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EBA Banking Stakeholder Group (BSG) Meeting Summary – 9 December 2014

Core Content

The EBA Banking Stakeholder Group (BSG) held a meeting on 9 December 2014 in London, which was the last to be held in the EBA's current premises before the relocation to Canary Wharf. The meeting focused on updates on regulatory and oversight developments, BSG workstream activities, and future planning.

Main Views and Key Information

Agenda Item 1: Welcome and Approval of the Agenda

• The meeting was opened by the BSG and EBA Chairpersons.
• The BSG Chairperson highlighted that this would be the final meeting at the current EBA location.
• The agenda was approved.
• The BSG was encouraged to reassess whether to submit a response to the European Commission's report on the ESFS, possibly in conjunction with other ESA Stakeholder Groups, due to budgetary constraints.

Agenda Item 2: BSG Chairperson's Update

• The BSG Chairperson shared updates from the Financial Services User Group (FSUG) meeting held on 24 October 2014.
• FSUG supported collaboration with the BSG on joint projects.
• The BSG was informed about the publication of the EBA's Policy Research Workshop papers.

Agenda Item 3: General Regulatory and Oversight Developments

• Stress Test Results: The EBA shared results from the EU-wide stress test exercise (published on 26 October 2014), and mentioned the possibility of conducting another in 2015.
• Concerns Raised: Some BSG members expressed concerns about the methodology used in the stress test.
• Risk Assessment Report: The EBA was working on a regular risk assessment report.
• Consumer Protection Day: A joint event with EIOPA and ESMA was planned for 3 June 2015 in Frankfurt.
• Basel III Compliance: The EU was found to be "materially noncompliant" with some Basel III minimum standards, while the US was "largely compliant".
• ESFS Review: The conclusions of the Economic and Financial Affairs Council's ESFS review were published. The EBA noted budgetary constraints and the possibility of reprioritising the 2015 work programme.

Agenda Item 4: BSG Technical Working Groups

• The BSG had submitted 10 responses to EBA papers since the last meeting and planned to submit 7 more opinions.
• The BSG was requested to consider a response to the EBA's Consultation Paper on shadow banking entities.
• The BSG was invited to contribute to the EBA's next Risk Assessment Report.
• Consultation Papers: The BSG decided to respond to several consultation papers, including those on materiality thresholds, MREL, IRB assessment methodologies, and product governance.
• Proportionality Project: The Ad Hoc Working Group on Proportionality presented its draft report. The BSG suggested adding case studies and specific recommendations. A further meeting may be held via conference call.

Agenda Item 5: Specific Regulatory and Oversight Updates

• SREP Guidelines: The BSG and EBA staff discussed the draft SREP guidelines, highlighting the importance of dialogue between supervisors and banks, and the role of internal models.
• Pillar 2 and TSCR: The concept of "Total SREP Capital Requirement" (TSCR) was introduced, combining Pillar 1 and Pillar 2 requirements. Concerns were raised about transparency and the articulation between Pillar 2 add-ons and combined buffer requirements.
• Risk Assessment Findings: The EBA staff outlined key findings from the upcoming Risk Assessment Report, noting improvements in capital levels and market risk volatility, but highlighting liquidity, funding, and IT/cyber risks as major concerns.
• Consumer Protection: The BSG raised concerns about the implementation of EBA guidelines on internet payment security and the potential impact of fines on profitability and consumers.
• PRIIPS: A joint discussion paper on Key Information Documents (KIDs) for PRIIPS was presented. The BSG requested details on the consumer testing process, which would be conducted by the European Commission.

Agenda Item 6: Presentation on Chartered Banker: Professional Standards

• A BSG member presented on the Professional Standards Board's work to establish professional banking standards.
• The BSG discussed whether a professional standards regime, similar to the medical profession, could be applied to banking.
• Concerns were raised about the diversity of the banking workforce and the feasibility of imposing a profession-based threshold.
• Ethical rules were questioned in terms of their applicability to experienced professionals.

Agenda Item 7: Preparation for the Next Day's Joint BSG/BoS Meeting

• The BSG took stock of the agenda and proposed speakers for the upcoming joint meeting with the EBA Board of Supervisors (BoS).

Agenda Item 8: Next Meeting Dates

• The BSG Chairperson outlined the 2015 meeting schedule, which includes several meetings in Canary Wharf.
• A suggestion was made to organise a joint dinner with BoS members before the next joint meeting.

Agenda Item 9: Any Other Items

• Two BSG members, Erin Mansfield and Magdolna Szőke, were announced as standing down from the group. They were thanked for their contributions.

Participants

• BSG Members: Representing various sectors including academia, consumers, SMEs, credit/investment institutions, users of banking services, and employees.
• EBA Staff: Andrea Enria, Adam Farkas, Mark Adams, Stefan Andresen, Cédric Coraillon-Parquet, Malgorzata Florczak, Piers Haben, Dirk Haubrich, Corinne Kaufman, Alessandro Nardi, Tomasz Nastarowicz, Elisabeth Noble, Tea Turcaniova.