EBA欧洲银行-cebs1091_AR2007_69页_1mb

Annual Report 2007 Summary

Core Content

The Annual Report 2007 of the Committee of European Banking Supervisors (CEBS) outlines the Committee's activities, achievements, and future priorities in the context of evolving financial supervision in the European Union. The report highlights the shift from merely developing guidance to actively promoting convergence and cooperation in supervisory practices. It also addresses the impact of the US subprime mortgage crisis on EU banking supervision and the need for stronger prudential frameworks and international coordination.

Main Viewpoints

• CEBS has moved from a focus on developing regulatory standards to delivering practical supervisory guidance.
• The subprime crisis has intensified the need for cooperation between national supervisors and enhanced prudential oversight.
• The Lamfalussy Review has prompted a re-evaluation of the regulatory and supervisory framework in the EU.
• CEBS is actively working on improving supervisory convergence, transparency, and risk management practices across the Single Market.
• The operational networking and supervisory colleges have become central to CEBS's work, enabling cross-border collaboration and common responses to financial risks.

Key Information

1. Overview of Progress in 2007

1.1 From Design to Delivery

• CEBS shifted its focus from creating guidance to delivering practical implementation of the Capital Requirements Directive (CRD).
• Introduced new tools to promote convergence and cooperation, such as:
  • Surveys on good practices in applying the CRD.
  • Use of Convergence Networks for internal expert dialogue.
  • Workshops and seminars to assist in the implementation of revised practices.
  • Dedicated market participant groups to identify and address implementation issues.

1.2 Market Turmoil

• The subprime mortgage crisis in the US significantly impacted CEBS's activities.
• CEBS intensified prudential supervision through:
  • Targeted interviews with bank management.
  • Detailed analysis of internal management information.
  • On-site examinations and enhanced reporting.
  • Increased cross-border cooperation between home and host authorities.
• Identified four main areas of concern:
  1. Liquidity risk management.
  2. Transparency of securitisation and structured products.
  3. Valuation of complex illiquid instruments.
  4. Cross-border financial management.
• Emphasized the need for robust internal governance, stress testing, and systemic risk monitoring.

1.3 The Lamfalussy Review

• CEBS contributed to the review of EU financial regulation, supervision, and stability.
• Proposed several initiatives to enhance regulatory and supervisory convergence, including:
  • Phasing out options and national discretions unless absolutely necessary.
  • Implementing the Lamfalussy structure in banking legislation.
  • Developing own initiative advice to the Commission on convergence gaps.
  • Reinforcing EU-wide supervisory reporting to ensure consistency across Member States.

2. Achievements in 2007

2.1 Advice to the Commission

• Provided technical advice on various topics, including:
  • Definition of own funds.
  • Large exposures.
  • Liquidity risk management.
  • Commodities business.
  • Supervisory equivalence in Switzerland and the US.
  • Options and national discretions in the CRD.

2.2 Convergence in Supervisory Practices

• Implemented FSC recommendations on financial supervision.
• Developed supervisory disclosure frameworks to improve transparency.
• Advanced Pillar 2 and Pillar 3 requirements.
• Introduced prudential filters to assess risks.
• Collaborated with the CRD Transposition Group to ensure consistent application of regulations.

2.3 Accounting and Auditing

• Focused on valuation standards for complex illiquid instruments.
• Promoted internal controls, governance mechanisms, and disclosure requirements.
• Worked closely with accounting and auditing standard-setters to align practices with European needs.

2.4 Cooperation

• Strengthened operational networking and supervisory colleges.
• Enhanced cooperation with third countries.
• Developed a framework for cross-border crisis management.
• Proposed variable geometry for operational networks to address financial stability issues.

2.5 Cross Sectoral Convergence

• Collaborated with Level 3 Committees to reduce supervisory burdens.
• Supported common work programmes and joint task forces.
• Focused on supervisory culture and training (3L3).
• Worked on impact assessment guidelines and medium-term work plans.

3. Process Improvements

• Operational structure: CEBS established expert groups and task forces to address specific issues.
• Consultation and dialogue: Improved consultative processes with market participants and stakeholders.
• Accountability: Strengthened mechanisms to ensure operational independence and transparent reporting to EU institutions.

4. Future Priorities

• Establish a clearer institutional framework for CEBS.
• Intensify cooperation between Level 3 Committees.
• Enhance dialogue with market participants.
• Consider funding from the EU budget for resource-intensive projects.
• Develop common EU-wide reporting standards and supervisory tools.
• Promote majority voting in decision-making to improve efficiency.
• Ensure alignment between EU and national objectives.

Conclusion

The 2007 Annual Report underscores CEBS's evolving role in promoting financial stability, supervisory convergence, and international cooperation. It highlights the impact of the subprime crisis, the Lamfalussy Review, and the ongoing efforts to align supervisory practices across the EU. CEBS remains committed to enhancing transparency, risk management, and cross-border coordination, while also advocating for structural improvements to meet the increasing demands of the financial sector.