • 31 national memberassociations: • 27 EU Member States • 4 EFTA countries • 13 Associates

4. List of dossiers followed by the EBF

5. Current EBF Priorities • Supervisory Package • Capital Requirements Directive (CRD3) • Remuneration and Corporate Governance • Provisioning to Counter Pro-cyclicality • Alternative Investment Fund Managers’ Directive • Prospectus Directive • Responsible Lending and Borrowing • Product Tying • Bank-Account Switching • SEPA End-Date

6. Supervisory Package • The EBF strongly supports the establishment of the ESAs and ESRB and the creation of a single rulebook; • At this stage, ESMA should have exclusive supervisory powers only on credit rating agencies; • The EBF supports the proposed mechanism to settle disagreement between supervisors; • The EBF calls for a clear definition of “fiscal responsibilities” and how the safeguard clause could be invoked, to avoid that this clause be abused; • In emergency situations, the ESAs should be responsible for facilitating and fostering efficient cooperation and coordination of national actions. The ESAs should not impose decisions directly on financial institutions; • The EBF supports that the ESA can ultimately issue a decision directly applicable to a financial institution to ensure a coherent interpretation and application of EU rules.

7. Capital Requirements Directive (CRD3) • The EBF welcomes the initiative taken by the Council’s Presidency to bring the proposal completely in line with decisions taken by the Basel Committee. • The EBF highlights the need for undertaking an overall assessment of the cumulative impact of proposals that will reshape the regulatory landscape, including: • the capacity of banks to lend to the economy, • the availability of other financial resources to the wider economy and, ultimately • the economic growth. • The EBF supports the proposals on Remuneration Policies and Practices, in line with the G20. • The EBF calls for the implementation date for new capital requirements to be aligned to that of the corresponding Basel Committee’s rules in non-EU countries.

8. Remuneration and Corporate Governance • EBF position on CEBS consultation: • short-term focused remuneration strategies may bring negative effects if they are not adequately balanced with a forward-looking approach; • Therefore, remuneration policies must be brought within the scope of the supervisory review. • The remuneration guidelines and legislation have to remain principle-based (“one size fits all” is an inappropriate principle, so general cap on remuneration is not desirable). • There needs to be more clarity around the categories of staff that will be subject to the remuneration-related measures, and a definition of risk-takers should be established. • There needs to be greater transparency concerning remuneration processes, however, confidential information should be protected.

9. Provisioning to Counter Pro-Cyclicality • Part of the EBF response to the EC consultation on CRD IV addressed pro-cyclicality. • The proposal for a provisioning model was based on the Expected Loss concept (an alternative to the IASB Expected Cash Flow model). • The forward-looking element of the provisioning system will contribute to mitigating pro-cyclicality. • The EBF model follows the business model of an entity. • Changes in expectations are spread over the life of the portfolio. • The EBF model is easier for users to understand and for preparers to implement at a reasonable cost.

10. Alternative Investment Fund Managers’ Directive • The EBF supports the Commission’s objectives of enhancing financial stability and investor protection addressed by the Directive. • However, the EBF has some specific concerns, including: • lack of international consistency; • limitations for EU investors to invest in funds managed by non-EU based managers; • restrictive delegation arrangements; and • most importantly, the proposed depositary rules. They combine continued uncertainty around the specific obligation of depositaries with a reversed burden of proof and far-going liability for the assets under the management of the fund.

11. Prospectus Directive • The EBF supports most of the Commission’s proposals, intended to make the Prospectus Directive function more smoothly and to alleviate the admin. burden on issuers: • the deletion of the denomination threshold for the choice of the home country in the case of non-equity securities; • the extension of the validity period for the prospectus, base prospectus and registration document; and • the alignment of the definition of qualified investors with MiFID. • However, the EBF considers proposals to introduce the concept of Key Investor Information to be premature.

12. Responsible Lending and Borrowing • EBF believes that great care should be taken not to attempt to introduce an EU solution to a US problem. • Some cases of irresponsible behaviour have occurred in a limited number of EU Member States, but most gaps were filled in their respective legislations and practices. Regulating without having proven the bad practice is against EU Better Regulation principles. • EBF supports the Commission in placing the policy focus on supervision issues, rather than on retail policy. • The Commission should refrain from being prescriptive.

13. Product Tying • The EBF believes that practices under scrutiny, with the exception of aggressive commercial strategies, are not per se detrimental to consumers and/or competitors in the retail financial services market. • The EBF challenges the methodology, assumptions and empirical basis of the Commission’s study, as they do not allow to deliver a comprehensive and correct picture of the market. • Switching should not be taken (in isolation) as a mere parameter of lack of consumer choice, rather it is mainly an indicator of customer satisfaction. • Consumers in the Single Market should have access to comparable, understandable and complete – but not overwhelming - information. • The EBF believes that product tying and bundling does not affect a level playing field in retail financial services market.

14. Bank-Account Switching • The EBF (as part of EBIC) proposed an initiative for self-regulation on bank account switching. • Common Principles on Bank Account Switching (in force since Nov-09): • Banks will provide consumers who want to switch current account with clear and complete information. • ‘New’ and ‘former’ banks commit to facilitating smooth and timely switching, committing to completing their assigned tasks within 7 working days each. • The ‘new’ bank is the Primary Contact Point during the switching and in order to arrange the transfer of relevant information from the ‘former’ bank. • The ‘new’ bank offers to inform creditors on behalf of the consumer on the changed account details. • Consumers will have free-of-charge access to relevant general and personal information readily available at banks. Fees linked to other switching-related services (if any) will be transparent and in line with costs. • The industry is monitoring the implementation of Common Principles.

15. SEPA End-Date • EBF believes that whilst much progress has been achieved in SEPA implementation, the migration to SEPA is still an ongoing process. • To complete the process, most effective means to further the migration to SEPA instruments would be the setting of an “end date”, both for SEPA Credit Transfer and SEPA Direct Debit. • Losing momentum would result in a great loss for financial institutions. • Trialogue on setting an end-date are ongoing.

16. BANKING IN EUROPE Thank you for you attentionFor further information: www.ebf-fbe.eu EBF 50th Anniversary