01 February 2007

CEBS summary of discussions of proportionality workshop

CEBS published the summary of discussions of a workshop on the principle of proportionality jointly organised with three European Banking Associations on 11 January 2007 in London. The objective of the event was to bring together banking supervisors and industry representatives to have an open and informal exchange of views on the application of the principle of proportionality.

Among others, small, non listed banks argued that the principle of proportionality should be applied also to the disclosure requirements, and some participants supported a wider application, also beyond the CRD, for instance in the definition and application of requirements on large exposures and in the supervision of liquidity risk.

Some complex banking groups emphasised that risk management is the own responsibility of the bank, and no minimum standards are needed, and that the supervisor should rely on the overall risk management structure of large and sophisticated players, with accompanying regular reporting, and limit its role to the issuance of high level principles and dialogue with the banks.

CEBS representatives shared the view that the management should take full responsibility for the management of risks and the definition of adequate capital levels, but stressed that the supervisors have a responsibility to closely monitor and assess the outcome of this process.

On the role of CEBS and national authorities it was argued that if minimum standards are to be developed, probably at national level in order to take into account the specific context of local markets. On the other side, it was pointed out that this could give rise to level playing field concerns. At least in a second stage, CEBS could review the approaches developed at the national level and consider whether there is a case for supervisory convergence at the EU level.

Press release

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