The Netherlands: Discussions around the "Third Capital Requirements CRD III EU Directive"

Recently the European Commission requested Greece, Italy, Poland, Portugal, Slovenia and Spain to notify measures within two months to implement important rules concerning the capital adequacy and the remuneration policies of financial institutions, as laid down in the Third Capital Requirements Directive or CRD III (2010/76/EU).


The aim of the Directive is to ensure the financial soundness of banks and investment firms and to address excessive and imprudent risk-taking in the banking sector promoted by improperly designed remuneration practices which led to the failure of individual institutions and problems to the society as a whole.


The deadline for implementing the rules in question was 1 January 2011. The Commission has also requested Belgium, Luxembourg, Slovakia and Sweden to implement those parts of the Directive that they have so far failed to, according to an announcement.


Today in the Netherlands there was a parliamentary round-table panel discussion  on the issue, including all the major Dutch financial/insurance  institutions. They discussed not only the EU CRD III directive, but also remuneration standards for board members and top management which becomes very muddled when looking at multi-national financial institutions. operating outside EU borders. In the discussions it became apparent that the financial sector is still greatly  influenced by short term thinking and shareholders interest.  

Listening to these public discussions it became apparent that most of the financial/insurance sector representatives on the panel, except for  two banks,  which have a different corporate structure,  had major problems in  recognizing  that  the present culture of the financial industry has to change.  Public pressure on the political establishment, as a result of the financial crises revealed that the tax payers wanted action,  without delay,  to change the financial sectors focus and  its culture back from being a short term profit/shareholders oriented sector,  to a socially focused  public service structure   

Unfortunately it seems that if there are no international agreements which can be linked with  the EU CRD III directive, it will be difficult to control the malpractises of  multi-national financial organizations which are not regulated.


EU-Digest