31 March 2015

ECB（欧州中央銀行）、銀行監督に関する初の年次報告書を公表

Introductory remarks by Danièle Nouy, Chair of the Supervisory Board of the ECB, Brussels, 31 March 2015

Taking stock of the SSM’s first year

I would like to recall that the SSM was established as one of the key components of the Banking Union in order to ensure that strong and high quality supervisory standards are applied in a consistent manner across the euro area. As an integrated European supervisor, the SSM promotes certainty in the banking sector and aims at boosting the confidence of European citizens and markets in the resilience of credit institutions. The establishment of the SSM is therefore a key milestone in the reinforcement of the institutional framework of the euro area. 

First, it is no surprise that establishing the SSM was a very demanding task. The scale of the undertaking was unprecedented. It required comprehensive, harmonised and clearly defined supervisory standards and processes. To this end, we adopted a single manual for supervision and published a “Guide to Banking Supervision.” 

Second, key for every supervisor is its human capital. The SSM needed a large number of highly trained staff. Thankfully, we could draw on the deep knowledge and long experience of many national supervisors, but also beyond. The recruitment process raised wide interest of highly experienced candidates and led to a careful and successful selection. The SSM has strongly benefited from the good experience of supervisors from all over Europe. 

Third, the SSM required practical infrastructures such as state-of-the-art IT systems, and appropriate governance structures that ensure swift and effective decision making. In terms of meeting also these institutional and organisational challenges, the existing ECB services provided excellent support.

The ECB has been responsible for supervising euro area banks for five months now, both “directly” and “indirectly”. In institutional and organisational terms we have risen to the challenge and made significant progress but of course “experience is always the best teacher” and we will continue to learn.

Highlights from the Annual Report

Follow-up from the comprehensive assessment

Let me now highlight some of the key elements of the Annual Report. In my view, the successful conclusion of the Comprehensive Assessment stands out among the milestones we have achieved so far. It had unique features: notably the unprecedented combination of an Asset Quality Review with a macro-level Stress Test. Thousands of experts went through more than 800 individual portfolios, containing the credits of 119,000 borrowers. This analysis resulted in the identification of a capital shortfall in 25 banks. 

The successful conclusion of the Comprehensive Assessment was a pre-condition for a good start of the SSM in at least three ways. Firstly, it improved transparency and gave the new supervisor access to a vast array of data, which it used to build up knowledge about the banks we are now supervising. Second, and related to this, the Comprehensive Assessment resulted in the strengthening of balance sheets. And third, it gave the SSM the opportunity to start its supervision on a credible footing. 

I am proud of the way in which we delivered our results: we were able to present solid figures, on time, in close cooperation with the NCAs, and together with the European Banking Authority.

Identifying capital shortfalls under the AQR and the stress test was only the beginning. We have now moved to closely monitoring the implementation of the remedial actions that followed from the assessment’s outcome. The Joint Supervisory Teams or JSTs, as we call them, are controlling that banks are taking those findings on board, and that they are effectively and consistently implementing other remedial actions arising from the exercise, as well as properly addressing any residual shortcomings. In particular, additions to non-performing exposures and provisioning levels need to be reflected to the maximum extent possible in financial statements and, where this is not the case, in the Pillar 2 capital requirements. JSTs are also scrutinising portfolios not covered by the comprehensive assessment which may enclose material risks.

The supervisory priorities for 2015 

Let me now give you an overview of the supervisory priorities we have identified for this first year of operation of the SSM. These build upon the SSM Manual and the Comprehensive Assessment outcome, taking into account two main factors: the macroeconomic and regulatory environment and the main risks for the SSM banking sector.

Regarding the direct supervision of our 123 significant banking groups, the assessment of the sustainability of business models, in particular through the analysis of the profitability drivers is a priority. JSTs are also focusing on banks’ risk appetite and the related governance framework. Regarding capital adequacy, the starting points are the follow up of the Comprehensive Assessment and the Supervisory Review and Evaluation Process, or SREP decisions, in which we tell each bank under our direct supervision how much capital it must have. But the calculation of risk-weighted assets is also subject to our attention, and we will be launching soon a review of the validation of banks’ internal models. Moreover, monitoring the liquidity of the most vulnerable banks will remain a top priority in 2015. Credit risk will also be high on the agenda, as JSTs will focus on non-performing exposures and leveraged lending. Finally, cyber risk and data integrity are also on our radar.

Regarding the indirect supervision of the less significant institutions, the priority for 2015 is to finalise the design and set-up of the ECB’s supervisory approach, in cooperation with the NCAs and in line with the standards developed for the SSM as a whole. The wide variety of less significant institutions calls for an effective combination of local knowledge, proportionality and common methodologies. Here as well, we prioritise our activities to ensure an adequate focus on institutions with the highest systemic relevance and inherent risk level. The final goal is to promote best practices among NCAs and to ensure consistency of outcomes for all the less significant institutions.

For the horizontal activities, the priorities for 2015 are to foster harmonisation of supervisory approaches across the SSM; to promote a more intrusive approach to banking supervision and to set-up robust information-sharing and cooperation lines with supervisors, NCAs, banks and other authorities. It has always been very clear to us that the harmonisation of supervisory practices would not be possible without regulatory harmonisation. This is the reason why the ECB is looking closely at national options and discretions to reduce fragmentation within the SSM. This regulatory harmonisation is also key to improve the quality of capital, and thereby the capacity of banks to absorb losses. 

Let me also highlight that on top of these – I could say – “technical” priorities, we have already adopted a more “cultural” priority which is the development of a “common supervisory culture” within the SSM. This challenge is mostly internal; our responsibility is to make the organisation of work between the ECB and the NCAs natural, “built-in” so to say. And we are working very hard on this. For instance, JST coordinators were recruited notably on their management skills. We also foster cooperation within the JSTs through regular meetings and efficient processes. And we have established networks for horizontal functions. This is essential to enable our highly skilled people – who are working all over Europe – to have a common ethos and work towards shared goals.

Conclusion: forward looking, quality supervision and supervisory convergence

Let me conclude with a reference to our mission statement and a plea: the overall objective of the SSM is to improve the quality and consistency of banking supervision within the jurisdiction of the SSM. While banks had been operating across borders for a long time, banking supervision in Europe in the past was characterised by fragmentation. In order to achieve our objective, it is necessary to converge with regard not only to supervisory practices but also to bank regulation. The diversity in transposing the European bank regulations in each Member State remains an obstacle. We need more harmonisation in this field, for example, in terms of a common capital definition, in particular by reducing differences stemming from national options and discretions. To deliver high quality and consistent supervision in the Euro area, the ECB needs a fully harmonised regulatory framework in the euro area, to ensure the safety and soundness of the banking system. It strives for a truly single rule book and it will actively contribute to the EBA’s efforts in this regard. But the SSM needs your support in this area of national options and discretions and your willingness to reduce them.

SSM supervision can only be effective if it can rely on an even regulatory ground. Our dedication to effective supervision has already become clear to the credit institutions. Although it has been only 5 months since assuming fully our supervisory tasks, we have shown our determination through our hands-on supervision. We have issued recommendations on dividends; we are preparing our supervisory process by insisting with the banks on the difficult questions, scrutinising their answers, and taking all necessary follow up actions in a timely manner.

Devoted to tough supervision, we strive at the same time to be fair and even-handed in our actions, while not pursuing a one-size-fits-all supervision approach. By balancing uniform supervisory anchor points with constrained supervisory judgment, we both ensure consistency across institutions and supervision tailored to credit institutions’ specificities. With this approach, we also accommodate banking diversity which I consider very desirable from a financial stability perspective. 

I am fully aware that following our approach will be challenging, in particular in light of the difficulties that arise from being a new organisation, operating during a transition period, and within a not fully harmonised regulatory framework. However, with a view to the tremendous effort we invested in setting-up the SSM I can assure you that I am absolutely confident that we are well-prepared and ready to live up to our high standards and objectives.

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