EBA欧洲银行-BSG-reponse-to-Consultation-Paper-on-Supervision-of-significant-branches-28EBA-CP-2016-24-292020-March-2017_4页_208kb

EBA Consultation Paper Summary: Supervision of Significant Branches

Core Content

The EBA Consultation Paper on the supervision of significant branches (EBA-CP-2016-24) addresses the need for harmonizing supervisory practices between home and host authorities for branches of European banks operating in other Member States. The paper outlines the views of the EBA Banking Stakeholder Group (BSG) on how to define and supervise significant branches, emphasizing the importance of clarity, efficiency, and the preservation of the Single Supervisory Mechanism (SSM) framework.

Main Views and Key Points

1. Scope of Supervision

• The BSG acknowledges the potential for increased supervision by host Member States due to economic and political uncertainties.
• It stresses that branches do not have independent legal status and are fully integrated into their parent institution’s supervisory framework.
• The guidelines should clearly define the scope of supervision for significant branches and ensure that the burden on branches is minimized.
• The paper highlights the need to distinguish between branches within the SSM and those outside, particularly noting that significant branches of European banks in a euro-zone Member State are not subject to host supervision when the parent company is also within the SSM.
• In cases where either the branch or the parent company is not in an SSM country, the home authority should remain the leading supervisory body.

2. Home and Host Authority Cooperation

• The EBA proposes that home and host authorities should share supervisory tasks efficiently, using delegation where appropriate.
• This should not undermine the existing distribution of powers and responsibilities.
• The college of supervisors should be able to take on the role of the supervisory authority for significant-plus branches, especially in cases where the parent company is within the SSM.
• The paper suggests that on-site inspections should involve both home and host authorities to ensure a coordinated approach, though this may blur the traditional roles between them.

3. Quantitative Criteria for Identification

• The current criteria in CRD IV for identifying significant branches are considered vague and lack transparency.
• The proposed guidelines add more complexity by introducing new criteria for "significant-plus" branches, which the BSG argues does not improve clarity.
• A table in the consultation paper illustrates the heterogeneity of current practices across Member States.
• The BSG recommends that EBA define more precise and quantifiable criteria to ensure predictability and fairness in the identification process.

4. Distinction Between Subsidiaries and Branches

• The BSG emphasizes the need to clearly differentiate between subsidiaries and branches, especially regarding loss absorption.
• Branches, being part of the parent institution, should be subject to less strict criteria than subsidiaries.
• Special attention should be given to branches that are systemically important in the host country, even if their parent institution is not systemic in the home country.
• The introduction of a Supervisory Review and Evaluation Process (SREP) at the branch level could conflict with the objectives of the Capital Requirements Regulation (CRR) and group recovery plans.

5. Importance of Dialogue with Banks

• The BSG highlights that dialogue between banks and competent authorities is essential in determining the significance of a branch.
• This discussion should be included in the final guidelines to ensure a balanced and informed decision-making process.

Conclusion

The consultation paper aims to improve the supervision of significant branches by enhancing coordination between home and host authorities and introducing more precise criteria. However, the BSG calls for a clear delineation of the supervisory perimeter, especially in relation to the SSM, and for maintaining the integrity of the parent institution’s supervisory framework. The paper also underscores the need for transparency and dialogue in the identification process to avoid potential abuses and ensure consistency across Member States.