European Commission
DG Financial Stability, Financial Services and Capital Markets Union
Unit D2 – Banks and financial conglomerates
Spa 2 04/064
1049 Brussels
Belgium
MINISTER FOR BUSINESS AND
GROWTH
September 20, 2016
MINISTRY OF
Danish comments to the European Commission’s consultation on the
evaluation of the Financial Conglomerates Directive
I appreciate the opportunity to comment on the consultation on the evalu-
ation of the Financial Conglomerates Directive (FICOD).
The review of FICOD is part of the REFIT-programme. The Danish Gov-
ernment strongly supports initiatives aiming to make EU law simpler and
to reduce regulatory costs, while ensuring financial stability.
We support the review of FICOD, as the sectoral regulation on which
FICOD builds has undergone significant changes since the original adop-
tion of FICOD in 2002 as well as the revision in 2011. It is important to
ensure coherence across the financial regulation in order to avoid creating
unnecessary compliance costs for the financial sector as well as avoiding
possible circumvention of prudential requirements set out in sectoral
regulation.
The financial crisis has underscored the gravity and implications of so-
called group risks to financial stability. This has emphasized the im-
portance of adequately addressing such risks by supplementary supervi-
sion of links within financial groups and between the regulated entities.
Supervisors should have the appropriate tools and powers to be able to
detect the effects that changes in market structure have on the risk-taking
behaviour of financial groups.
Sectoral supervisory approaches are not always sufficient to cope with the
challenges that some complex group structures pose to supervision. In
these situations supplementary supervision provided by the FICOD is
needed to allow supervisors to look across sectors and to address cross-
sectoral risks for the stability of these groups and, in turn, the stability of
the financial system they operate in.
The Danish Government believes that the current regulatory framework
for financial conglomerates, together with the newly revised sectoral rules
(CRR/CRD IV and Solvency II), generally ensures a sound basis for su-
pervising financial groups.
BUSINESS AND GROWTH
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