General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
March 16, 2018

EBA published its report examining the functioning of supervisory colleges in 2017. The report summarizes the EBA assessment of the activities of supervisory colleges against the EBA 2017 Colleges Action Plan and the relevant regulation.

The report concludes that significant improvements have been achieved over the last couple of years in college interactions, responsiveness, and in the quality, coverage, and reasoning of the joint decision documents. Further efforts are, however, expected both from home and host supervisors to enhance the joint decision process and ensure the completeness of the supervisory review and evaluation process (SREP) assessments. The key conclusions of the report include the following:

  • On organizational aspects of the colleges' work, the report noted that closely monitored colleges maintained frequent, typically quarterly, interactions in 2017, and most of them ensured an active cooperation with the EBA staff too.
  • On risk assessments, the report concluded that while they differed in terms of granularity across closely monitored colleges, all were a good summary of the supervisory evaluation. Nevertheless, there were no improvements on the timely distribution of mandatory annexes, covering capital and liquidity measures, in some affected colleges.
  • On joint decisions, the report identified considerable improvements in the quality of both the capital and liquidity joint decisions of closely monitored colleges, with well-reasoned and clear references to the conclusions of the SREP. Also the granularity of information underpinning the required level of capital in the joint decisions has improved considerably in the vast majority of colleges, along with the articulation of the Pillar 2 capital requirement, including its compositions. 
  • In nearly half of the closely monitored colleges, members were unable to reach joint decision on the assessment of group recovery plans, mainly due to requests for individual recovery plans in addition to the group ones, resulting in either partial joint decisions or unilateral decisions. Moreover, EBA pointed out that not all available tools for reaching joint decisions have been used by the relevant authorities, particularly the option to resolve disagreements through mediation.

Supervisory colleges are the fora for planning and coordinating supervisory activities, sharing important information about the supervised entity, conducting the supervisory risk/liquidity risk assessment, and reaching joint decisions on institution-specific requirements and on the assessment of group recovery plan. EBA identified four key topics for supervisory attention for 2017: non-performing loans and balance sheet cleaning; business model sustainability; operational risk, including conduct risk and IT risk; and comparability of risk-weighted assets and the use of EBA benchmarks in SREP. The report also assesses the extent to which these topics have been reflected in the work program of the colleges. 

 

Related Links

Keywords: Europe, EU, Banking, SREP, Supervisory Colleges, NPLs, Operational Risk, EBA

Related Insights
News

EBA Finalizes Guidelines on the STS Criteria in Securitization

EBA published the final guidelines that provide a harmonized interpretation of the criteria for a securitization to be eligible as simple, transparent, and standardized (STS) on a cross-sectoral basis throughout EU.

December 12, 2018 WebPage Regulatory News
News

OSFI Sets Domestic Stability Buffer for D-SIBs at 1.75%

OSFI set the level for the Domestic Stability Buffer at 1.75% of total risk-weighted assets, as calculated under the Capital Adequacy Requirements (CAR) Guideline.

December 12, 2018 WebPage Regulatory News
News

FSI Publishes Paper on Proportionality in Insurance Solvency Rules

FSI published a paper on proportionality in the application of insurance solvency requirements.

December 11, 2018 WebPage Regulatory News
News

BCBS Updates Framework for Pillar 3 Disclosure Requirements

BCBS published the updated framework for Pillar 3 disclosure requirements.

December 11, 2018 WebPage Regulatory News
News

EBA Issues Revised List of Validation Rules for Reporting

EBA revised the list of validation rules in its implementing technical standards on supervisory reporting.

December 11, 2018 WebPage Regulatory News
News

IMF Reports Assess the Stability of Financial System in Brazil

IMF published a report on the results of the Financial System Stability Assessment (FSSA) on Brazil.

December 11, 2018 WebPage Regulatory News
News

FED Governor Examines Pros of Imposing Capital Buffers on Large Banks

At the Peterson Institute for International Economics in Washington D.C., the FED Governor Lael Brainard summarized the financial stability outlook, highlighted areas where financial imbalances seem to be building, and touched on the related policy implications.

December 07, 2018 WebPage Regulatory News
News

US Agencies Propose Rule on Appraisals for Real Estate Transactions

US Agencies (FDIC, FED, and OCC) proposed a rule to increase the threshold level at or below which appraisals would not be required for the residential real estate transactions from USD 250,000 to USD 400,000. Comments will be accepted for 60 days from publication in the Federal Register.

December 07, 2018 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for December 2018

This week one answer was published as part of the Single Rulebook Questions and Answers (Q&A).

December 07, 2018 WebPage Regulatory News
News

FED Updates Reporting Form and Instructions for FR Y-14Q

FED published the updated reporting form FR Y-14Q for Capital Assessment and Stress Testing, along with the associated instructions.

December 06, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2325