EBA欧洲银行-BSG-2011-39-minutes-4th-meeting-BSG-16-November-2011_8页_146kb

Meeting Summary: 4th Meeting of the Banking Stakeholder Group (16 November 2011)

Core Content

The 4th meeting of the Banking Stakeholder Group (BSG) was held on 16 November 2011 at the EBA's offices. The meeting focused on the current challenges and future priorities of the EU banking system, with an emphasis on regulatory reforms, consumer protection, liquidity management, and capital requirements.

Main Issues and Developments in the EU Banking System

The BSG discussed several critical issues affecting the EU banking sector, including:

• Sovereign-Bank Loop: The destructive relationship between banks and government debt, with concerns over bond yields and the need for marking-to-market of bonds held in the banking book.
• Capital Risk Weights: Variability in capital risk weights across institutions using internal models.
• Term Funding Difficulties: The term funding market had dried up, leading to increased costs and challenges in accessing liquidity.
• Bank Leverage: An increase in leverage among Eurozone banks.
• Capital Mobilisation and Stress Tests: Challenges in raising additional capital and conducting stress tests.
• Macroeconomic Impact of Deleveraging: Concerns about the effect of bank deleveraging on SME lending and the broader real economy.
• Economic Slowdown and Stress Testing Assumptions: The probability of an economic slowdown and its implications for stress testing assumptions.

Andrea Enria highlighted that the EBA's stress testing assumptions were more severe than actual market conditions and emphasized the need to support capital strengthening rather than asset reduction.

Horizon Issues and Regulatory Concerns

BSG members raised concerns about:

• The timing and process of increasing capital requirements.
• The use of solvency ratios instead of capital levels for increasing capital.
• Incentivizing capital raising against sovereign bonds.
• The impact of CRDIV/CRR Binding Technical Standards and the risk of overregulation.
• The need for a level playing field across all financial institutions.

They also stressed the importance of internal models for risk weighting and consistent valuation methods for sovereign bonds across the banking and trading books.

Incorporating Consumer Protection into EBA Work

The BSG expressed support for the EBA's focus on consumer protection as a key priority. Key areas of concern included:

• Dispute resolution across the EU.
• Transparency in financial services.
• Prevention of mis-selling and consumer detriment in the mortgage market.
• Cross-border consumer protection and supervisory cooperation across ESAs.
• Financial education and supervisory convergence at the national level.

The EBA plans to organize a "Consumer Day" and will work with the SCFI on consumer detriment analysis. The BSG will support the EBA in this area and focus on the mortgage market in 2012.

Substantive Issues: Liquidity and Maturity Mismatches

The BSG discussed the organization of a technical working group on liquidity. The EBA subgroup on liquidity grouped various BTS into six work streams, including:

• Uniform reporting formats.
• Quantitative criteria for liquid assets.
• Deposit outflows.
• Currencies with limited availability of liquid assets.
• Outflows from derivative positions.
• Impact assessment.

Andrea Resti was tasked with establishing the technical working group on liquidity, and BSG members were encouraged to contribute on specific liquidity topics through short discussion papers.

EBA Work Programme and BSG Inputs

The EBA outlined its 2012 draft work programme, focusing on three main areas:

• Regulation: Leading in the creation of a single rule book, including binding technical standards on capital, liquidity, remuneration, and leverage.
• Oversight: Conducting high-quality analysis and promoting supervisory convergence.
• Operations: Enhancing internal control environments and implementing EU Internal Control Standards.

BSG members requested further input on the EBA's communication strategy, proportionality, impact assessments, and timelines for BSG contributions. Andrea Enria confirmed that the EBA would provide indicative timelines for BSG input and complement the EC's impact assessments with its own.

Consultation on EBA Guidelines

The BSG was presented with two discussion papers on Stressed VaR and Incremental Default and Migration Risk Charge (IRC). The EBA planned to launch a public consultation on these guidelines by the end of 2011. BSG members were invited to provide initial and written comments during the consultation period.

Key discussion points included:

• Applicability of Stressed VaR methodology.
• Multiplication factor for Stressed VaR.
• Use of normal distribution assumptions.
• Link to CVA risk and liquidity risk.
• Impact of IRC on existing methods and compliance.
• Reclassification of exposures from trading to banking book.

Christian Moore clarified that the Stressed VaR methodology should be tailored to each legal entity and that the IRC was largely compliant with current practices.

BSG Working Methods and Priorities

The BSG established four technical working groups on:

• Consumer Protection
• Bank Capital
• Bank Liquidity
• Systemic Issues

These groups will operate temporarily, with the possibility of renewal. Each group will have a coordinator, selected based on experience and availability. The Chair and Vice-Chair will be involved in all working groups to ensure consistency and transparency. BSG members may join a maximum of two groups to maintain fairness and balance.

The following coordinators were nominated:

• Robin Jarvis (Consumer Protection)
• Andrea Cesare Resti (Liquidity)
• Louise Lindgren (Capital)
• Sony Kapoor (Systemic Issues)

The EBA expressed willingness to improve reimbursement policies and provide support for the BSG's technical working groups.

Action Points

• BSG members to provide comments and suggestions on the technical working group mandates and timelines.
• EBA staff to investigate reimbursement policies and provide support for the working groups.
• BSG members to submit written comments on the EBA guidelines during the public consultation period.
• BSG members to provide CVs and authorisation for their publication on the EBA website.