10 June 2009

CEBS Annual Report 2008

The report provides an overview of 2008 activities and provides an overview of the priorities for 2009. CEBS plans to set up recommendations on the functioning of colleges and develop detailed guidance on the composition of liquidity buffers.

The report provides an overview of it’s achievements in 2008, and provides an overview of the priority activities for 2009.

 

CEBS priority 1 activities in 2009:

• Crisis management: CEBS plans to set up recommendations on the functioning of colleges of supervisors in a crisis situation, to implement practical tools at the level of the CEBS secretariat to facilitate information exchange, and to analyse the supervisory implications of the national “rescue plans”.

• Early intervention mechanisms: CEBS prepares to comment on the Commissions white paper on early intervention tools. If necessary develop policy-recommendations, especially with a view to having a sufficiently streamlined approach for these tools for cross-border operating banking groups.

• Transparency, disclosure and valuation: CEBS will assess both the adequacy of the end 2008 disclosures of banks a well as the upcoming Pillar 3 disclosures presented to the market, and will present, if necessary, policy recommendations to increase the quality of these disclosures.

• Periodic risk assessments: CEBS will continue to deliver focused risk assessments to identify important risk areas, their relevance to banks, the measures banks have taken to mitigate these risks and possible policy responses needed.

• Liquidity risk management: Follow-up work on liquidity risk management, as already announced. CEBS will develop more detailed guidance on the composition of liquidity buffers and the definition of the survival period, as well as on internal transfer mechanisms, will develop criteria for assessing internal methodologies and will explore the possibility of developing a minimum set of common quantitative and qualitative information requirements.

• Colleges of supervisors and other network mechanisms: CEBS will draw lessons from the current experiences in order to improve the current co-operation and co-ordination supervisory mechanisms in place, as well as identify possible other networking mechanisms.

• Guidelines on hybrid capital instruments: CEBS will elaborate operational guidelines on the precise criteria for hybrids instruments to qualify as capital for regulatory purposes.

• Supervisory reporting: Several deliverables need to be agreed upon already in 2009, both on COREP and on FINREP.

• Training programmes: First 3L3 programme will be run and a structure will be set up within the secretariats to manage the trainings.

• Securitisation: In 2009, the revised CRD should modify the supervisory treatment of securitisation activities. CEBS will work on the implementation guidance of the revised regulation, notably on retention clauses.

• Pillar 2: In a number of these areas it is felt important to further develop a more harmonised approach, more specifically as regards to guidelines on the joint assessment process, and the range of practices between supervisory approaches to stress testing under Pillar 2

 

CEBS priority 2 activities in 2009:

• Pro-cyclicality: Participation in EU working group. CEBS already acts as a joint sponsor of the TFICF (together with the BSC) aiming for analysing the effects of the CRD on the economic cycle. Liaise with BCBS and FSF work. Analysis of the impact of declining capital levels.

• Amendments to the CRD: Monitor upcoming changes and possibly develop level 3 tools for large exposures, national discretion and options. High priority is given to hybrid capital instruments and the guidelines on securitisation. Elaborate guidelines on implementing the incremental default risk charge in the trading book, monitor the changes concerning home and host responsibilities, and might revise its tools for cross-border cooperation accordingly.

• Supervisory disclosure: The scope of the current supervisory framework could be enlarged. In 2009 a study will be undertaken to amend the guidelines, which could take effect in 2010-2011.

• Financial conglomerates: The IWCFC will focus on a study on the implementation of the Financial Conglomerates Directive in the different member states and possibly on the development of proposals for regulatory changes.

• Mediation: For 2009, a case study will be undertaken to learn how this mechanism could be utilised in practise.

• Delegation: The three levels 3 Committees will work in 2009 to deal with any possible follow-up work to their 2008 work on delegation of decisions/responsibilities. Further they will also assist the Commission in the continued work with regard to the options for voluntary delegation of supervisory competences.

 

CEBS priority 3 activities in 2009:

A number of activities have been earmarked as priority 3 activities. These activities will only be undertaken in 2009, when CEBS will have sufficient resources available. Given the current situation in the financial markets, it is uncertain whether that will be the case. Topics that have a low priority include:

• The development of a range of practises paper under Pillar 2 on interest rate risk in the banking book

• Possible follow-up work on diversification under Pillar 2

• Work on business, strategic and reputational risk, on internal governance and on economic capital models

• The establishment of a CEBS network on the treatment amongst member states on hybrid capital instruments

• Some topics in the intermediate 3L3 work programme, like the guidance on internal governance, the periodic report on non-cooperative jurisdictions and the development of 3L3 fit & proper requirements

• Updating the guidelines on validation (GL10)

• Updating the Pillar 3 implementation study undertaken in 2007

 

Annual report 2008

 

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