ECB Consults on Part 2 of Guide to Assessments of License Applications
ECB launched a public consultation on Part 2 of the guide to assessments of license applications. Part 2 complements the Licensing Guide published in March 2018 and both documents should be read together as one guide. Consultation ends on October 25, 2018. ECB will consider the comments received when finalizing this guide and publish a feedback statement. ECB has made available the draft guide, frequently asked questions (FAQs), and public consultation template on its Banking Supervision website.
Part 2 of the Licensing Guide focuses on the assessment criteria for capital requirements and program of operations, including business plans. While the national competent authorities act as the first point of contact for licensing applications, their assessments are conducted jointly with ECB, which is the competent authority for making the final decision to grant, extend, or withdraw a banking license in the euro area. As part of its evaluation of license applications, ECB assesses capital needs. Therefore, to ensure consistent application of practices within the Single Supervisory Mechanism, Part 2 of the Licensing Guide explains the stance of ECB on the expected capital at the time of authorization. Part 2 also indicates the main topics of interest to supervisors when they assess the program of operations. These include:
- Business model and associated risk profile of a credit institution
- Situation of the credit institution within the economic context,the business environment, and its financial projections
- Clarity and effectiveness of the organizational structure of the institution and its governance arrangements
- Internal control and risk management framework and IT infrastructure of the credit institution
The Licensing Guide is intended as a practical tool to support those involved in the process of authorization and to ensure a smooth and effective procedure and assessment, but it is not legally binding in nature.
Related Links
Comment Due Date: October 25, 2018
Keywords: Europe, EU, Banking, License Applications, CRR, FAQ, ECB
Previous Article
IMF Report on 2019 Article IV Consultation on Euro Area PoliciesRelated Articles
EC Publishes Regulations Supplementing Investment Firms Directive
The European Commission (EC) published three Delegated Regulations (2021/2153, 2021/2154, and 2021/2155) to supplement the Investment Firms Directive (IFD or Directive 2019/2034).
FSB Report Examines Trends in Non-Bank Intermediation in Americas
The Financial Stability Board (FSB) published a report that presents results of the sixth non-bank financial intermediation monitoring exercise in the Americas.
BIS Discusses Regulatory Approach for Non-Bank Intermediation
The Bank for International Settlements (BIS) published the December issue of the Quarterly Review, which analyzes the non-bank financial intermediation mechanisms that could undermine financial stability.
BoE Calls for Vendor Input for Data Collection Transformation Program
The Bank of England (BoE) opened the Alternative Liquidity Facility, or ALF, for deposits from the participating UK-based Islamic banks for the first time.
APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness
APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).
EBA Proposes Standards on Interest Rate Risk in the Banking Book
The European Banking Authority (EBA) launched three consultations on technical aspects of the revised framework capturing interest rate risks for banking book (IRRBB) positions, with the comment period ending on April 04, 2022.
EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance
The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).
EBA Sets Out List of Banks for Mandatory Basel III Monitoring Exercise
The European Banking Authority (EBA) published the sample of banks for the mandatory Basel III monitoring exercise, which will refer to the December 2021 data.
FED Revises Complex Institution Liquidity Monitoring Report for Banks
The Board of Governors of the Federal Reserve System (FED) is adopting a proposal to revise and extend for three years the Complex Institution Liquidity Monitoring Report (FR 2052a) for banks.
FSB Sets Out Good Practices for Crisis Management Groups
The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.
