EBA欧洲银行-2018-10-08-AE-initial-statement-at-ECON-2800229_4页_196kb

Andrea Enria's Speech Summary (08 October 2018)

Core Content

Andrea Enria, Chairperson of the European Banking Authority (EBA), delivered a speech to the Committee on Economic and Monetary Affairs (ECON) of the European Parliament, outlining the progress and challenges in the post-crisis banking sector in the EU. The speech emphasized the importance of regulatory coherence, supervisory convergence, and the role of the EBA in supporting the development of a more integrated and resilient banking market.

Main Points and Key Information

1. Banking Sector Recovery and Stability

• The EU banking sector has made significant progress in repairing balance sheets, with CET1 ratios stabilizing around 14.5% since 2017.
• Non-performing loans (NPLs) have decreased by EUR 250 billion over the past two years, with the average NPL ratio at 3.6%, the lowest since harmonized definitions were introduced.
• The EBA is working to accelerate the cleaning of bank balance sheets by improving the secondary market and reducing information asymmetries through NPL templates.
• The 2018 EU-wide stress test exercise is being finalized to identify remaining vulnerabilities.

2. Post-Crisis Reforms and Regulatory Convergence

• The post-crisis reform agenda is nearing completion, with the finalization of the "risk reduction package" being a key milestone.
• The EBA is preparing a paper on regulatory obstacles to cross-border consolidation to support the integration of banking markets.
• The EBA is prioritizing the implementation of the final Basel agreement of December 2017, starting with data collection from a wide range of banks.
• The EBA recommends waiting for the results of the Basel agreement implementation before making decisions to ensure a comprehensive assessment.

3. Bank Recovery and Resolution Directive (BRRD)

• The EBA highlights the need for decisive action to fully utilize the benefits of the BRRD.
• This includes developing fully operational recovery and resolution plans, complying with minimum requirements for own funds and eligible liabilities (MREL), and establishing agreements on critical functions.
• A more harmonized framework for the public interest test and common legal arrangements for bank liquidation are also essential.
• Progress on the European Deposit Guarantee Scheme (EDIS) is key to restoring trust between authorities and promoting an integrated banking market.

4. Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT)

• The EBA is conducting a comprehensive review of AML-CFT supervision across all EU Member States.
• This includes on-site visits, analysis of internal documents, and feedback to competent authorities.
• The EBA calls for more resources and greater clarity in its powers to enhance EU-wide AML-CFT supervision.

5. Technological Innovation and FinTech

• The EBA is addressing the impact of technological innovation on the financial services sector, particularly in the context of FinTech.
• A discussion paper and a roadmap have been launched to explore risks, opportunities, and challenges posed by FinTech.
• The EBA is focusing on authorisation regimes, regulatory sandboxes, and innovation hubs in the coming months.
• A review of the current approach to crypto-assets is also planned, guided by the principles of technological neutrality, consumer protection, and harmonized approaches for cross-border activities.

6. Capital Market Union (CMU)

• The EBA is actively contributing to the CMU project, including supporting new EU securitisation legislation and the development of covered bonds and European Secured Notes (ESNs).
• The EBA has also provided input on the proposal for a new regime for investment firms.

7. Supervisory Tools and Convergence

• The EBA has seen an increasing use of mediation and breach of Union law tools, with positive outcomes.
• However, it remains concerned that these tools are not sufficient to address weak supervisory practices and calls for stronger, independent reviews led by EBA staff.
• The EBA proposes new, more neutral governance arrangements for such reviews to foster convergence.

8. Brexit and EBA's Response

• Brexit is a top priority for the EBA, with a focus on contingency planning and the potential for a "no deal" scenario.
• The EBA has issued opinions urging the banking sector to prepare for such a scenario and is monitoring progress on relocation and supervisory cooperation arrangements.
• The EBA is facing challenges due to delays in finalizing the seat legislation, which could affect the relocation to Paris by the end of April 2019.
• The uncertainty surrounding Brexit is affecting EBA staff and their families.

Conclusion

Enria stressed the importance of maintaining and accelerating the adjustment of EU banks, ensuring convergence in supervisory practices, and addressing the challenges posed by technological innovation and Brexit. The EBA remains committed to supporting the development of a more integrated, stable, and innovative European banking market.