presentation of the ecb framework regulation organisational aspects
DESCRIPTION
Presentation of the ECB Framework Regulation Organisational aspects. Tallinn, 26 February 2014. Timeline. SSM Regulation enters into force. Public hearing. Publication on the ECB’s website. SSM takes over banking supervision. Submission to the European Parliament. 4 Feb. 3 Nov. 2013. - PowerPoint PPT PresentationTRANSCRIPT
Presentation of the ECB Framework Regulation
Organisational aspects
Tallinn, 26 February 2014
Timeline
2
3 Nov. 2013
SSM Regulation enters into
force
30 Jan. 2014
Launch of public
consultation
Public hearing
Supervisory Board endorses draft
Framework Regulation at its
first meeting
7 March
End of public consultation
4 Feb. 4 Nov.
SSM takes over
banking supervision
Submission to the
European Parliamen
t
7 Feb.
19 Feb.
May
Publication in Official Journal
by 4 May
Publication on the
ECB’s website
Legal basis
3
ECB shall adopt and make public (by 4 May 2014) a framework to organise the practical arrangements for the implementation of the cooperation between the ECB and NCAs within the SSM.
ECB shall adopt and make public (by 4 May 2014) a framework to organise the practical arrangements for the implementation of the cooperation between the ECB and NCAs within the SSM.
Articles 6 and 33(1)
SSMR
Articles 6 and 33(1)
SSMR
ECB shall publish by means of regulations and decisions the detailed operational arrangements for the implementation of its supervisory tasks.
ECB shall publish by means of regulations and decisions the detailed operational arrangements for the implementation of its supervisory tasks.
Article 33(2) SSMR
Article 33(2) SSMR
ECB may adopt regulations for the carrying out of its supervisory tasks.The framework will be an ECB regulation.
ECB may adopt regulations for the carrying out of its supervisory tasks.The framework will be an ECB regulation.
Article 4(3) SSMR
Article 4(3) SSMR
Structure of the draft Framework Regulation
4
Part I – General provisions
Part II – Organisation of the SSM
Part III – Operation of the SSM
Part IV – Methodology for assessing significance
Part V – Common procedures
Part VI – Significant credit institutions
Part VII – Less significant credit institutions
Part VIII – Macro-prudential supervision
Part IX – Close cooperation
Part X – Administrative Penalties
Part XI – Access to information, reporting, investigations and on-site inspections
Part XII – Transitional and final provisions
ECB as a banking supervisor – institutional impact
5
Shared Services (IT, Legal, HR, Statistics)
Functioning of the SSM
6
ECBoversees the
system
NCAs
Significant
banks
Less significa
nt banks
Direct supervisio
n
May “call-up” direct
supervision
SSMSSM
Grants/withdraws authorisations, assesses qualifying holdings
Grants/withdraws authorisations, assesses qualifying holdings
JST(ECB/NCAs staff)
Direct supervision
Banking supervision by the SSM
Direct supervision by the ECB
Direct supervision by the NCAs
Significant banksas defined under the SSMR by:•size •importance for EU or domestic economy •significant cross-border activities
Less significant banks
Less significant bankswhen necessary to ensure
consistent application of high supervisory standards
Banks that have requested or received ESM or EFSF public financial assistance
Three most significant banks in each participating Member State
7
Methodology for assessing significance
8
• assessment and ongoing review of a bank’s significance
• determination of the date on which a change of status/supervisor takes effect and its impact on pending procedures
• ECB takes decisions on changes in status
• assessment and ongoing review of a bank’s significance
• determination of the date on which a change of status/supervisor takes effect and its impact on pending procedures
• ECB takes decisions on changes in status
Procedures
Procedures
• main criterion• Framework Regulation specifies how the total
value of assets is determined • significance is determined at highest level of
consolidation
• main criterion• Framework Regulation specifies how the total
value of assets is determined • significance is determined at highest level of
consolidation
SizeSize
• of significant banks • of less significant banks and their respective
NCAs• published on the ECB’s website and updated
regularly
• of significant banks • of less significant banks and their respective
NCAs• published on the ECB’s website and updated
regularly
ECB listsECB lists
Supervision of Significant Banks
Supervisory Tasks conferred to the SSM:
• Authorization, withdrawal and assesment of qualifying holdings
• Passport
• Ensure compliance with requirements on capital, leverage, liquidity, and governance
• Supervisory review and Supervisory powers (Pillar 2)
• Consolidated supervision and supervision of conglomerates
• On-site inspection
• Early intervention where a bank breaches requirements (coordinating with resolution authorities)
• Sanctions• Macroprudential tasks
9
Micro-prudential tasks
10
• ECB will chair colleges for any significant groups with branches/subsidiaries outside the SSM and in non-EU countries
• ECB will participate in the colleges for non-SSM groups with branches/subsidiaries that are significant within the SSM
• ECB will chair colleges for any significant groups with branches/subsidiaries outside the SSM and in non-EU countries
• ECB will participate in the colleges for non-SSM groups with branches/subsidiaries that are significant within the SSM
Colleges of
Supervisors
Colleges of
Supervisors
• CRD IV procedures no longer apply for the establishment of branches within the SSM
• for banks within the SSM wishing to establish a branch outside the SSM, the ECB will be the home authority for significant banks and the NCA for less significant banks
• CRD IV procedures no longer apply for the establishment of branches within the SSM
• for banks within the SSM wishing to establish a branch outside the SSM, the ECB will be the home authority for significant banks and the NCA for less significant banks
Passport issues
Passport issues
• ECB will act as coordinator if the bank belonging to the financial conglomerate is significant
• supervision of insurance firms is excluded
• ECB will act as coordinator if the bank belonging to the financial conglomerate is significant
• supervision of insurance firms is excluded
Financial conglomerat
es
Financial conglomerat
es
Supervision of significant banks
11
NCAs•assist the ECB by preparing a draft decision upon request or on their own initiative •follow the ECB’s instructions
Close cooperation
12
• ECB’s position will be comparable to the one it holds in respect of supervised entities and groups established in euro area countries
• ECB may not act directly vis-à-vis banks but through instructions, requests or guidelines addressed to NCAs
• ECB’s position will be comparable to the one it holds in respect of supervised entities and groups established in euro area countries
• ECB may not act directly vis-à-vis banks but through instructions, requests or guidelines addressed to NCAs
General principlesGeneral
principles
• establishment of JST for each institution• ECB will be consolidating supervisor• NCAs adopt decisions in respect of significant
supervised entities only upon the ECB’s instructions
• establishment of JST for each institution• ECB will be consolidating supervisor• NCAs adopt decisions in respect of significant
supervised entities only upon the ECB’s instructions
Significant
institutions
Significant
institutions
• ECB may issue general instructions, guidelines or requests to the NCA under close cooperation
• ECB may issue general instructions, guidelines or requests to the NCA under close cooperation
Less significan
t institutio
ns
Less significan
t institutio
ns
ECB’s supervisory powers
13
• ECB may require information that it considers necessary from any person referred to in Article 10(1) SSMR
• before making a request, the ECB will take into account the information available to NCAs
• ECB may require information that it considers necessary from any person referred to in Article 10(1) SSMR
• before making a request, the ECB will take into account the information available to NCAs
Request for informatio
n
Request for informatio
n
• ECB is the competent authority for supervisory reporting by significant banks and NCAs for that by less significant banks
• NCAs are the single entry point and perform initial data checks
• ECB is the competent authority for supervisory reporting by significant banks and NCAs for that by less significant banks
• NCAs are the single entry point and perform initial data checks
Supervisory
Reporting
Supervisory
Reporting
draft Framework Regulation sets out the procedures for:
• the decision to conduct an on-site inspection• the establishment of an on-site inspection
team• the notification of an on-site inspection
draft Framework Regulation sets out the procedures for:
• the decision to conduct an on-site inspection• the establishment of an on-site inspection
team• the notification of an on-site inspection
On-site inspection
s
On-site inspection
s
Transitional provisions
14
• ECB sends a decision to significant banks of their status two months prior to start of supervision
• bank has the right to be heard
• ECB sends a decision to significant banks of their status two months prior to start of supervision
• bank has the right to be heard
Start of the ECB
supervision
Start of the ECB
supervision
• supervisory procedures initiated by NCAs will generally continue after the ECB starts supervision
• supervisory procedures initiated by NCAs will generally continue after the ECB starts supervision
Continuity of existing procedure
s
Continuity of existing procedure
s
• transitional provisions will apply to countries that join the euro area after the start of the SSM
• comprehensive assessment of banks established in countries that join the euro area
• transitional provisions will apply to countries that join the euro area after the start of the SSM
• comprehensive assessment of banks established in countries that join the euro area
Countries adopting the euro
Countries adopting the euro
Continuity of
cooperation
agreements
Continuity of
cooperation
agreements
• MoUs and other cooperation agreements will continue to apply
• ECB may decide to participate
• MoUs and other cooperation agreements will continue to apply
• ECB may decide to participate