EBA欧洲银行-2008-17-10-Final-feedback-document-on-CP18_76页_625kb

CEBS Consultation Paper (CP18) Feedback Summary

Background

CEBS submitted its consultation paper (CP18) on options and national discretions in the Capital Requirements Directive (CRD) on 22 May 2008, in response to the European Commission's Call for Technical Advice No 10. The consultation period ended on 15 August 2008, and 20 responses were received, most from trade associations, with 18 published on the CEBS website. The paper summarizes key feedback and outlines changes made to the advice in response.

General Comments

• Broad Support: Most respondents supported CEBS's proposals, seeing them as steps towards greater harmonization and supervisory convergence.
• Reducing Discretions: The reduction in national discretions was welcomed for promoting consistency in Pillars 2 and 3 and reducing competition distortions and administrative burdens.
• Local Market Conditions: Some respondents supported the idea that local market conditions or legal specifics may justify maintaining certain discretions. However, one respondent questioned the relevance of this argument in the context of the EU's single market objective.
• Criticism of Justification: Two respondents criticized CEBS's justification for not proposing specific changes to some national discretions, particularly the argument that changes should be part of a future overhaul. They also pointed out that lack of experience should not prevent the development of solutions.
• Risk Sensitivity and Proportionality: Some respondents felt that the concepts of 'risk sensitive' and 'proportionate' supervision were not practically useful. They argued that 'risk sensitive' solutions should align with internal risk assessments, while supervisors often adopt a more conservative approach.

Key Areas of Feedback

1. Own Funds

• Article 57: Most respondents supported CEBS's proposal, with some suggesting it should be made mandatory.
• Article 58: A majority preferred turning it into a general rule, as the criteria are clear.
• Article 59: Respondents emphasized the need for a common definition of own funds, especially for cross-border credit institutions.
• Article 60: Some respondents wanted to remove the discretion, while others disagreed with deferring decisions.
• Articles 61, 63.1, 64.3, 65: A general definition of own funds is highly welcomed, but some respondents argued for retaining options to reflect organizational structures.

2. Scope of Application

• Article 69.1: Some respondents disagreed with CEBS's assessment that the discretion is 'immaterial', arguing it disproportionately affects parent institutions with subsidiaries outside their home jurisdiction.
• Article 69.3: Similar concerns were raised about the impact on parent institutions.
• Article 70: One respondent supported CEBS's proposal, while others suggested making it mandatory or keeping it as a discretion.
• Article 72.3: Some respondents argued that Pillar 3 disclosures should be made at the consolidated level, and that the discretion should be turned into a general rule.

CEBS's Response

• CEBS acknowledges the need for further harmonization but insists that changes to national discretions, particularly those related to the definition of capital, should only occur in the context of a full review.
• It supports the idea of mutual recognition clauses where they address local market conditions and avoids introducing new levels of opacity in the supervisory process.
• CEBS is in favor of joint assessment processes, especially where they promote convergence, but is not in favor of making them binding.
• It advocates for letting most transitional provisions expire, as they were added late in the negotiation process and lack strong justification for permanence.
• CEBS emphasizes the importance of impact assessments and has taken industry input into account, though it would have liked more detailed cost information.

Way Forward

• CEBS plans to submit its final advice to the European Commission in October.
• It supports the Commission's efforts to incorporate improvements into the CRD as quickly as possible, ideally through the comitology process.
• CEBS will provide its own views on timing, except for those discretions where it recommends a transition period.

Feedback Table Overview

Conclusion

The consultation on CP18 received mixed feedback, with broad support for reducing national discretions and promoting supervisory convergence. However, there were concerns about the practical value of 'risk sensitive' and 'proportionate' approaches, as well as the need for certain discretions to remain due to local market conditions. CEBS has made adjustments to its proposals in response to these comments but remains cautious about making changes without a comprehensive review. The final advice is expected to be submitted to the European Commission in October, with a focus on maintaining the existing supervisory framework while improving clarity and consistency.