5.2.93 Official Journal of the European Communities No L 29/1 (Acts whose publication is not obligatory) COUNCIL COUNCIL DIRECTIVE 92/121/EEC of 21 December 1992 on the monitoring and control of large exposures of credit institutions’ THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular the first and third sentences of Article 57 (2) thereof, Having regard to the proposal from the Commission (*), In cooperation with the European Parliament (?), Having regard to the opinion of the Economic and Social Committee (*), Whereas this Directive comes within the framework of the aims set out in the Commission’s White Paper on completing the internal market; Whereas the essential rules for monitoring large exposures of credit institutions should be harmonized; whereas Member States should still be able to adopt provisions more stringent than those provided for by this Directive; ' Whereas this Directive has been the subject of consul- tation with the Banking Advisory Committee, which, under Article 6 (4) of Council Directive 77/780/EEC of 12 December 1977 on the coordination of laws, regu- lations and administrative provisions relating to the taking-up and pursuit of the business of credit institutions (*), is responsible for making suggestions to the Commission with a view to coordinating the coef- ficients applicable in the Member States; (*) OJ No C 123, 9. 5. 1991, p. 18 and O] No C 175, 11.7. 1992, p 4. (*) OJ No C 150, 15. 6. 1992, p. 74 and O] No C 337, 21. 12. 1992. (*) OJ No C 339, 31. 12. 1991, p 35. () OJ No L 322, 17. 12. 1977, p. 30. Directive last amended by Directive 89/646/EEC (O] No L 386, 30. 12. 1989, p. 1). Whereas the monitoring and control of a credit institution’s exposures is an integral part of its super- vision; whereas an excessive concentration -of exposures to a single client or group of connected clients may result in an unacceptable risk of loss; whereas such a situation may be considered prejudicial to the solvency of a credit institution; ’ Whereas common guidelines for monitoring and controlling credit institutions’ large exposures were initially introduced by Commission recommendation 87/62/EEC (*); whereas that instrument was chosen because it permitted the gradual adjustment of existing systems and the establishment of new systems without dislocating the Community’s banking system; whereas, now that that first phase is over, a binding instrument applicable to all Community credit institutions should be adopted; Whereas in a unified banking market credit institutions are engaged in direct competition with one another and monitoring requirements throughout the Community should therefore be equivalent; whereas, to that end, the criteria applied to determining the concentration of exposures must be the subject of legally binding rules at Community level and cannot be left entirely to the discretion of the Member States; whereas the adoption of common rules will therefore best serve the Communtiy’s interests, since it will prevent differences in the conditions of competition, while strengthening the " Community’s banking system; ‘Whereas, for the precise accounting technique to be used for the assessment of exposures reference is made to Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (¢); () OJ No L 33, 4. 2. 1987, p. 10. (9 OJ No L 372, 31. 12. 1986, p 1.