1. CEBS’ role in the CRD implementation
José María Roldán | 12 Jan 2006

2. Outline Evolving markets and EU banking supervision
CEBS - main tasks and challenges
Consistent implementation of CRD
Convergence in supervisory practices
A review of progress made so far
Supervisory disclosure
Guidelines related to the CRD implementation
Harmonisation of reporting requirements
What next?
Monitoring and assessing CEBS’ work
Continued efforts to build European supervisory culture
José María Roldán | 12 Jan 2006

3. Evolving markets and the EU banking supervision
Banking market:
Cross-border activity
Consolidation
Centralisation of business functions at group level
Outsourcing of activities
Diversity of banking structures
Regulatory framework:
Basel II (CRD) risk-focused supervision
IAS/IFRS new standards, with impact on supervisory tools
Post FSAP implementation and convergence of practices
Response: the Lamfalussy process - CEBS
José María Roldán | 12 Jan 2006

4. Advice to the Commission
CEBS – main tasks
Advice to the Commission
Consistent implementation and application of directives (especially CRD) and convergence of supervisory practices (Lamfalussy level 3)
Exchange of information
José María Roldán | 12 Jan 2006

5. CEBS – main challenges
Potential divergence in directive implementation
National options and discretions
Additional layers of national rules (“goldplating”)
Different interpretations
Complex and possibly fragmented supervisory process
Misalignment of legal and operational structures in banking groups
Risk of overlapping or conflicting supervisory assessments
Validation of models and Art. 129
Supervisory Review Process (Pillar 2)
Administrative burden
Compliance costs
Differences in supervisory reporting
Duplication of contacts
José María Roldán | 12 Jan 2006

6. A review of progress made so far
Potential divergence in implementation
Supervisory disclosure framework
Complex and possibly fragmented supervisory process
Enhanced home-host co-operation, Pillar 2 and validation guidelines
Administrative burden
Harmonised reporting requirements
José María Roldán | 12 Jan 2006

7. Supervisory disclosure
Supervisors are required to publish (CRD Art. 144):
Rules and guidance
How options and national discretions are exercised
Supervisory review and evaluation
Statistical data on key implementation issues
Additional information on reporting frameworks
Easy access and meaningful comparison  peer group pressure
Internet access via CEBS website
Links to national websites
Comparable information
Common language - English
José María Roldán | 12 Jan 2006

8. Supervisory disclosure
José María Roldán | 12 Jan 2006

9. Guidelines related to the CRD implementation
CRD Art. 129 to 132, enhanced co-operation and role of the consolidating supervisor
CEBS Guidelines, a practical framework for:
Co-ordinated planning
Structured exchange of information
Avoidance of redundancies
Optimal use of supervisory resources
Concrete examples: risk assessment and validation
José María Roldán | 12 Jan 2006

10. Guidelines related to the CRD implementation
Supervisory Review Process (Pillar 2):
Ensure institutions have adequate capital to support all risks in their business
Encourage institutions to manage risk
Foster an active dialogue between institutions and supervisors
Covers the relationship between:
Supervisor’s SREP (the Supervisory Review and Evaluation Process); and
Institution’ ICAAP (the Internal Capital Adequacy Assessment Process)
Proportionality is the key:
For large complex institutions  in-depth and “tailor-made”
For smaller institutions  likely to be quite standardised
José María Roldán | 12 Jan 2006

11. Harmonisation of reporting requirements
Common frameworks for:
Financial data for prudential purposes
Reporting of the solvency ratio
CRD and IFRS  window of opportunity for change: less administrative burden for cross-border groups; limited impact on small, local banks
Common templates and possibilities presented by new technologies (XBRL)
Consultation: criticisms on size and national flexibility
But new rules are complex and supervisors move from quite different starting points
José María Roldán | 12 Jan 2006

12. What next?
Compendium of CEBS’ standards, guidelines and recommendations
for supervisors and market participants
flexible, internet-based structure, easy to update
consistent terminology, definitions
Inventory of implementation issues: case studies, surveys
Networking mechanisms – day-to-day co-operation
Training programmes and staff exchange
New tools, if necessary
José María Roldán | 12 Jan 2006

13. Conclusions
Differences across countries not wiped out, but visible, so that priorities for further work can be identified
Not a single supervisory interface, but a more coordinated and streamlined process
Not a single compliance process, but greater commonality of approaches and a process for further convergence where needed
a structured process for convergence and common European supervisory culture
José María Roldán | 12 Jan 2006

14. Questions?
Thank you! 14
José María Roldán | 12 Jan 2006

15. Contact details
Name: José María Roldán