Ciarán Cuffe (Dún Laoghaire, Green Party)
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Question 95: To ask the Minister for Finance his views on the effect of imminent changes in rules governing cross-border banking; if his Department has assessed the potential impact of these changes on the financial services sector and on the economy more generally; and if he will make a statement on the matter. [13373/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I assume the Deputy is referring to the draft capital requirements directive which is currently being considered by the European Parliament and is planned to be adopted by Council and Parliament before the end of this year. As far as the assessment of the potential impact of this directive is concerned, in response to a request from the European Council, the European Commission commissioned PriceWaterhouse Coopers to carry out a study on the consequences of the intended new capital requirements framework for all sectors of the European economy with particular attention to small and medium sized enterprises, SMEs. This report is published on the Commission's website at: http://europa.eu.int/comm/internal_market/regcapital/index_en.htm#impact.

The study concluded that these changes should lead to a modest reduction in the capital requirements of EU banks. It may also potentially cause a modest increase in GDP in the long term. The study also found that the changes would bring no systematic disadvantage for smaller firms seeking credit and should actually be beneficial for the vast majority of SMEs.