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
September 28, 2017

Sabine Lautenschläger, Member of the ECB Executive Board and Vice-Chair of the ECB Supervisory Board, spoke at the ESE Conference 2017 in Vienna. She examined the achievements, challenges, and the way forward for the banking supervision in Europe. During the discussion, she focused on three issues: the rulebook for banks and how it relates to supervision; the toolbox that supervisors have at their disposal; and the role of the market.

Ms. Lautenschläger discussed creating a level playing field and harmonizing the bank rulebook in the context of differences arising from national options and discretions. She advises that “we must further harmonize the rulebook. Instead of EU Directives, we should rely more on EU Regulations, which can be directly applied in all member states. We should deal with the remaining O&Ds and we should stop passing more and more national laws, especially those which apply to banks that are supervised at European level. Instead, we should strive to cut down on some of these national laws, such as those concerning the reporting requirements that have become redundant as a result of the European Reporting Framework. Scrapping such laws would increase efficiency and reduce costs for both banks and supervisors.”

She highlights that “We have harmonized the main tool of banking supervision: the supervisory review and evaluation process, SREP for short.” However, the supervisory toolbox comprises more than the SREP and there are other things that we need to improve. First, there are tools that are applied in different ways in different countries (for example, on-site inspections at banks). Second, there are tools which exist in some countries but not in others (for example, the moratorium tool and deductions from own funds). Third, there are tools that are part of the European toolbox not once but twice, thus causing problems (for example, the overlap between early intervention tools and standard tools). “To sum up, we still need to work on the toolbox of European banking supervisors. We have to expand, harmonize, and streamline it.”

Ms. Lautenschläger discussed the Single Resolution Mechanism (SRM) and the supervisory approach of ECB and SRB in the resolution process, also highlighting the recent success in this area in Europe. She emphasized the “need to improve the tools that are needed to actually resolve a bank.” Moratorium is one such tool that still needs to be added to the European toolbox, as per Ms. Lautenschläger. Finally, she opines “that only systemically relevant banks will be resolved at European level. All other banks will be subject to national insolvency regimes. It might thus be warranted to harmonize these regimes across Europe to ensure a level playing field. All the things I just mentioned will have an impact on how supervisors assess and react to the risks of banks and the risks of bank failures.”


Related Link: Speech

Keywords: Europe, EU, Banking, Banking Supervision, SRM, SREP, Options and National Discretions, Moratorium Tool, ECB

Related Articles

FDIC Consults on Approach to Resolution Planning for IDIs

FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans.

April 22, 2019 WebPage Regulatory News

FDIC Specifies Submission Timeline for FFIEC 031, 041, and 051 Reports

FDIC published the financial institution letters (FIL-21-2019 and FIL-22-2019) that offer guidance on submission of Call Reports FFIEC 051, FFIEC 041, and FFIEC 031 for the first quarter of 2019.

April 19, 2019 WebPage Regulatory News

US Agencies Propose to Revise Call Reports FFIEC 031, 041, and 051

US Agencies (FDIC, FED, and OCC) proposed to revise and extend, for three years, the Call Reports FFIEC 031, FFIEC 041, and FFIEC 051.

April 19, 2019 WebPage Regulatory News

US Agencies Propose to Amend Rule on Supplementary Leverage Ratio

US Agencies (FDIC, FED, and OCC) are proposing to revise the capital requirements for supplementary leverage ratio, as required by the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

April 18, 2019 WebPage Regulatory News

EP Resolution on Proposal for Sovereign Bond Backed Securities

The European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS).

April 16, 2019 WebPage Regulatory News

HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5%

HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%.

April 16, 2019 WebPage Regulatory News

EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2

The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks.

April 16, 2019 WebPage Regulatory News

PRA Finalizes Policy on Approach to Managing Climate Change Risks

PRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix).

April 15, 2019 WebPage Regulatory News

PRA Seeks Input and Issues Specifications for Insurance Stress Tests

PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019.

April 15, 2019 WebPage Regulatory News

EBA Single Rulebook Q&A: First Update for April 2019

EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week.

April 12, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2944