EBA欧洲银行-0720_Response_v2_7页_236kb

ESBG Response to CEBS Consultation Paper on Pillar II

Core Content

The European Savings Banks Group (ESBG), representing 24 members from 24 European countries, consists of 968 individual savings banks, with over 65,000 branches and nearly 757,000 employees. As of the start of 2003, the group's total assets amounted to nearly EUR 4355 billion, with non-bank deposits exceeding EUR 2080 billion and non-bank loans approaching EUR 2195 billion. The ESBG is a prominent advocate for savings banks and promotes business cooperation across Europe.

In response to the CEBS consultation paper on the application of the Supervisory Review Process (SRP) under Pillar II of the new Capital Adequacy Framework, the ESBG provides detailed feedback on various aspects of the proposed approach.

Main Comments and Views

Proportionality

• The ESBG supports the use of proportionality in the Supervisory Review Process (SREP) and Internal Capital Adequacy Assessment Process (ICAAP).
• They suggest that the criteria from Principle XI of the SREP (size, risk profile, and complexity) should be used as a guideline to ensure appropriate proportionality.
• The ESBG prefers this approach over the vague concept of "large and complex institutions".

Level of Detail and Supervisory Disclosure

• The ESBG finds some sections of the paper overly detailed and prescriptive, which may reduce flexibility for both supervisors and credit institutions.
• They advocate for increased supervisory disclosure to improve understanding and transparency, rather than imposing overly detailed rules.
• The ESBG recommends that the CEBS paper should be more prescriptive in certain areas, such as the public availability of criteria for capital assessments.

Consistent Implementation

• The ESBG emphasizes the need for a balance between consistent implementation of the Basel Framework across the EU and national flexibility.
• They believe that Member States should be allowed to use flexible solutions in areas where national fiscal or legal differences exist.
• The objective of a level playing field must be weighed against the specific needs of national markets.

Annex B on Definitions

• The ESBG regrets that Annex B attempts to cover all possible risk factors, while the Basel Framework only refers to material risks.
• They recommend removing the detailed list of definitions and instead referencing the concept of "material risks" throughout the paper.

Section 2 – Supervisory Review Process

• The ESBG supports Principle 1, which emphasizes the need for banks to assess their capital adequacy in relation to their risk profile.
• They suggest that similar recommendations should apply to supervisors, requiring them to have minimum requirements for their own processes.
• They prefer the wording "appropriate risk assessment capabilities" over "strong risk assessment capabilities" due to varying institutional sizes and complexities.
• The ESBG believes that the objective of consistency in capital assessments should be further specified.
• They argue that the SREP is not mandatory for all institutions and that the distinction between on-site and off-site supervision should be considered.
• The ESBG supports the high-level principles on outsourcing in the ICAAP but suggests a listing of key qualitative aspects would enhance certainty.

Section 5 – Supervisory Review and Evaluation Process

• The ESBG believes that the mandatory annual review of the supervisory evaluation is not suitable for all credit institutions.
• They recommend a differentiated approach based on the size, complexity, and risk profile of institutions.
• They also suggest that the review process should include both on-site and off-site methods, with the latter being sufficient for some categories of institutions.

Further Remarks

The ESBG also requests clarity on the following issues:

• Complaint Mechanism: Whether banks can complain against supervisory decisions and the process for doing so.
• Anonymity of Supervisory Disclosure: Whether supervisory actions should be disclosed publicly and, if so, how to ensure anonymity for individual institutions to prevent reputational damage or adverse credit effects.