TAILIEUCHUNG - WSBI-ESBG answer to the IRS Proposed Regulations for FATCA Implementation

The plans banks submitted to regulators in January 2012 suggest that the shedding of bank assets will play a small part in reaching the target ratio. As the example of bank B in the left-hand panel illustrates, banks can deleverage either by recapitalising (moving upward) or by reducing RWA (moving leftward). The EBA’s first assessment shows that banks intend to cover 96% of their original shortfalls by direct capital measures, although the proposed measures also surpass the original capital shortfall by 26%. Planned capital measures thus account for 77% of the overall effort, and comprise new capital and reserves (26%),. | POSITION PAPER WSBI-ESBG answer to the IRS Proposed Regulations for FATCA Implementation ESBG European Savings Banks Group Rue Marie-Thérèse 11 - B-1000 Brussels ESBG Register ID 8765978796-80 30 April 2012 ESBG 2 Doc 0509 2012 RDE Dear Ms. Corwin Mr. Danilack and Mr. Musher The World Savings Banks Institute WSBI and the European Savings Banks Group ESBG is a joint association representing savings and retail banks in the world. As such we appreciate the opportunity to provide comments on the proposed regulations issued on 8 February 2012. Introduction While we fully support the goal of the IRS and of the US Treasury to fight against tax evasion we have many concerns on the proposed regulations. The first of our concerns is the protection of the privacy of our customers. The activity of WSBI-ESBG members is focused on retail banking. They are logically extremely reluctant to be forced to infringe on the private life of their customers. WSBI-ESBG is also very concerned about the pace and volume of change that FATCA creates. The speed by which the new measures are devised occurs at the expense of the quality of proposal. If the rules are not properly drafted they will have a massive negative impact not only on banks but also on all other economic sectors. Therefore the limited time granted to implement FATCA is also a risk for the cost it entails. Against this background we appreciate the efforts made to facilitate the implementation of Chapter 4 by withholding agents and Foreign Financial Institutions FFIs and especially the exclusion from the definition of withholdable payment and passthru payment any payment made under an obligation outstanding on 1 January 2013 and any gross proceeds from the disposition of such an obligation. This expanded scope of grandfathered obligations was really needed but we would have liked to see it extended further. However we still have serious concerns regarding several significant aspects of the proposed regulations. If left .

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