MHC Times Issue 33

06 September 2013

Autumn 2013

Our last issue of MHC Times saw us at the beginning of Ireland’s Presidency of the Council of the European Union. Ireland’s term came to an end in June and we can now review some of the accomplishments of the last six months.

The most significant achievement was the agreement between the EU and US to begin negotiations for a trade and investment agreement. The deal has the potential to unlock economic growth of 0.5% on both sides of the Atlantic.

In the area of financial services, the Presidency made the Banking Union a key priority of its term, in order to prevent a recurrence of past mistakes, to better protect savers and taxpayers and to ensure that EU banks can support the region’s economic recovery. Activity included the Agreement with the European Parliament on the Capital Requirements Package, which came into force on 17 July 2013. The new rules (which will apply from 1 January 2014) tackle some of the vulnerabilities shown by banking institutions during the crisis, namely insufficient level of capital, both in quantity and in quality. These rules set stronger prudential requirements for banks, requiring them to keep capital reserves and levels of liquidity. This new framework will solidify EU banks and will strengthen their capacity to adequately manage the risks and absorb any potential losses they may incur in trading.