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CEBS issued its work programme for 2009 and prepared a priority list for topics it needs to work on. Highest priority has been given to activities in relation to the current crisis situation and to CEBS’ deliverables connected to the EU roadmaps. However, given the changing developments in the financial markets, priorities can be changed in the course of 2009.
The priority list distinguishes between:
Ø activities are key and need to be delivered within the agreed upon time schedule
Ø activities are important for CEBS to deliver but could to some extent be postponed, if necessary, and
Ø activities that will only be undertaken in as far they do not conflict with the resources needed for priority 1 and 2 activities
A detailed template on the deliverables that are foreseen for 2009 is provided in appendix.
High priority projects for delivery in 2009 include:
• Crisis management - CEBS plans to set up recommendations on the functioning of colleges of supervisors in a crisis situation, implement practical tools at the level of the CEBS secretariat to facilitate information exchange between members in the current crisis situation, and analyse the supervisory implications of the national “rescue plans” and to look at crisis events by analysing the approaches taken by supervisors and supervisory tools applied.
Due to the unfolding of the crisis, the crisis management exercise in which CEBS would participate has been postponed.
• Early intervention mechanisms: the EU Commission is developing a white paper on early intervention tools for which a request for assistance has been sent to CEBS. CEBS’s review panel is currently preparing an overview of ‘all pre-liquidation stabilisation measures’ available at national supervisors for achieving timely solutions at a troubled institution as well as under which conditions these measures can be used. There is a genuine interest to EU supervisory authorities to comment on this EU initiative and if necessary to 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. CEBS will also assess the progress made by the banking industry in enhancing the transparency of securitisation activities and will follow-up on its 2008 report on issues regarding the valuation of complex and illiquid financial instruments.
• Liquidity risk management: 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.
• Securitisation: CEBS will work on the implementation guidance of the revised regulation, notably on retention clauses.
Further issues include:
• Periodic risk assessments
• Guidelines on hybrid capital instruments
• Supervisory reporting
• Training programmes
• Pillar 2 measures
The second category of activities for 2009 includes besides ongoing topics:
• Pro-cyclicality: CEBS has been invited to work in an EU working group on the topic of pro-cyclicality. CEBS plans to liaise as much as possible with other work streams. In addition, CEBS will analyse the impact of declining capital levels.
• Amendments to the CRD: CEBS might develop level 3 tools. Apart from the work on hybrid capital instruments and the guidelines on securitisation, which are assigned a high priority, areas for which this is planned, are large exposures and national discretions and options. In addition, CEBS will 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 co-operation accordingly.
• Supervisory disclosure: In 2009 a study will be undertaken to amend the guidelines, which could take effect in 2010-2011.
• Financial conglomerates: The IWCFC will gear towards a study on the implementation of the directive and possibly on proposals for regulatory changes.
Further issues include items on Mediation and Delegation of supervisory competences.
Low priority activities 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-co-operative jurisdictions and the development of 3L3 fit & proper requirements
• Updating the guidelines on validation (GL10)
• Updating the Pillar 3 implementation study undertaken in 2007