EBA Publishes Final Guidance on Supervision of Significant Branches
EBA published the final guidelines on supervision of significant branches. Prompted by the increasing demand to establish branches across the EU, these guidelines are designed to facilitate cooperation and coordination between the competent authorities involved in the prudential supervision of significant branches of EU institutions established in another member state. These guidelines will facilitate cooperation and coordination of supervision of the largest and systemically important branches, the so-called “significant-plus” branches.
The final guidelines provide a framework for the identification of significant-plus branches through a common assessment performed by home and host competent authorities of the branches' relevance to the institution or the financial stability in the host member state. Furthermore, the final guidelines outline a coordinated approach to their supervision and the assessment of recovery planning facilitated through the framework of colleges of supervisors. The final guidelines propose a set of principles that competent authorities should comply with in the performance of risk assessments of the institution having such significant-plus branches, such as exchange of supervisory intelligence and information, planning of supervisory activities, on-the-spot checks and inspections, application of supervisory and precautionary measures, and allocation of tasks between authorities.
The final guidelines do not interfere with the tasks and responsibilities conferred on the consolidating supervisor and the home and host competent authorities by the Capital Requirements Directive (CRD) and Bank Recovery and Resolution Directive (BRRD). They also do not limit the freedom of institutions to establish branches in other member states, nor do they create additional obligations to institutions in terms of Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP) or reporting.
Related Link: Guidelines on Supervision of Significant Branches (PDF)
Effective Date: January 01, 2018
Keywords: Europe, EU, Banking, Significant Branches, CRD, BRRD, Systemic Risk, EBA
Featured Experts
Blake Coules
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Previous Article
IAIS Newsletter for June 2017Next Article
EIOPA Releases Editable Template for IPIDRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
