EBA欧洲银行-Clean-V3-formatted-CEBS-2008-124-CEIOPS-SEC-08-54-IWCFC-2008-32-_3__5页_154kb

Colleges of Supervisors - 10 Common Principles Summary

Introduction

The Colleges of Supervisors are permanent and flexible structures designed to enhance cooperation and coordination among supervisory authorities responsible for cross-border groups, including large banking groups, insurance groups, and financial conglomerates. Established by the Committee of European Banking Supervisors (CEBS) and the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS), with the support of the Interim Working Committee on Financial Conglomerates (IWCFC), these Colleges aim to improve the supervision of cross-border financial entities. Following the ECOFIN roadmap (2007) and the Council Conclusions (2008), the EU supervisory committees have been tasked with developing common operational guidelines for Colleges of Supervisors and ensuring coherence in their practices, particularly during crisis situations.

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Core Content

The document outlines 10 common principles that guide the functioning of Colleges of Supervisors across the banking, insurance, and financial conglomerates sectors. These principles are based on existing work and recent experiences, especially in crisis management.

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Main Principles

1. Formation of Colleges

• A College of Supervisors is formed by the supervisors of Member States involved in the supervision of a cross-border group.
• Different types of Colleges may be established depending on the sector and the nature of the group, such as:
  • General Colleges for broad information sharing.
  • Core Colleges for restricted multilateral meetings.
  • Specialized teams in the insurance sector.
  • Coordination arrangements in the case of financial conglomerates.

2. Effective and Flexible Cooperation

• Colleges provide a permanent forum for cooperation and coordination.
• Supervisors are encouraged to avoid duplication and gaps by sharing tasks and information.
• Cooperation can extend to third-country supervisors, ministries of finance, and central banks.

3. Proportionality

• The structure and frequency of College meetings are proportional to the group's size, complexity, and risk profile.
• The Consolidating Supervisor, Group Supervisor, or Coordinator determines the organization and format of the College.

4. Assessment of Significance and Risk

• Supervisors must communicate their assessment of the significance and risks of their supervised entities.
• This helps in developing a common understanding of the group's structure and systemic relevance.

5. Agreements for Cooperation

• Agreements are essential for defining the cooperation framework and supervisory procedures.
• These agreements cover:
  • Roles and responsibilities
  • Information exchange
  • Task delegation
  • Communication with the group
  • Crisis management
  • Enforcement coordination
• These agreements are reviewed regularly to ensure effectiveness.

6. Leadership and Work Programme

• The Group Supervisor, Consolidating Supervisor, or Coordinator leads the College.
• They are responsible for:
  • Initiating the cooperation process
  • Chairing meetings
  • Designing the supervisory work programme
• The work programme includes:
  • Risk assessments
  • Joint on-site inspections
  • Information dissemination
  • Communication with the group

7. Information Sharing and Coordination

• Colleges ensure timely and confidential exchange of information between supervisors.
• Information sharing is crucial for:
  • Risk-based supervision
  • Coordinating supervisory reviews
  • Developing supervisory plans for risk mitigation

8. Harmonization and Coordination

• Colleges aim to harmonize supervisory approaches and coordinate input to major decisions.
• They support supervisory cooperation without having decision-making powers.
• The Level 3 Committees guide the functioning of Colleges.

9. Planning and Coordination of On-Site Inspections

• On-site inspections are a regular part of the College's agenda.
• Findings are shared with all relevant supervisors according to their needs and under confidentiality.
• Joint inspections are especially important for:
  • Internal model approvals
  • Risk management and internal governance assessments

10. Risk Evaluation and Early Warning

• Colleges are responsible for reviewing and evaluating risks faced by the group and its entities.
• Supervisors should assess:
  • Formal and operational structure
  • Business strategy and management
  • Internal systems and controls
  • Capital adequacy
  • Overall risk profile

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Future Work

• The CEBS, CEIOPS, and IWCFC are continuously improving the functioning of Colleges, drawing on lessons from the 2008 financial crisis.
• They are monitoring the effectiveness of existing structures and will review the 10 principles in light of new directives such as:
  • Capital Requirements Directive
  • Financial Conglomerates Directive
  • Solvency Directive for insurance
• Sectoral guidance has already been developed for the banking, insurance, and financial conglomerates sectors.
• Additional practical work is being tested to define areas of supervision within Colleges.
• The committees aim to develop common practices and improve supervisory outcomes through experience sharing and good practice identification.

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Conclusion

The Colleges of Supervisors are a critical mechanism for cross-border and cross-sector supervision of financial groups. By promoting cooperation, proportionality, information sharing, and risk-based supervision, they help ensure financial stability and supervisory convergence. The continuous improvement of these structures is essential to address evolving challenges in the financial sector.