In accordance with the Regulation establishing the European Banking Authority (EBA), the annual work programme describes and summarises the main objectives and deliverables of the EBA in the forthcoming year derived from the tasks specified in the Regulation and from the relevant EU banking sector legislation.
The year of 2012 will be the second year of operation for the EBA as a fully-fledged EU Authority in the new European System of Financial Supervision (ESFS). Therefore, a strong emphasis still needs to be laid on the overall development and strengthening of the EBA’s institutional capabilities. In addition, there are significant new legislative proposals in European banking regulation which will have a major impact on the amount and priorities of specific tasks the EBA will be carrying out in 2012 and thereafter. Continued tensions in financial markets, and their adverse effects on the European banking system, also create an additional burden on the EBA as they accelerate the build-up of an appropriate risk assessment framework and increase the profile of the EBA in coordinating EU-wide supervisory action.
The work programme identifies four areas of EBA’s activities and aims to define the main objectives and corresponding priorities for 2012. The first three areas, Regulation, Oversight, and Consumer Protection are representing the core functions of the EBA that are laid down by the EBA regulation. The support functions summarised as Operations are playing a critical role in ensuring that the EBA can perform its core functions, and thus, their main working objectives are also summarised.
The main objective of the EBA in the regulatory policy area is to play a leading role in the creation of the single rule book for the EU banking system. Based upon the current CRD IV/CRR proposals, to be adopted in the course of 2012, about 200 deliverables will be expected from the EBA. Most products are expected to be finalised by 2013-2014, thus, the concentration of EBA’s regulatory work will be very high in the course of 2012. Based upon the capacity available at both the EBA and at the national authorities, the following policy areas have been identified as priority: capital and capital buffers, liquidity, remuneration, leverage ratio. In the context of crisis prevention and crisis resolution, the EBA is expected to set further technical standards but also to coordinate and, where applicable, to actively participate in the management of cross border crisis events. The legislative proposals from the EU Commission are expected soon, with high priority tasks to be undertaken by the EBA.
The main two objectives of the EBA’s regulatory oversight activities in 2012 are:
(i) to deliver independent and high quality analysis of EU banks and the EU banking sector. In the area of risk assessment, in addition to the regular work on monitoring and assessing risks and vulnerabilities from a micro-prudential perspective, the EBA will follow up its Recommendations post 2011 EU-wide stress tests and on banks’ recapitalisation.
(ii) to promote supervisory convergence and assist National Supervisory Authorities to ensure that colleges are run consistently and efficiently with substantive discussions leading to material decisions being taken which strengthen the resilience of EU cross border banks and prepare them better for crises. Higher quality, more detailed feedback and advice on the functioning of colleges will be focused on the priority 44 banking groups.
The EBA has an EU-wide responsibility for promoting transparency, simplicity and fairness in the market for consumer financial products. The main tasks of the EBA’s Consumer Protection work will be the collection, analysis and reporting on consumer trends; the review and coordination process of financial literacy and education initiatives by the competent authorities; the development of training standards and common disclosure rules for the industry; monitoring new and existing financial activities and where appropriate prepare guidelines and recommendations with a view to promoting the safety and soundness of markets and convergence of regulatory practice.
The overall objective of the institutional development of the EBA in 2012 will be the completion and further enhancement of the internal control environment in a period of intensive build-up and growth of the recently established EU institution.
A detailed list of EBA’s tasks is presented in the Annex with attached priorities.