EBA欧洲银行-EBA-BS-2013-005Euribor-EBA-recommendation-to-NSAsfinal_12页_280kb

EBA Recommendations Summary: Supervisory Oversight of Euribor Panel Participation

Core Content

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) issued Recommendations on supervisory oversight of activities related to banks' participation in the Euribor panel in response to public concerns about the reliability and governance of financial market reference rates, particularly Euribor. These recommendations aim to enhance the transparency, integrity, and credibility of the Euribor rate-setting process through harmonised supervisory practices and stronger internal governance arrangements.

Main Recommendations

1. Supervisory Oversight Integration

• Competent authorities are recommended to integrate Euribor submissions into their supervisory review processes for credit institutions.
• The rate submission process must be covered by the panel banks' risk management and control policies.

2. Internal Controls and Compliance

• Panel banks should apply the four-eye principle to all Euribor submissions to prevent manipulation.
• Training should be provided to both submitters and users of the Euribor rate.
• Panel banks must draft or review internal codes of conduct for Euribor submissions, ensuring submitters and their managers acknowledge and commit to them.

3. Code of Conduct Requirements

• The code of conduct should include:
  • Effective procedures to prevent or control the exchange of information between staff with potential conflicts of interest.
  • Rules to avoid collusion among contributing firms and between firms and benchmark administrators.
  • Measures to prevent inappropriate influence on benchmark data submission.
  • A policy to remove direct links between the remuneration of staff involved in benchmark submissions and other activities that may create a conflict of interest.

4. Internal Control Mechanisms

• Panel banks must establish and maintain adequate internal control mechanisms to ensure compliance with the code of conduct.
• Controls should include comparisons of submitted data with actual, transaction-based, verifiable data.
• The compliance function should report on findings, including reverse transactions, to senior management regularly.
• Submissions and procedures should be subject to periodic independent internal and external reviews.

5. Record Keeping

• Panel banks must keep appropriate records of all relevant aspects of submissions, including the staff involved.
• Records should be stored in a format that allows for future access and includes a documented audit trail.

6. Encouragement of Panel Participation

• Competent authorities are encouraged to promote the participation of all banks active in the Euro money markets in the Euribor panel to ensure a representative and reliable benchmark.

Key Information

• Legal Basis: The recommendations are issued under Article 16 of Regulation (EU) No 1093/2010 (EBA Regulation).
• Compliance Deadline: Competent authorities must notify the EBA by 11.03.2013 whether they comply or intend to comply with the recommendations.
• Impact Assessment: The EBA conducted a high-level impact assessment due to the urgency of the matter. The recommendations are expected to generate minimal additional compliance costs, as they build upon existing EBA Guidelines on Internal Governance.
• Complementary Framework: These recommendations complement the EBA Guidelines on Internal Governance (GL 44, 2011), which already address internal organisation, risk management, transparency, and IT systems.

Compliance Confirmation

A compliance confirmation form is provided for competent authorities to:

• Indicate whether they comply or intend to comply with the recommendations.
• Provide reasons for non-compliance or partial compliance.
• Submit the form to compliance@eba.europa.eu with the reference 'EBA/Rec/2013/01'.

Conclusion

The EBA and ESMA aim to address the risks of manipulation and lack of transparency in the Euribor rate-setting process. By promoting harmonised supervisory practices, reinforcing internal governance, and ensuring proper record-keeping and conflict management, the recommendations seek to restore confidence in Euribor as a key financial benchmark.