EBA欧洲银行-Introductory-statement-by-Andrea-Enria2C20Chairperson-of-the-EBA-091017_4页_191kb

EBA Introductory Statement Summary (09/10/2017)

Core Content

Andrea Enria, Chairperson of the European Banking Authority (EBA), delivered an introductory statement to the Committee on Economic and Monetary Affairs (ECON) of the European Parliament on 09 October 2017. The statement outlined the progress made in the repair of EU banks' balance sheets, the ongoing work on regulatory frameworks, and the challenges posed by Brexit and organisational relocation.

Main Points and Key Information

1. Banking Sector Recovery

• Capital Positions: Strengthened, with the CET1 ratio reaching 14.3% in June 2017, driven by a decrease in risk-weighted assets.
• Non-Performing Loans (NPLs): The NPLs ratio decreased by 90 basis points since June 2016, to 4.5%. The total NPLs stock remains around EUR 900 billion in the EU.
• NPLs Ratio in Member States: Above 10% in eight Member States.
• Market Conditions: The positive development is occurring while market liquidity is high, investors are seeking yield, and interest rates are at record lows.
• Roadmap: The Council's agreed roadmap allows for sharper focus and coordination in policy actions.

2. Secondary Markets for Impaired Assets

• Projects: The EBA is working on several projects to enhance the efficiency of secondary markets for impaired assets.
• Standardised Templates: Developing standardised templates for NPLs as part of a common data infrastructure.
• National Asset Management Companies: Contributing to the preparation of blueprints for national asset management companies under the Commission's leadership.
• Guidelines: Starting work on guidelines to strengthen NPL management, building on ECB work, and also covering loan origination, monitoring, and internal governance.

3. IFRS 9 Implementation

• Impact on Provisions: The introduction of IFRS 9 will drive significant and positive changes in provisioning, leading to a more forward-looking approach in accounting for loan losses.
• Reports Published: Two reports were published to estimate the impact of the new framework and assess the preparedness of EU banks.
• Recommendation: Banks, especially smaller ones, are encouraged to accelerate their preparation for the new standards.

4. Loss-Absorbing Capacity and MREL

• Monitoring Progress: The EBA is monitoring progress in building loss-absorbing capacity and compliance with MREL requirements.
• Eligible Liabilities Ratio: The average ratio of eligible liabilities to risk-weighted assets reached 38% (end 2016 data).
• G-SIBs Compliance: European G-SIBs are already compliant or close to compliance with TLAC standards entering into force in 2019.
• Need for Clarity: Resolution authorities should provide clear indications on individual MREL targets and finalise joint decisions.
• Market Environment: Banks should exploit the current positive market environment to accelerate the issuance of eligible liabilities.

5. Single Rulebook Construction

• CRD/CRR Review: The EBA has contributed to the review of the Capital Requirements Directive and Regulation (CRD/CRR) with several reports.
• Impact Assessment: Reports include in-depth assessments of the impact of proposed reforms on the banking sector, different types of banks, and lending to SMEs.
• G20 Reforms: The EBA is focused on implementing G20 reforms to enhance bank stability.

6. Regulatory and Legislative Priorities

• PSD2 Revisions: The EBA prioritised the implementation of the revised Payments Services Directive (PSD2), particularly the draft RTS on strong customer authentication and secure communication.
• Public Consultation: Received a record number of submissions and diverse comments from stakeholders.
• Balance Found: A delicate balance between competition and security was found, with concerns raised about the Commission's proposed amendments to the RTS.

7. Financial Technology (FinTech)

• Focus Area: The EBA has increased its focus on new technologies in traditional banking services.
• Reports Published: Reports on crowdfunding, virtual currencies, big data, and a broad-ranging FinTech report.
• Guidelines Issued: Guidelines on IT risk supervision and a recommendation on cloud outsourcing.

8. Capital Markets Union (CMU)

• Contributions: The EBA is contributing to the CMU objectives, particularly in the area of securitisation and covered bonds.
• Investment Firms: Recently issued an opinion on a new prudential framework for investment firms, aiming for a harmonised and proportionate set of requirements.

9. Brexit Impact and Regulatory Coordination

• Regulatory Challenges: Identified areas needing common regulatory and supervisory approaches across the 27 EU Member States to support a smooth relocation process and avoid regulatory competition.
• Subjects Covered: Authorisations, internal models, outsourcing, back-to-back operations, risk transfers, resolution, and deposit guarantee schemes.
• Opinion Finalisation: An opinion on these subjects is expected to be finalised soon.

10. Organisational Relocation and Challenges

• Relocation Strain: The EBA's relocation from the UK is putting the organisation under strain.
• Staff Commitment: Complimented the strong work ethic and commitment of the staff.
• Resignations: Noted an increase in resignations due to the relocation.
• Governance Review: The relocation coincides with a review of the EBA's founding regulation, offering an opportunity to refocus the mission and restructure the organisation.