EBA欧洲银行-EMFCBESCP3Response_3页_139kb

EMF Position Paper Summary: CEBS Consultation on Supervisory Review Process

Core Content

The European Mortgage Federation (EMF) has provided feedback on the CEBS consultation regarding the implementation of the Supervisory Review Process (SRP) under Pillar 2. The summary outlines the EMF's general appreciation for the consultation and their recommendations for a more effective and proportionate supervisory framework.

Main Views and Key Points

• Welcome to the Consultation:
  The EMF appreciates the opportunity to comment on the CEBS paper, though they suggest it would have been more useful if released after the Basel and Brussels documents.

• Proportionality and SRP Objectives:
  The EMF supports the concept of proportionality in the SRP. They emphasize that the SRP should not automatically lead to increased capital requirements or prudential measures unless a clear additional risk is identified. Well-managed institutions with sufficient capital under Pillar 1 should not face further surcharge.

• Use of Diverse Supervisory Tools:
  The EMF argues that capital surcharge should not be the sole tool used by supervisors. They advocate for the use of mitigating measures or changes to the institution’s risk and control systems as alternative means to address Pillar 2 risks.

• Consolidated Supervision:
  The EMF stresses the importance of implementing the Risk Consolidation Directive (RCD) consistently and transparently across Europe. They recommend that supervision should be conducted at the consolidated group level with a coordinating lead supervisor to ensure a unified approach. This method is seen as more practical and aligned with the goals of convergence and the Financial Stability Assessment Programme (FSAP).

• ICAAP and Proportionality:
  The EMF supports the concept of proportionality for both the Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP). They agree with the further detail provided in ICAAP High Level Principle III (a).

• Flexible ICAAP Review Period:
  The EMF suggests that ICAAP should not be reviewed annually as a mandatory requirement. Instead, the review period should be tailored to the institution’s risk profile, in line with High Level Principle VII, which makes ICAAP risk-based.

• Risk Factors List:
  The EMF believes that the list of risk factors in Annex 1 of the consultation should not be considered exhaustive. They highlight that many risks overlap and may be difficult to assess independently. Furthermore, this categorization may not align with the institution’s own ICAAP risk classification, as stated in ICAAP High Level Principle VIII (b).

• Risk Correlation:
  The EMF supports ICAAP High Level Principle VIII (g), which allows for the consideration of portfolio effects between different risks and avoids double-counting certain types of risk.

• Trigger-Target Capital Requirements:
  The EMF recommends further discussion on the application of Basel Committee Principle 3, particularly in relation to the trigger and target capital requirements. They highlight the need for consistency and transparency in the capital requirement calculation process, especially when credit and operational risks are considered under Pillar 2.

Conclusion

The EMF advocates for a supervisory approach that is proportionate, flexible, and aligned with the institution's risk profile. They emphasize the importance of a coordinated and transparent supervisory process at the group level and suggest that the use of a variety of tools, rather than solely capital surcharges, is essential for effective risk management and regulatory oversight.