RESOLUTION A3-0029/93

Resolution on the system of payments in the context of Economic and Monetary Union

The European Parliament,

-having regard to the motions for resolutions by Mr Beumer on the system of the payments in the context of EMU (B3-0860/91), Mr Robles Piquer on the establishment of a European Postal Bank (B3-0286/92) and Mr Vandemeulebroucke on a Europe-wide 'phonecard (B3-0289/92),

-having regard to the Commission Discussion Paper: Making Payments in the Internal Market (COM(90)0447), and the Commission working document: Easier cross-border payments: breaking down the barriers (SEC(92)0621 - C3-0367/92),

-having regard to the Treaty on European Union signed in Maastricht on 7 February 1992 and in particular:

(i)Articles 73b to 73g concerning the removal of all restrictions on payments between Member States and between Member States and third countries;

(ii)Article 73h on the provisions applicable during the first stage of EMU concerning payments connected with the movement of goods, services or capital;

(iii)Article 105 (2), on the basic tasks to be carried out through the European System of Central Banks (ESCB), one of which is the promotion of the smooth operation of payment systems;

(iv)Article 109c (1) and (2) concerning the tasks of the Monetary Committee and of the Economic and Financial Committee, one of which is the examination of all measures relating to capital movements and payments as soon as the Maastricht Treaty is ratified;

(v)Article 109f (3) on the European Monetary Institute's responsibility to promote the efficiency of cross-border payments as from 1 January 1994,

-having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy, and the opinion of the Committee on the Environment, Public Health and Consumer Protection and the opinion of the Committee on Energy, Research and Technology based on motion for resolution B3-0289/92 (A3-0029/93),

A.whereas an approximate estimate of 400 million total cross-border payments are effected in the Community per year of which 50% are 'retail' payments, below ECU 2500 in value; the 200 million retail payments account for a considerable proportion which is expected to grow as the completion of the Single Market would lead to greater flows in goods, services and capital and to an increase in the movement of people,

B.whereas the large majority of retail payments are made 'face-to-face' by individuals while the remainder are 'remote' payments made by and to individuals or businesses in payment for goods and services,

C.worried by the fact that charges for cross-border transfers are about 10 to 20 times more expensive than those for domestic transfers and that the minimum charge for retail cross-border payment is likely to be in excess of ECU 20,

D.whereas the standard of performance of cross-border payment systems in Member States today is not yet sufficiently adapted to the needs of EMU and whereas there is an urgent need to improve cross-border payments aiming at an advanced technology,

E.aware of the interdependence between retail cross-border payments and large value payments, since in several countries the two are held through by the same payments systems,

F.whereas the dominant means used for remote retail cross-border payments is credit transfer orders, although payment cards have assumed some importance recently with cheques being in decreasing demand,

G.mindful of investment needs in infrastructure (computers, communications, software) and in norms and standards in order to promote highly integrated payment systems while respecting the principles of non-discrimination, no barriers to entry and fair competition, allowing for a reasonable return to new investment,

H.whereas large-value payments unite the central banks with their national banks and in this way monetary policy is properly channelled and foreign exchange policy is put into practice,

I.concerned that many systems are based on obsolete methods and on practices which expose members to the 'risk' that one of them may fail before payments are completed,

J.concerned at the need to endow EMU with the appropriate institutional structure, to be devised, prepared and established in the first stage of EMU,

1.Supports the four suggestions made by the Commission in the field of :

(a)efficient linkages between automated clearing houses (ACHs),

(b)correspondent banking,

(c)new systems, such as direct debiting, for effecting cross-border transfers,

(d)accession by the large banks to an ACH, without thereby distorting competition or creating new barriers to entry;

2.Finds the two principles adopted by the Users Group in their report, quality of information and redress procedures, useful to apply to existing and new payment systems in order to improve their efficiency;

3.Approves the four criteria: transparency, speed, reliability and cost, for the assessment of existing and any future payment systems;

4.Believes that the principle of 'cross-frontier acceptability', meaning compatible technical systems in Member States, should be applied to all new payment systems and to drawing up Community technical standards;

As regards the consumer

5.Is of the opinion that the content of the principle of transparency ought to be defined by a Council directive entailing the following rules:

(a)a requirement for the bank to inform the potential user of the various means of effecting payments which it is able to offer and their respective costs,

(b)the user's right to bear all charges concerned with a cross-border payment, which should automatically exclude 'double charging',

(c)a four-working-day period for the settlement of the cross-border payment,

(d)the user should have access to a redress procedure; the Commission will need to provide a suitable appeal mechanism for medium and large businesses;

6.Welcomes the guidelines on customer information on cross-border remote payments submitted by banks and designed to ensure that every user is provided with the fullest possible information; is concerned, though, that in the past such guidelines have not been respected;

7.Insists on the fact that where the originator of a payment has accepted responsibility for all charges, the operators of payment systems should be obliged to ensure no 'double charging' arises, so that the beneficiary can receive the full amount transferred;

8.Believes that principle No. 4 of Commission Recommendation 90/109/EEC on a maximum two-day execution for cross-border transfers should be interpreted to mean four working days for remote cross-border payment, regardless of the number of banks involved for the execution of the order; a penalty should be imposed on any bank that delays execution;

9.Recalls that the powers conferred upon Parliament by the Treaty on European Union, and in particular Article 138d on the right of citizens to address a petition to Parliament and Article 138e on the powers of the Ombudsman, will also apply to instances stemming from activities of payment systems;

10.Requests the Commission to ensure that the national complaints bodies established or to be established following the said Commission Recommendation should so cooperate with each other, in order that a complainant need only address himself to his own national body, which will then make contact on his behalf with other national bodies, where appropriate;

11.Voices its concern that the protection of individuals in relation to the processing of personal data, payment systems and their efficiency have not been treated in depth; requests, therefore, the Commission to revise its 1990 proposal which would protect the user of payment systems without raising unnecessary obstacles to the development of efficient cross-border payments;

As regards new payment systems and competition

12.Supports the initiatives of new payment systems proposed by new or existing operators and, in particular, the development of electronic fund transfers; is persuaded that effective competition between systems should be encouraged via the elimination of technical and legal barriers to entry and by harmonization of technical and operational standards;

13.Is of the opinion that the Community could promote certain innovations, such as card networks, to be used for money transfers or extending direct debiting across borders, or electronic cheques, if the legal framework were appropriate; asks the Commission to put forward a proposal on the legal and technical conditions for this purpose;

14.Requests the Commission to submit the appropriate proposal concerning rules on the legal nature of inter-bank settlements involving a third party, taking account of the status of the private ECU as a means of payment;

15.Is convinced of the important role of new payment systems in modernizing national payment systems in some Member States, since an effort in this field would help the cohesion objective of the Maastricht Treaty and deserves financial and technical assistance from the Community in accordance with the trans-European networks;

16.Calls upon the Commission to study the ways and means by which the high telecommunications costs for new payment systems are lowered under the Open Network Provision Directive, and to report back to Parliament one year from the adoption of this resolution on its initiatives in this field;

17.Finds the current obligation for payment systems to report transactions to the national central banks for payments in the Community incompatible with the philosophy of the four principles of freedom and of the single market; proposes, therefore, that for any payment below ECU 10 000 no reporting requirement should be required;

18.Agrees with the competition principles contained in Annex C of the Commission document SEC(92)621 final but wonders how the mechanism the Commission would employ could preserve a fine balance between general agreements and effective competition so that the European open-market system and fair play could be maintained;

19.Believes that correspondent banking would be substantially improved if the linkages between Automated Clearing Houses (ACHs) were improved in a first phase while, at a later stage, after the ratification of the Maastricht Treaty by Member States, the possibility of creating a European Automated Clearing House, to be set up by the European Monetary Institute, should be considered by the Committee of Central Bank Governors;

20.Points out that a well-integrated payment system in the Community would benefit from additional support if the Member States of the EEA were to adopt at this stage systems compatible with those in force in the Community; to this end the Committee on European Banking Standards would have an interest in inviting a representative from those countries to participate in its work;

21.Calls upon the Commission to put forward a proposal that would seek to eliminate any uncertainty stemming from conflicting national laws and, in particular, to tackle the aspects of:

(a)the moment of settlement finality,

(b)the point of irrevocability,

(c)the nature of legal tender in the presence of a parallel currency,

(d)the mutual responsibility of the credit institutions involved in a cross-border payment;

22.Proposes the drawing up of rules governing membership of payment systems, similar in approach and application to those applicable to the second banking directive, which should guarantee:

(a)the principle of non-exclusivity,

(b)the right for all credit institutions to set up a payment system, provided they satisfy the criteria of economic eligibility,

(c)the setting up of criteria concerned with economic eligibility, meaning potential economic fitness and minimum systemic risk,

(d)the supervision of payment systems by regulatory bodies based on commonly agreed principles and working criteria;

23.Calls on the Committee of Central Bank Governors to formulate a common position on increasing competition from financial and non-financial institutions other than banks which wish to set up or participate in clearing and settlement systems;

As regards large-value payments

24.Warns that the freedom to provide services in the banking sector (a single banking licence) from 1993 and the consequent growth in the number of transnational payments will lead to an increase in 'in-house' compensatory payments within banking institutions. Many transnational payment operations will therefore no longer be recorded and will be able to escape surveillance more easily, thereby leading to fluctuations in the exchange rate systems at least until the third phase of EMU;

25.Is worried by the fact that the Committee of Central Bank Governors has not completed its work on 'systemic risk' stemming from the possibility of one participant in a payment system who fails to meet his required obligations thus making other participants unable to meet their obligations when due;

26.Points out that the fact that some payment systems handle both 'retail' and 'wholesale' payments across frontiers does not imply that the spread of systemic risk will be reduced;

27.Believes that approximately 90% of large-value payments come from the financial markets, most of which are foreign exchange markets; this may mean that the risk in payment systems will rise as capital movements increase;

28.Calls upon the Committee of Central Bank Governors to examine and propose a list of principles concerning cooperation among regulatory bodies with regard to:

(a)surveillance of payment systems,

(b)coordination of policies aimed at reducing and controlling the risk due to the different existing payment systems in the Community,

(c)exchange of information among national central banks, and

(d)common standards and guarantees;

29.Is concerned by the fact that large-value interbank fund transfers between countries could have repercussions on:

(a)the stability and integrity of the financial system,

(b)total liquidity and credit,

(c)the cross-currency settlement risk;

30.Asks, therefore, the Committee of Central Bank Governors first to appraise experience of the EC-wide payment system as called for in paragraph 19, and then to propose, if necessary, the setting up of an entirely new system capable of making settlements in several currencies, thus accepting the private sector risk;

31.Reserves the right to review the situation of payment systems when both the Commission and the Committee of Central Bank Governors have informed Parliament on the subjects raised in this resolution;

32.Instructs its President to forward this resolution to the Council, the Commission, the Committee of Central Bank Governors and the parliaments of the Member States.