EBF advisor: Gonzalo Gasos
Publication date: 14 March 2019
Executive summary
In recent months, supervisors and regulators have become increasingly concerned about potential window-dressing practices. The concern of supervisors is that some banks do not live up to their responsibility to maintain a sufficiently high leverage ratio and only meet the leverage ratio requirement when they have to report to supervisors. Several comments have sparked a debate on the global and European level that prompted the BCBS to launch a consultation with the aim to prevent those practices.
The EBF encourages supervisors to use their powers to enforce this requirement on an entity-specific basis. Furthermore, the EBF deems it important to further analyse and gain a better understanding of the market dynamics that could potentially indicate window-dressing. Those measures are necessary to limit the regulatory impact of those measures on banks that are compliant with the leverage ratio requirements. Moreover, the EBF believes that the final standards of the BCBS should be applied according to the local proportionality rules.
EBF contact:
Gonzalo Gasos, Head of Banking Supervsion, g.gasos@ebf.eu
Lukas Bornemann, Prudential Policy and Supervision, l.bornemann@ebf.eu
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]]>FROM THE EUROPEAN BANKING FEDERATION:
Risk Reduction Measures Package adopted in the EU Parliament
BRUSSELS, 16 April 2019 — The European Banking Federation sees the final vote today on the Risk Reduction Measures Package by the European Parliament as an important step towards the completion of the Banking Union, aimed at reducing risks in the banking sector as well as enabling banks to be stronger, more stable and more resilient.
Since the 2007 financial crisis, the European banking sector has always been supportive of the work conducted to implement reforms agreed at international level to strengthen the banking sector and address outstanding challenges to financial stability, including the intensive efforts to build this Risk Reduction Measure Package since November 2016.
The EBF regrets that the package failed to overcome most of issues leading to banking market fragmentation across the EU. Important constraints to free flow of capital and liquidity across the EU are still not properly addressed, ending-up in hampering risk-sharing across the Banking Union.
Says Wim Mijs, Chief Executive Officer of the European Banking Federation:
“Today’s vote marks an important step in the implementation of Basel III reform. European banks believe that it now is high-time to take stock of all the banking regulatory reform and assess its efficiency before rushing into additional rules.
“European banks now will have to allocate significant resources to deal with the approximately 70 mandates from the European Banking Authority. These mandates aim at correctly implementing the EU Banking Package in the respective jurisdictions, together with the transposition in EU law of the completion of the Basel III rules.
“To avoid a further deterioration of the profitability of European banks the European Union should now aspire to reinforce the attractiveness of the EU economy, while promoting a competitive banking sector as well as reviving the Capital Markets Union project.”
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]]>Publication date: 8 May 2019
Executive summary
In April 2016, the Basel Committee on Banking Supervision (BCBS) published the Standards on Interest Rate Risk in the Banking Book (IRRBB).
The forthcoming Capital Requirements Directive (CRD 5) and Capital Requirements Regulation (CRR 2) implement the BCBS Standards in the regulatory framework of the European Union. The final text of the so-called Risk Reduction Measures (RRM) package including CRD 5 / CRR 2 was adopted by the European Parliament in mid-April 2019 and will need to be applied in two years.
CRD 5 mandates the European Banking Authority (EBA) to complement the directive by drafting Regulatory Technical Standards (RTS) to submit to the European Commission or by issuing guidelines within one year after the publication. In this context, the European banking industry, through the European Banking Federation (EBF), decided to articulate this memorandum which specifies the ”European Banking Industry Common Understanding of CSRBB as defined by EBA Guidelines”. The EBF uses this paper to provide its views on the EBA Guidelines’ definition of CSRBB, the monitoring process and the assessment of the framework.
EBF contact:
Lukas Bornemann, Prudential Policy and Supervision, l.bornemann@ebf.eu
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Speech by EBF Head of Banking Supervision Gonzalo Gasosz
Ljubljana, 29 May 2019
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AS PREPARED FOR DELIVERY
EBF Head of Banking Supervision Gonzalo Gasos with Slovenian winners of the 2019 European Money Quiz finals
Thank you, Stanislava Zadravec Caprirolo, for your invitation to participate in the Banking Conference of the Bank Association of Slovenia. I am pleased to visit Slovenia, also because it is a country with a keen interest in finance. That became obvious in the European Money Quiz, the financial literacy competition that we organise annually in the European Banking Federation with the participation of more than one hundred thousand students from across the EU. Two teenagers from the Slovenian team were placed first in the second edition last month. My deepest congratulations!
The last time I was in Ljubljana was in 2010 when I gave a presentation in the program on home-host cooperation. Rereading my slides, I realise how much the supervisory architecture has changed towards a European model and how little the banking system has moved from its national based model since then. In 2010, the first steps of the European System of Financial Supervisors were being taken. I claimed in my presentation that further bank consolidation would contribute to the Single Market’s integration and that we all should encourage the emergence of cross-border banking groups.
– This will be the first topic of my speech, the longstanding cross-border ambition in European banking and supervision;
– Secondly, I will raise some facts about the supervision of banks as businesses in the new regulatory framework;
– Number three, I would like to assess the interaction between regulation and supervision;
– Finally, I will refer to the role of the internal assessment of banks as the place where business and supervision come together, offering an opportunity to conduct business-conscious oversight in the post-regulatory reform era.
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]]>FROM THE EUROPEAN BANKING FEDERATION:
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EBF: ESCB report on integrated reporting system is timely step
BRUSSELS, 5 October 2020 – The European Banking Federation notes the report recently published by Europe’s central banks regarding an integrated data reporting system as envisaged in Article 430c of the Capital Requirements Regulation (CRR2). The EBF appreciates this ECB initiative as a timely step to trigger discussion among European authorities and between these and the banking industry.
The European System of Central Banks (ESCB) published its report[1] as input to a feasibility study currently being conducted by the European Banking Authority (EBA) on an integrated reporting system for the collection of statistical, resolution and prudential data from banks. The ESCB report proposes a number of measures addressing both lawmakers and the banking industry intentions to make bank reporting more efficient. EBA has included the feasibility study in its 2021 Work Programme as an objective for the third quarter.
The EBF has repeatedly underlined the need for an integrated and standardised framework for data reporting in the European Union. More than merely the volume of reporting requirements, the issue is the lack of efficiency and consistency among the key stakeholders in the design and transfer of data from banks to supervisors and regulators, and duplication of reporting between supervisors. An efficient solution will need to consider four principles: define once, report once, share information and enhance governance.
Europe’s banking sector is fully committed to working closely with authorities and is keen to fostering synergies by aiming for integrated and standardised reporting requirements. The EBF stands ready to discuss in detail the ESCB proposed views as well as the views of EBA and other relevant authorities.
[1] https://www.ecb.europa.eu/pub/pdf/other/ecb.escbinputintoebafeasibilityreport092020~eac9cf6102.en.pdf?743bc2defe61abe865e1857ab1a98337
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Media Contact:
Raymond Frenken, Director of Communications
r.frenken@ebf.eu +32 496 52 59 47
About the European Banking Federation:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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]]>EBF advisor: Lucia Pecchini
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Publication date: 30 September 2019
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General remarks:
The EBF welcomes the possibility to express its views on the Draft Guidelines on loan origination and monitoring. Having a consistent and functioning framework for loan origination and monitoring is key to ensure a stable credit market and financial stability.
As a general remark, we note:
Firstly, the objective of these guidelines is to support the creation of a single rule book and to promote convergence and a level playing field. This is in line with the rule that guidelines of the European supervisory authorities are meant to support harmonized interpretation and application of EU law. They are not meant to amend it or to add new requirements. However, many of the requirements in the current version of the guidelines, go beyond existing legal texts and the harmonisation/clarification mandate of the guidelines. Any changes to existing legislative frameworks should be subject to the codecision process. Also, given the breadth of application and implications of these guidelines, the consultation period is considered as not proportionate, nor timely. Many of the underlying L1 texts (e.g. Consumer Credit Directive, Mortgage Credit Directive) are currently undergoing an evaluation exercise by the European Commission which can lead to a review of the text via codecision procedure. This means that within a short time frame, new legislation could regulate the very same topics covered by the guidelines. Some other topics addressed in the guidelines are currently under negotiation (e.g. sustainable taxonomy) and will be applicable after the proposed date for entry into force of the guidelines.
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]]>There is a specific issue in the way bank assets in Europe are valuated. An issue that is blocking the further digital transformation and growth of banks.
Current prudential rules prescribe that the use of banking software is penalised instead of incentivised. Software is still valuated as an intangible asset, making it less worthy than basic office furniture.
In other words, EU banking rules treat software as a cost rather than an investment. Unlike in the US, European banks are forced to cover expenditure on software solutions with the same amount of capital.
Investing in software solutions, updates and development is crucial to remain competitive and to strengthen cybersecurity.
A recent survey conducted by EBF shows that European banks as of 2016 had invested more than €18 billion in software, despite the costly conditions in place.
Without a doubt, financial technology and software solutions have become critical functions of the work in banking.
Even in case of a liquidation, when bank assets are sold, software can still be used and thus proves its value.
If we want to let banks innovate, and therewith the European economy, treating software as an ordinary asset is a pure necessity.
Former MEP Cora van Nieuwenhuizen at the 2017 European Banking Summit:
Remarks by Gonzalo Gasos at the QED Banking Package Review event:
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]]>The European Banking Institute (EBI) is a research hub resulting from the joint venture of 27 highly regarded European academic institutions. These institutions aim to provide the highest quality legal and economic studies in the fields of banking regulation and supervision in Europe, and to fuel the dialogue between regulators, supervisors and industry representatives.
This research-based workshop, co-organised by the European Banking Federation (EBF) and the European Savings and Retail Banking Group (ESBG), will gather academics, regulators, supervisors and representatives of the industry to exchange views on the topic of proportionality, which has gained momentum at EU level and is, in particular, relevant for ongoing legislative debates on banking package reforms of CRR and CRD IV as part of the Risk Reduction Measures.
WHEN & WHERE
Wednesday 7 March from 10:00 – 15:30
(doors open at 9:30)
Single Resolution Board ‘s premises,
Treurenberg 22, 1049 Brussels
CONTACT DETAILS
Sarah Schmidtke
Tel: +32 2 508 37 19
PROGRAMME
09:30: Registration
10.00: Welcome by Thomas Gstaedtner, President of the Supervisory Board,
European Banking Institute
10.10: Keynote speech by Elke Koenig, Chair, Single Resolution Board
10.30: Introductory remarks by Wim Mijs, CEO, European Banking Federation
Followed by Chris de Noose, Managing Director, European Savings and Retail Banking Group
10.45: Session 1 – Reflections around the concept of proportionality
Academic Presentation:
• Christos Hadjiemmanuil, member of the EBI Academic Board, University of Piraeus
Discussants:
• Fernando Restoy, Chair, Financial Stability Institute
• Markus Ferber, MEP, Vice Chair, Committee on Economic and Monetary Affairs
• Gerhard Huemer, Director of Economic Policy, UEAPME
• Astrid Engel Thomas, Head of Legal Department, LOPI (Danish local and savings banks’ association)
12:00: Coffee break
12.20: Session 2 – The principle of proportionality in regulation
Academic Presentation:
• Marco Lamandini, Vice-President of the EBI Academic Board, University of Bologna
Discussants:
• Martin Merlin, Director of regulation and prudential supervision of financial institutions, DG FISMA, European Commission
• Peter Simon, MEP, Vice Chair, Committee on Economic and Monetary Affairs
• Christian Ossig, Chief Executive, Association of German Banks
13.30: Networking lunch
14.15: Session 3 – The principle of proportionality in supervision
Academic Presentation:
• Bart Joosen, President of the EBI Academic Board, VU University Amsterdam
Discussants:
• Thomas Gstaedtner, Head of Division, Directorate General Micro-Prudential Supervision II, ECB
• Isabelle Vaillant, Director of regulation, European Banking Authority • Angelique van Gerner, Head of Enterprise Risk, Triodos Bank N.V
15.30: Closing remarks by Enrico Leone, Chancellor, European Banking Institute
The post EBI event 7 March: Fostering a diversified banking market through proportionality: An academic review appeared first on EBF.
]]>EBF adviser: Blazej Blasikiewicz
Publication date: 28 April 2017
Together with LeaseEurope/Eurofinas, Verband der Automobilindustrie, True Sale International and Banken der Automobilwirtschaft the European Banking Federation on 24 April sent a letter to EU policymakers to underline the need for Europe to have a vibrant and effective securitisation market to help support funding and financing for customers across Europe.
The framework for the Simple Transparent and Standardised (STS) securitisation is a tangible example of how European Union legislation can broaden financing opportunities for EU companies, foster cross-border investment and ultimately have a positive impact on the EU investment outlook.
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