Sabine Lautenschläger of ECB, while speaking at the Eurofi Financial Forum 2018 in Vienna, took stock of steps toward establishing a European system of banking supervision and embracing a common supervisory culture. She also described the key elements of a common supervisory culture, which, according to her, are a unified legal basis, harmonized administrative practices, and time and cooperation of the 19 countries and 26 authorities.
She highlighted that she measures the progress so far by the "frequency with which banks ask about changes in supervisory actions" and exemplified the work of ECB in this context:
- ECB strives to increase the number of cross-border on-site missions, with even more on-site supervisors working on banks outside their home country. The success of this initiative will largely depend on the number of on-site supervisors the national authorities are willing to send.
- ECB fosters exchange between supervisors from across the euro area and has established a rotation scheme for members of the Joint Supervisory Teams, which will help to spread a common culture. It also helps to avoid supervisory capture.
- ECB brings them together in many different working groups to devise training manuals and supervisory guidance.
However, ECB cannot create a common supervisory culture by itself. The national authorities can and should contribute, too. National authorities should embrace the European idea and seize the opportunity to contribute to a new, common supervisory culture. They should let more of their staff come to ECB, for a while at least. Let them work in a European environment and carry this culture back to their home countries. The idea of a European supervisory culture should be reflected in how we deal with banks. For example, national reporting requirements should be dropped; instead, the aim should be a single European reporting framework. She concluded that "a common supervisory culture is emerging, but it still needs to be nurtured and nudged."
Related Link: Speech
Keywords: Europe, EU, Banking, Common Supervisory Culture, Banking Supervision, Harmonization, Reporting, ECB
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.