Supervision Newsletter Autumn 2016
INTERVIEW
“We aim to improve the resilience of banks and reduce system-wide risks”
Two years after the creation of ECB Banking Supervision, Supervisory Board Chair Danièle Nouy and Vice Chair Sabine Lautenschläger talk about key issues for banks in the euro area and how supervision is doing so far on the European level.
IN FOCUS
The Supervisory Review and Evaluation Process: what’s new?
So far, one of the important achievements of European banking supervision has been to harmonise the main tool of banking supervision, the Supervisory Review and Evaluation Process (SREP). Banks are now being assessed by the same yardstick across the euro area. This is a marked improvement from complying with supervisory requirements of up to 19 different national authorities.
IT risks to remain high, stocktake shows
The increased use of information technology (IT) in all kinds of banking processes, together with the growing danger of cyberattacks, has brought banks’ management of IT risks into sharp focus. Can cyberattacks be detected? Are banks’ infrastructures resilient enough? A stocktaking by the ECB has revealed nine IT risk areas and that risks will remain high for years to come.
KEY DATA
New banking statistics coming soon
The ECB will publish new data on balance sheet composition, profitability, solvency and credit risk by the beginning of December to enhance transparency regarding the banks we supervise. The data, which will be published on our website on a quarterly basis, will have a broader scope and contain more detailed information, including a country breakdown and the banks’ classifications.
RECENT HIGHLIGHTS
- 15 November 2016
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ECB publishes guidelines on assessment and monitoring of institutional protection schemes
Sets out how ECB assesses and monitors institutional protection schemes and how ECB and NCAs coordinate their approach where joint monitoring of schemes is required.Guidelines
- 14 November 2016
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ECB launches public consultation on guide to assessments of board members
Explains ECB’s supervisory criteria and procedures for determining suitability of bank board members. This is subject to public consultation until 20 January 2017.Public consultation
- 11 November 2016
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European Parliament – Regular hearing of Supervisory Board Chair, Danièle Nouy
Describes key developments in the banking sector and elaborates on the progress made on NPLs and a number of dossiers that are vital for the banking union, such as Basel reforms and securitisation.Hearing
- 7 November 2016
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Speech by Sabine Lautenschläger on two years of European banking supervision
Assesses the progress that has been achieved in the supervision of European banks since November 2014 and the challenges banks face given the changes occurring in supervision, regulation, profitability and digitalisation.Speech
- 3 November 2016
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ECB launches public consultation on harmonising supervisory rules for banks supervised by national competent authorities
Aims at harmonising certain options and discretions in Union law for banks under its indirect supervision to ensure a level playing field and limit compliance costs for banks.Consultation
- 2 November 2016
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Interview with Sabine Lautenschläger in Süddeutsche Zeitung
Stresses that supervision has become more objective and intensive and points out that banking is a business that depends on paying customers.Interview
- 19 October 2016
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Speech by Danièle Nouy on the shifting ground of banking
Elaborates on the changes in the banking industry from a supervisor’s perspective and explains the importance of systemic stability and sustainability of financial services.Speech
- 12 September 2016
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ECB launches public consultation on guidance to banks on non-performing loans (NPLs)
Addresses main aspects of strategy, governance and operations that are key to successfully addressing NPLs, provides recommendations to banks and sets out a number of best practices identified by ECB Banking Supervision that in future will constitute the ECB’s supervisory expectations.Speech
UPCOMING EVENTS
- 28 November 2016
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Supervisory reporting conference
Will discuss challenges that regulators, supervisors and the banking industry face regarding reporting requirements and introduce the publication of new banking data to enhance supervision transparency. The conference (attendance by invitation only) will take place in the ECB’s Eurotower premises in Frankfurt am Main.Conference
- 13 January 2017
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Public hearing on draft ECB guide to fit and proper assessments
Explains how ECB Banking Supervision evaluates the qualifications, skills and proper standing of a candidate for a position on the board of a bank, for example as chief executive officer or supervisory board member. The hearing will take place at the ECB’s premises in Frankfurt am Main and will be webcast live on its Banking Supervision website.Public hearing
DID YOU KNOW?
In its first two years, the ECB Supervisory Board took 2974 decisions. This included 1734 authorisations, 239 SREP decisions and 295 Own Funds decisions. The significant amount of authorisation procedures was due to the high number of fit and proper decisions, which alone came to 1633.