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Proposal for a Council Directive amending Directive 89/299/EEC on the own funds of credit institutions. COM (91) 188 final, 6 June 1991

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  • Law
  • Political Science

Abstract

COMMISSION OF THE EUROPEAN COMMUNITIES COM(91)188 flnai-SYN 344 Brusse Is, 6 June 1991 . Proposal for a OQUNCIL QIBECTIYE amending Directive 69/299/EEC on the own funds of credit Institutions (presented by the Commission) User Rectangle - .. - EXPLANATORY MEMORANDUM The council has adopted on 17.4.1989 the Directive. 89/299/EEC on the own funds of credit Institutions which defines the eligible elements. The definition of the own funds of credit institutions Is a key element in the creation of an internal market in the banking sector since it Is used as a yardstick to measure prudential standards and sets other I iml tat ions. The Danish government recently has expressed a strong interest in having their few mortgage credit institutions, organized as cooperative or funds, transformed limited companies. As a consequence, theY pr lnclple, loose the possibll ity to count the into pUb I ic would, in joint and sever a I commItments of theIr borrowers as capita I under the Own Funds Directive and, thereby, would encounter serious difficulties in ·complying with different requirements under EC Directives. The Danish government has therefore asked for transitional arrangements In order to smoothlY phase out the joint and several commitments. The Commission, In consultation with the Banking Advisory committee, has examined the request and came to the conclusion that they should be allowed to include, on a temporary basis, part of their )oint and several commitments to borrowers as own funds, thus facilitating their transformation. - . - This derogation should not adversely distort competition between cred 1 t institutions. The council, in adopting the Own Funds Directive in 1989, has reserved for Itself the Implementing powers for technical amendments. The Commission noted at that time that this should be only a provisional solution and undertook to make proposals for a definitive solution to this problem which should respect

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