On the organisational aspects of the colleges' work, the Report noted that closely monitored colleges maintained frequent, typically quarterly, interactions in 2017, and most of them ensured an active cooperation with the EBA staff too.
As to the risk assessments, the Report concluded that while they differed in terms of granularity across closely monitored colleges, all were a good summary of the supervisory evaluation. Nevertheless, there were no improvements concerning the timely distribution of mandatory annexes, covering capital and liquidity measures, in some affected colleges.
On joint decisions, the Report identified considerable improvements in the quality of both the capital and liquidity joint decisions of closely monitored colleges, with well-reasoned and clear references to the conclusions of the supervisory review and evaluation process (SREP). Also the granularity of information underpinning the required level of capital in the joint decisions has improved considerably in the vast majority of colleges, together with the articulation of the Pillar 2 capital requirement, including its compositions.
In around half of the closely monitored colleges, members were unable to reach joint decision on the assessment of group recovery plans mainly due to requests for individual recovery plans in addition to the group ones, resulting in either partial joint decisions or unilateral decisions. In this context, the EBA pointed out that not all available tools for reaching joint decisions have been used by the relevant authorities, in particular the option to resolve disagreements through mediation.
The EBA identified four key topics for supervisory attention for 2017, namely:
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non-performing loans and balance sheet cleaning,
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business model sustainability,
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operational risk including conduct risk and IT risk,
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Comparability of risk-weighted assets (RWA) and the use of EBA benchmarks in SREP.
The report also assesses the extent these topics have been reflected in the colleges' work program.
Press release
Report
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