In the first of a regular section
looking at European Union legislation, LL looks at the supervision
of lessors, capital adequacy and heavy trucks.
Go deeper with GlobalData
The European Commission’s reaction
to the credit crunch, in one area at least, might have come just a
little too late.
According to one EC spokesperson, on 27 June –
well after closure of LL’s print deadline – Brussels was due to
release a report on supervision of asset finance companies.
This comes at a time of increased pressure for
regulation of the asset finance industry in Europe, not least in
Germany which has now the continent’s largest leasing portfolio,
and the fall-out in the UK from an historical lack of
regulation.
Across Britain trading standards departments
and police forces are inspecting leases which, they believe, may
have links with fraud (see
here).
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By GlobalDataElsewhere, the European Commission is
considering reviewing EU legislation to allow megatrucks up to
25.25 metres in length and up to 60 tonnes in weight to travel
across European borders.
At the same time, the Community of European
Railway and Infrastructure companies (CER) has said it opposes the
proposed introduction of “megatrucks” on European roads.
The organisation, which brings together over
70 railways undertakings and infrastructure companies in Europe –
including the UK Association of Train Operating Companies which
works closely with British rolling stock companies – said that
introducing longer and heavier trucks on European roads would cause
more environmental damage than previously thought.
According to a study commissioned by CER,
megatrucks – which would replace up to 30 percent of high-value and
container rail transport – would also produce an additional two
million tonnes of CO2 each year. Currently, trucks cannot exceed
18.75 metres in length and 44 tonnes in weight.
Meanwhile, on 7 May the European Parliament
announced that it had adopted a legislative report which amends the
Capital Requirements Directive to improve the transparency and the
supervision of the financial system to ensure proper risk
management in the banking sector.
The major change, that took place following
negotiations, is the inclusion of a review clause. This states that
European Parliament representatives agreed with the Commission’s
proposal to ensure that an institution issuing an investment
retains a material interest in the performance of the proposed
investment.
The retention rate is, as agreed between the
negotiating delegations, at least 5 percent of the total value of
the exposures. The European Parliament delegation also obtained a
strong review clause asking the Commission to come up with a
possible proposal to increase the retention rate, by 31 December
2009, after consulting the Committee of European Banking
Supervisors and taking into account international developments.
Brendan Malkin
