Skip to content
REPORT (COM(2021)0663 – C90395/2021 – 2021/0341(COD))

On the proposal for a directive of the European Parliament and of the Council amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks, and amending Directive 2014/59/EU

A-9-2023-0029

Committee on Economic and Monetary Affairs · Rapporteur: Jonás Fernández

Official HTML ↗ PDF DOCX
✦ In shortFull textProcedure & committee votes
✦ In short · AI summary of this text, generated 25 Sept 2026

Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's amended version of the Commission proposal to amend Directive 2013/36/EU on supervisory powers, sanctions, third-country branches and environmental, social and governance risks, and to amend Directive 2014/59/EU. It requires third-country undertakings providing banking services in the Union to establish an authorised branch, with exemptions for reverse solicitation and certain interbank transactions, and classifies branches as class 1 or class 2. It sets minimum capital endowment and liquidity requirements for third-country branches, rules on systemic importance, reporting, supervision and colleges of supervisors. It strengthens supervisory powers over material acquisitions, transfers of assets and liabilities, mergers and divisions, and lays down administrative penalties and periodic penalty payments. It introduces rules on environmental, social and governance risks, including plans, stress testing, supervisory review and a systemic risk buffer for climate change risks. It sets a fit-and-proper framework for management body members and key function holders, including suitability assessments, statements of responsibilities and diversity requirements.

Committee position. The Committee on Economic and Monetary Affairs proposes to adopt Parliament's position at first reading, amending the Commission proposal on supervisory powers, sanctions, third-country branches and ESG risks, and on amendments to Directive 2014/59/EU.

Key points

  1. Competent authorities and their staff must act independently, with rules to prevent conflicts of interest and strict limits on revolving doors, and EBA is to issue guidelines.
  2. Competent authorities may withdraw authorisation of a credit institution declared failing or likely to fail that does not meet other resolution conditions.
  3. Third-country undertakings seeking to provide banking services in the Union must establish an authorised branch, unless they use a subsidiary; reverse solicitation and certain interbank transactions are exempt.
  4. Supervisors must be notified ex ante of material operations such as acquisitions of holdings above 15% of eligible capital, material transfers of assets or liabilities, and mergers or divisions.
  5. Member States must provide effective, proportionate and dissuasive administrative penalties and periodic penalty payments for breaches, with minimum amounts and criteria for application.
  6. Third-country branches are classified as class 1 if they hold assets of EUR 5 billion or more, accept retail deposits, or are not qualifying branches; otherwise they are class 2.
  7. Class 1 branches must hold minimum capital endowment of 3% of average liabilities (minimum EUR 10 million); class 2 branches 0.5% (minimum EUR 5 million), and all branches must hold liquid assets for 30 days.
  8. Competent authorities must periodically assess whether third-country branches with assets of EUR 40 billion or more are systemically important and may impose requirements, including authorisation as subsidiaries.
  9. Third-country branches must report periodically on assets, liabilities, compliance and head undertaking, with class 1 branches reporting at least biannually and class 2 at least annually.
  10. Institutions must have robust governance and strategies to identify, measure and manage environmental, social and governance risks over at least 10 years, with plans to address misalignment with Union climate objectives.
  11. Competent authorities must include ESG risks in supervisory review and stress testing, and may require institutions to reduce risks from misalignment with Union policy objectives.
  12. A fit-and-proper framework is set for management body members and key function holders, with suitability assessments by institutions and competent authorities, statements of responsibilities and diversity targets.

Who is affected

  • Credit institutions, financial holding companies and mixed financial holding companies in the EU, which face new governance, ESG and supervisory requirements.
  • Third-country undertakings providing banking services in the EU, which must establish an authorised branch unless exempt.
  • Third-country branches, which are classified as class 1 or class 2 and face capital, liquidity, governance and reporting requirements.
  • Members of management bodies and key function holders, who are subject to suitability assessments and statements of responsibilities.
  • Competent authorities and EBA, which gain new supervisory powers and must issue guidelines and technical standards.

Figures and deadlines

  • EUR 5 000 000 000: asset threshold for classifying a third-country branch as class 1.
  • EUR 40 000 000 000: asset threshold for periodic assessment of systemic importance of third-country branches.
  • 3% of average liabilities, minimum EUR 10 million: minimum capital endowment for class 1 third-country branches.
  • 0.5% of average liabilities, minimum EUR 5 million: minimum capital endowment for class 2 third-country branches.
  • 30 days: minimum period for which third-country branches must hold liquid assets to cover liquidity outflows.
  • 10% of total assets or liabilities: threshold for a transfer of assets or liabilities to be deemed material.
  • 15% of eligible capital: threshold for notification of acquisition or disposal of a material holding.
  • 10% of total annual net turnover: maximum administrative pecuniary penalty for legal persons.

Legal basis: Article 53(1) of the Treaty on the Functioning of the European Union.