1.This Directive shall apply to credit institutions
as defined the first indent of Article 1 of Directive 77/780/EEC.
2.Notwithstanding paragraph 1, the Member States need not apply this Directive to credit institutions listed in Article 2 (2) of Directive 77/780/EEC.
3.A credit institution which, as defined in Article 2 (4) (a) of Directive 77/780/EEC, is affiliated to a central body in the same Member State, may be exempted from the provisions of this Directive, provided that all such affiliated credit institutions and their central bodies are included in consolidated solvency ratios in accordance with this Directive.
4.Exceptionally, and pending further harmonization of the prudential rules relating to credit, interest-rate and market risks, the Member States may exclude from the scope of this Directive any credit institution specializing in the inter-bank and public-debt markets and fulfilling, together with the central bank, the institutional function of banking-system liquidity regulator, provided that:
- the sum of its asset and off-balance-sheet items included in the 50 % and 100 % weightings, calculated in accordance with Article 6, must not normally exceed
10 % of total assets and off-balance-sheet items and shall not in any event exceed 15 % before application of the weightings,
- its main activity consists of acting as intermediary between the central bank of its Member State and the banking system,
- the competent authority applies adequate systems of supervision and control of its credit, interest-rate and market risks.
The Member States shall inform the Commission of the exemptions granted, in order to ensure that they do not result in distortions of competititon. Within three years of the adoption of this Directive, the Commission shall submit to the Council a report together, where necessary, with any proposals it may consider appropriate.