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.
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.
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.
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.
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.
… 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