EBA欧洲银行-CEBS-2008-202-rev-2-_Analysis-of-measures-under-national-rescue-plans__19页_208kb

Summary of the National Plans for the Stabilisation of Markets

I. Introduction

CEBS has conducted an analysis of the national rescue plans implemented by EU member states in response to the financial crisis, focusing on three key areas:

1. Overview of national rescue plans, including conditions, tools, and supervisory involvement
2. Assessment of general market stabilisation measures
3. Potential areas for further work by CEBS

The national rescue plans are based on the principles agreed by the Euro area summit on 12 October 2008 and endorsed by the European Council. The ECOFIN Council on 7 October 2008 also mandated deposit guarantee protection of at least 50,000 Euros, with some countries raising this to 100,000 Euros. The Commission has proposed a framework to promote convergence of deposit guarantee schemes, which is currently under review.

CEBS has noted that the US plan has evolved to resemble the EU approach, shifting from buying troubled assets to direct capital injections, which reduces the relevance of analysing its impact on EU banks. The report, prepared in November-December 2008, reflects the situation at that time and is not final, as the measures are still under development.

II. Executive Summary

Most EU member states have introduced state guarantees, capital injections, and liquidity support measures, often in combination. Key points include:

• 17 EEA countries have implemented measures to facilitate funding, primarily through guarantees, with some using special purpose vehicles.
• 14 EEA countries have explicitly designed capital support or recapitalisation measures, with a few already implementing them.
• Deposit guarantee protection has been increased to at least 50,000 Euros in most countries, though one has lower coverage with additional unlimited guarantees for banks in rescue schemes.
• Supervisory involvement in rescue plans is generally satisfactory, though differences in national plans affect regulatory convergence and level playing field.

The main challenges are the variation in recapitalisation measures, which may lead to competitive imbalances and regulatory divergence. CEBS is encouraged to address these issues, particularly regarding capital quality and buffer definitions.

III. Detailed Overview of Measures

III.1 State Guarantees and Funding Support

• Most countries provide government guarantees on bank debt, with varying caps (15–400 bln Euro), and some have introduced asset repurchase programmes for high-quality assets.
• Participation in these plans is voluntary, and financing is typically through government bonds, state budgets, or temporary swap arrangements.
• Supervisory involvement includes assessing the solvency and sustainability of banks, and defining eligibility and conditions.

III.2 Capital Support / Recapitalisation Measures

• Capital support is provided through shares, preference shares, and equivalent instruments, and is subject to conditions such as maintaining lending to SMEs and retail customers, changes in governance and remuneration policies, and dividend policy assessments.
• Eligibility criteria include an adequate level of own funds, and some countries require specific capital ratios (e.g., Tier 1 or Core Tier 1).
• Timing of applications and exit strategies are managed to ensure compatibility with regulatory capital levels.
• Limits on support vary, with some countries setting caps and others not.

III.3 Liquidity Support Measures

• A few countries have introduced liquidity measures, including asset purchases and swaps, often in conjunction with guarantees and capital support.
• The European Central Bank has provided liquidity measures, and national authorities have also implemented similar actions.
• Mechanics of liquidity measures differ across member states, but they are generally aligned with Eurosystem recommendations.

III.4 Expansion of Deposit Guarantee Protection

• Deposit guarantees have been increased to 50,000 Euros in most countries, with some raising it to 100,000 Euros.
• Some countries have introduced full guarantees for retail deposits and certain corporate deposits.
• A few jurisdictions have reduced payout periods for deposit guarantees.

IV. Assessment of Rescue Measures and Need for Coordination

IV.1 Supervisory Involvement

• Supervisors are extensively involved in the design and implementation of rescue plans, providing technical advice and assessing eligibility.
• They contribute to defining pricing, quality of assets, and conditions for reimbursement.
• Supervisors are tasked with ensuring level playing field and compliance with conditions, including no reference to government support in commercial dealings and limits on balance sheet growth.

IV.2 Differences in National Rescue Plans

• Despite following common principles, national differences in design and implementation have raised concerns about level playing field and regulatory harmonization.

• Key areas of concern include:

  • Choice of instruments: Preferred shares and similar instruments may dilute shareholder earnings and affect capital raising.
  • Pricing: Differences in pricing and conditions create potential unfair advantages.
  • Quality of capital: There is divergence in how capital instruments are classified, which may affect regulatory consistency.
  • Amounts of capital: Targets vary significantly, leading to procyclical effects and potential market distortions.
  • Banks' selection criteria: Stigma may delay access to support, affecting market stability.

These differences could lead to competitive imbalances and regulatory fragmentation, though current market conditions may not yet pose a significant threat. CEBS is encouraged to focus on areas within its supervisory remit, such as capital quality and buffer definitions, to promote convergence.

V. Conclusion

The national rescue plans have been effective in stabilising financial markets, but differences in their design and implementation raise concerns about level playing field and regulatory harmonization. CEBS should focus on addressing these issues, particularly in capital quality, buffer requirements, and supervisory coordination, to ensure a consistent and fair regulatory environment across the EU.