Supervision Newsletter Summer 2017
Interview
Preparing for Brexit: "The clock is ticking"
Sabine Lautenschläger, Vice-Chair of the ECB’s Supervisory Board, talks about developments in preparations by banks and supervision in light of the UK’s withdrawal from the European Union.
In Focus
Brexit: Authorisation process in practice
The ECB and the relevant national supervisor jointly carry out the licensing procedures for euro area banks, ensuring a consistent and thorough approach. Assessing each application takes time and, in view of Brexit, supervisors will need to focus on certain areas to avoid any unintended consequences.
Past and future: a mixed picture for profitability
Banks’ profitability in past years and their forecasts for the next years show a mixed picture, with profitability likely to remain an issue for some euro area banks. Although banks see a brighter outlook, their predictions may be optimistic considering the actual results over past years.
A consistent SREP methodology for LSIs
In 2018, the less significant institutions (LSIs) supervised by national supervisors will be assessed by a common methodology that incorporates important elements of proportionality. It will allow national supervisors ample flexibility to adjust activities to the specificities and economic significance of individual banks.
Key data
Liquidity Coverage Ratio on the increase
The Liquidity Coverage Ratio (LCR) which ECB-supervised banks are required to report at the highest level of consolidation has increased since Q3 2016, reaching an average of 141.74% by end-March 2017. Our Supervisory Banking Statistics now include the LCR data.
Recent Highlights
- 29 July 2017
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Interview with Sabine Lautenschläger in Mannheimer Morgen
Argues that further consolidation is needed in the banking sector and banks need to continue adjusting the way they operate. Also emphasises the importance of a common institutional framework for regulating banks.Interview
- 27 July 2017
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Public consultation on the guide to on-site inspections and internal models
Invites stakeholders to comment on a draft ECB guide to on-site inspections(OSIs) and internal model investigations. OSIs are a critical tool for banking supervision worldwide.Public consultation
- 30 June 2017
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ECB publishes second stocktake of NPL regimes
Review of NPL regimes in euro area countries highlights the importance of being proactive before NPL levels become elevated. The review also stresses that frameworks for managing NPLs should be robust from the start.Press release
- 19 May 2017
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Interview with Danièle Nouy in Talouselämä
Points out that many banks have very high cost-to-income ratio. While some banks are committed to tackling the problems they are facing, some are in denial and will have to change in order to improve.Interview
- 16 May 2017
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ECB publishes guidance to banks on leveraged transactions
Aims to establish sound origination and risk management practices to facilitate the smooth financing of the real economy and help identify such transactions to provide management with a comprehensive overview.Press release
Upcoming Events
- 6 September 2017
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SB Chair keynote speech
Supervisory Board Chair Danièle Nouy will outline the latest developments in banking supervision when addressing bankers and industry experts at the 22nd Handelsblatt Annual Banking Conference.
- 7 November 2017
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Second ECB Forum on Banking Supervision
The Forum will focus this year on Europe’s changing banking landscape in the context of ongoing banking integration, technological change and sustainable business models for banks.Conference
- 9 November 2017
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SB Chair hearing at the European Parliament
Supervisory Board Chair Danièle Nouy will discuss banking supervision issues with the Economic and Monetary Affairs Committee (ECON) at the European Parliament.
Did you know...
… that in April the European System of Central Banks successfully concluded a pilot to develop a standardised design of banks’ internal data to make data reporting easier, more consistent and more efficient. The BIRD – short for “Banks Integrated Reporting Dictionary” – describes precisely the data which should be extracted from banks’ internal IT systems, and the transformations to be applied, to derive reports required by authorities. The BIRD is available as a public good to banks and all interested parties; its adoption is fully voluntary.
Banks' integrated reporting