Featured Product

    Danièle Nouy of ECB Presents Annual Report on Supervisory Activities

    March 26, 2018

    Danièle Nouy, Chair of the ECB Supervisory Board, presented the ECB annual report on supervisory activities for 2017. She presented the annual report to the Economic and Monetary Affairs (ECON) Committee of the European Parliament. She outlined the supervisory priorities for 2018 and discussed the key activities of ECB in 2017, particularly the work on non-performing loans (NPLs), targeted review of internal models (TRIM), Brexit, thematic reviews, and less significant institutions (LSIs).

    Danièle Nouy began by examining developments in the banking sector and highlighting the increase in average common equity tier 1 ratio of euro area banks, along with the overall decrease in NPL ratio for banks under ECB supervision. She also discussed the ECB approach to tackle NPLs and the work done in this area during the year. She welcomed the legislative proposal of EC on the introduction of statutory prudential backstops and mentioned that ECB and EC have closely collaborated on the legislative proposal and the Addendum on NPLs. Furthermore, she stated that the TRIM project is progressing according to plan. About 90 TRIM on-site investigations were launched in 2017. Meanwhile, the first results of the project have become available: cases of non-compliance with the regulatory framework in respect of issues such as model governance and model validation have already been addressed through supervisory decisions.

    With respect to Brexit preparations, she added that ECB and national supervisors expect to receive authorization applications by the second quarter of 2018 and that ECB is closely monitoring the relocation plans of banks. Speaking about the ECB thematic review on IFRS 9, she added that this exercise improved the quality of IFRS 9 implementation and allowed advanced data collection of the quantitative impact on the prudential figures. Moreover, ECB performed an in-depth assessment of the overarching governance of credit institutions and of data aggregation capabilities and reporting practices for a sample of banks. The results were communicated to these banks via supervisory dialog, and requests for remedial actions were included in the final follow-up letters. Joint supervisory standards have been developed on the licensing of LSIs with fintech business models. A common SREP methodology for LSIs was adopted and ECB harmonized the way in which national competent authorities exercise options and national discretions for LSIs.

    She also outlined the four supervisory priorities for 2018: focus supervision on business models and profitability drivers of banks; monitor credit risk, with the emphasis still being on NPLs and exposure concentrations; review internal models (TRIM) and continue to push for improvement of internal processes for capital and liquidity adequacy of banks; and focus on supervisory activities for this year’s supervisory stress tests and Brexit preparations. She concluded that a genuine banking union not only needs the three pillars, but it also has to be a real union, without regulatory fragmentation and ring-fencing of national markets. Regulatory harmonization has to be accompanied by the completion of the institutional architecture, with a credible common backstop to the Single Resolution Fund (SRF), which should cover both solvency and liquidity support, and a fully mutualized European Deposit Insurance Scheme (EDIS). Ms. Nuoy finally mentioned that "we need a more European approach" toward combating money laundering. The legislation should be harmonized, possibly with a European institution, which cannot be the Single Supervisory Mechanism, in charge of ensuring consistent and thorough application across member states.

     

    Related Link: Speech

    Keywords: Europe, EU, Banking, NPLs, TRIM, Banking Supervision, Brexit, AML, ECB

    Related Articles
    News

    SEC Finalizes Capital and Margin Requirements for Security-Based Swaps

    SEC adopted a package of rules and rule amendments to establish capital, margin, and segregation requirements for security-based swaps, under Title VII of the Dodd-Frank Act.

    August 22, 2019 WebPage Regulatory News
    News

    ECB Revises Prudential Provisioning Expectations for New NPEs

    ECB is revising its supervisory expectations for prudential provisioning of new non-performing exposures (NPEs) specified in the “Addendum to the ECB Guidance to banks on non-performing loans” (Addendum)

    August 22, 2019 WebPage Regulatory News
    News

    CFTC Proposes to Revise Information Collection on Margin Requirements

    CFTC is requesting comments on the burdens associated with certain aspects of the Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants (final rule).

    August 21, 2019 WebPage Regulatory News
    News

    FASB to Delay Effective Date for Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant all insurance companies that issue long-duration contracts, such as life insurance and annuities, additional time to apply the standard that addresses this area of financial reporting.

    August 21, 2019 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.9

    EBA published phase 2 of its technical package on the reporting framework 2.9, which includes validation rules, Data Point Model (DPM) data dictionary, and XBRL taxonomies.

    August 21, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Its Consultation Related to SME Financing

    FSB published responses received to the consultation on a report on the evaluation of the effects of financial regulatory reforms on small and medium-sized enterprise (SME) financing.

    August 21, 2019 WebPage Regulatory News
    News

    APRA Revises Related Entities Standard for Banks

    APRA published a strengthened prudential standard APS 222 on associations with related entities, with the aim to mitigate contagion risk within banking groups.

    August 20, 2019 WebPage Regulatory News
    News

    EBA and ESMA Issue Joint Response to EC Letter on Crypto-Assets

    EBA and ESMA issued a joint response to the EC letter, from July 19, 2019, on crypto-assets.

    August 20, 2019 WebPage Regulatory News
    News

    FSB on Responses to Consultation on Wind-Down of Trading Portfolios

    FSB published responses received to the consultation on the solvent wind-down of the derivatives and trading book portfolio of a global systemically important bank (G-SIB).

    August 19, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Consultation on Resolvability Disclosures

    FSB published responses received to the consultation on disclosures for resolution planning and resolvability of banks.

    August 19, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3681