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Presentation of the ECB Framework Regulation Organisational aspects

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Presentation on theme: "Presentation of the ECB Framework Regulation Organisational aspects"— Presentation transcript:

1 Presentation of the ECB Framework Regulation Organisational aspects
Tallinn, 26 February 2014

2 Timeline SSM Regulation enters into force Public hearing
Publication on the ECB’s website SSM takes over banking supervision Submission to the European Parliament 3 Nov. 2013 4 Feb. 19 Feb. by 4 May 4 Nov. 30 Jan. 2014 7 Feb. 7 March May Publication in Official Journal End of public consultation Supervisory Board endorses draft Framework Regulation at its first meeting Launch of public consultation

3 Legal basis Articles 6 and 33(1) SSMR 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. Article 33(2) SSMR ECB shall publish by means of regulations and decisions the detailed operational arrangements for the implementation of its supervisory tasks. Article 4(3) SSMR ECB may adopt regulations for the carrying out of its supervisory tasks. The framework will be an ECB regulation.

4 Structure of the draft Framework Regulation
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

5 ECB as a banking supervisor – institutional impact
Shared Services (IT, Legal, HR, Statistics)

6 SSM Functioning of the SSM ECB JST Less significant banks
oversees the system Grants/withdraws authorisations, assesses qualifying holdings JST (ECB/ NCAs staff) Grants/withdraws authorisations, assesses qualifying holdings May “call-up” direct supervision NCAs Direct supervision Direct supervision Significant banks Less significant banks

7 Banking supervision by the SSM
Direct supervision by the ECB Direct supervision by the NCAs Significant banks as defined under the SSMR by: size importance for EU or domestic economy significant cross-border activities Less significant banks when 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 Day to day supervision of significant Cis will be carried out by the ECB while the NCAs will do the same regarding less significant institutions. The ECB may “call-up” for direct supervision less significant Cis

8 Methodology for assessing significance
Procedures 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 Size main criterion Framework Regulation specifies how the total value of assets is determined significance is determined at highest level of consolidation ECB lists of significant banks of less significant banks and their respective NCAs published on the ECB’s website and updated regularly

9 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

10 Micro-prudential tasks
Colleges of Supervisors 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 Passport issues 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 Financial conglomerates ECB will act as coordinator if the bank belonging to the financial conglomerate is significant supervision of insurance firms is excluded

11 Supervision of significant banks
ECB is the entry point for requests (unless expressly provided otherwise) JST analyses and prepares a draft decision Decision-making Supervisory Board submits draft decisions to Governing Council NCAs assist the ECB by preparing a draft decision upon request or on their own initiative follow the ECB’s instructions

12 Significant institutions Less significant institutions
Close cooperation General principles 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 Significant institutions 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 Less significant institutions ECB may issue general instructions, guidelines or requests to the NCA under close cooperation

13 ECB’s supervisory powers
Request for information 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 Supervisory Reporting 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 On-site inspections 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

14 Transitional provisions
Start of the ECB supervision ECB sends a decision to significant banks of their status two months prior to start of supervision bank has the right to be heard Continuity of existing procedures supervisory procedures initiated by NCAs will generally continue after the ECB starts supervision Countries adopting the euro 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 Continuity of cooperation agreements MoUs and other cooperation agreements will continue to apply ECB may decide to participate

15 Thank you for your attention Jean-Christophe Cabotte jean-christophe
Thank you for your attention Jean-Christophe Cabotte

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