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EBA Board of Supervisors Teleconference Summary

Date: 12th June 2012
Time: 10:00hrs – 11:30hrs
Location: Telco

Core Content

The EBA Board of Supervisors (BoS) held a teleconference on 12th June 2012 to discuss developments in the banking sector and coordinate on potential emergency measures. The meeting aimed to enhance information sharing and cooperation across Member States, especially in light of the ongoing financial challenges in the European banking system.

Main Points and Discussions

1. Introduction and Purpose

   • The Chairperson, Andrea Enria, opened the meeting and reminded participants of the decision to hold regular teleconferences to exchange information on banking sector developments.
   • The BoS agreed on the importance of information exchange, ex-ante coordination, and strong European cooperation, even if Member States do not adopt identical emergency measures.

2. Capital Instruments and Recapitalisation

   • The Board discussed the 3rd report on the assessment of capital instruments for the recapitalisation exercise introduced in the previous BoS meeting (6-7 June 2012).
   • The Spanish Board Member provided updates on the situation of individual institutions in Spain and announced that Spanish authorities would invite the EBA to participate in the evaluation process.

3. Cyprus Capital Issuance

   • Several Members expressed support for a full write-down mechanism for the capital issuance in Cyprus.
   • However, the Chairperson emphasized that the original BCCS term sheet with a conversion feature is still preferable, as it provides more flexibility and aligns with the regulatory framework.

4. Government vs. Private Sector Subscription

   • It was noted that if an instrument is subscribed by the government and not the private sector, the EBA does not need to assess its features. In such cases, a partial write-down can be considered acceptable.

5. Spanish Issuance and Legal Flexibility

   • Regarding the Spanish capital issuance, members debated the terms of unconditional versus arbitrary instruments.
   • The conclusion was that the instrument can be accepted if the CRR rules (Capital Requirements Regulation) override national rules after January 2013.

6. Legal Check

   • A legal check with the Commission's services was planned to ensure a common understanding on the flexibility of payment provisions.

Key Information

• Participants:

  • Chairperson: Andrea Enria
  • Alternate Chairperson: Matthew Elderfield
  • Voting Members and Alternates: Represented by various national central banks (NCBs) from across the EU.
  • Observers: Included representatives from Norway, Iceland, Lichtenstein, and Croatia.
  • Institutions: Representatives from the European Commission, European Central Bank, ESRB, EIOPA, and ESMA were present.

• EBA Staff and Directors:

  • Executive Director: Adam Farkas
  • Director Oversight: Piers Haben
  • Director Regulation: Isabelle Vaillant
  • Director Operations: Peter Mihalik
  • Policy Analysis and Coordination: Corinne Kaufman
  • Staff Members: Delphine Reymondon, Pilar Gutierrez, Despina Chatzimanoli, Meri Rimmanen, Paolo Bisio, Patricia Juanes, Joseph Mifsud

• Next Steps:

  • The next BoS conference call on "General Info Sharing" is scheduled for 18 June 2012, focusing on the impact of the Greek elections.

Conclusion

The meeting underscored the importance of cooperation and coordination among EBA members in addressing banking sector challenges. It highlighted the need for flexibility in capital instruments, the role of the CRR, and the legal alignment on payment provisions. The Spanish and Cypriot cases were central to the discussion, with a clear preference for structured approaches that ensure regulatory consistency.