05 February 2009
The Committee of European Banking Supervisors today publishes its analysis of the supervisory implications of the national plans for the stabilization of markets that have been announced by the European Members States until the end of December 2008.
The report focuses on three main areas: (i) an overview of the national plans, including the tools, conditions and supervisory involvement, (ii) an assessment of general measures for the stabilization of the markets, and (iii) potential areas for further work by CEBS.
CEBS work in 2009 will focus on enhancing supervisory practices for the cross border banks. In combination with the ongoing regulatory review, this will improve the framework for financial supervision.
CEBS Members will coordinate in key areas such as the quality of capital and the definition of adequate capital buffers to withstand shocks.
As to the quality of capital and in the context of the revision of the Capital Requirement Directive, CEBS will issue further guidance on the definition of hybrid instruments and intends to issue guidance on the definition of core tier 1, so that it incorporates only instruments that have the highest quality in terms of loss absorbency and flexibility of payments.
As to the quantity of capital, internationally agreed minimum capital requirements should remain the main reference point for supervisors. However, CEBS intends to provide input to the current discussion on pro-cyclicality by developing views on how banks can use capital buffers during periods of stress.