Cross-border banking, both within the EU and beyond, is fundamental to banks' business models and requires good information exchange and cooperation between Member States and third countries to ensure effective supervision and the stability of the EU as a whole. To safeguard the Single Market, it is also important that any deficiencies in the regulatory framework regarding cooperation with third countries are addressed so that consistency of treatment can be facilitated, avoiding regulatory arbitrage.
In its Report, the European Banking Authority (EBA) concludes that although cooperation with third country supervisory authorities does not pose any major concerns, more clarity is needed especially in the equivalence assessment processes of third country supervisory and regulatory regimes, confidentiality provisions, and consolidated supervision.
In its Opinion addressed to the European Commission, the EBA believes that a clear legal mandate on equivalence assessments in the Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR) will clarify its role and will enable coordinated, consistent and continued equivalence assessments, as well as seek to ensure that the EBA has sufficient resources on an ongoing basis to fulfill these tasks.
Additionally, the EBA proposes to align the CRD with the Bank Recovery and Resolution Directive (BRRD) text to explicitly provide reference to the status of ‘observers' for third country supervisory authorities when they participate in colleges.
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Opinion
© EBA
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