The BSG strongly supports all institutional arrangements (including the establishment of the stakeholder groups of the European Supervisory Authorities, ESAs) that facilitate stakeholder inputs into the regulatory process. The BSG was formed as a result of the creation of the EBA for pan-Europe bank regulation and supervision and has faced the biggest-ever changes in bank regulation. The BSG is an integral and important part of the requirement for the EBA to consult with stakeholders in areas relevant to the tasks of the EBA. Discussions at BSG meetings, the work of its Technical Working Groups, and the reports produced by BSG, provide key inputs to the EBA’s work.
This Report covers four main areas:
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the appointment and structure of the BSG and its membership;
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the working methods of the Stakeholder Group and the interface with the EBA;
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the work of the Technical Working Groups that were established early in the BSG’s term of office,
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and the output of the BSG.
The BSG was established in the aftermath of a major banking crisis and at a time when the banking sector in many European countries faced formidable challenges in difficult economic circumstances. These have, therefore, been challenging times for banks, regulatory authorities, bank supervisors, and a wide range of stakeholders represented in the BSG. All aspects of bank regulation are changing in this major restructuring of the regulatory regime: capital, liquidity, bank structure, recovery and resolution arrangements, the style and content of bank supervision, and consumer protection.
When the mandate of the BSG began in March 2011, not only was it an entirely new Group, so also was the European Banking Authority itself. Furthermore, the BSG needed to define its procedures and interpret its mandate in the context of the banking crisis, and at a time when the EBA was under-resourced and had not produced documents partly because EU legislation (most especially with respect to CRD IV) for the basis of EBA Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) had been delayed. In the area of consumer protection, the EBA had yet to create a Consumer Protection Unit.
The mission of the BSG is to inform and advise the EBA on all aspects of its work drawing on the perspectives, expertise, and experience of the different constituencies represented on the BSG. Within this context, it is committed to effective and efficient regulation (effective in that regulation achieves what it is designed to do), and efficient in that it is proportional and not unnecessarily burdensome. In particular, regulation should not impede the key role of banks in the economy. It is further committed to the objective of establishing a single rulebook for the EU area and a common supervisory culture so as to limit the scope for regulatory arbitrage both within countries and between them. In pursuing this mission, the specific roles of the BSG are to inform and advise EBA on regulation before final decisions are made most especially with respect to RTSs and ITSs; to monitor the work of EBA and its work programme; and to advise on market trends. A major role of the BSG is to give detailed and considered published comments on RTSs and ITSs.
The work of the BSG is time-consuming most especially when several RTS and ITS documents emerge at the same time. Many of the documents are highly technical in nature which means that the technical expertise within the BSG is crucially important. For this reason, the BSG created four Technical Working Groups to undertake detailed work in the areas of Bank Capital, Bank Liquidity, Consumer Protection, and Systemic Issues (also see below). Each BSG member became a member of one or two of the specialist groups. The choice of these four areas was designed to reflect the immediate priorities of the EBA and the likely work flow from the Authority. From the outset, the BSG was determined not to allow consumer issues to become marginalised as a result of the inevitable pressure arising from the crisis and urgent issues related to bank safety and soundness.
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