15 December 2015
The European Banking Authority (EBA) published today a Report and an Opinion on the application of legal provisions on cooperation and information sharing between EU and non-EU supervisory authorities. The objective of this report is to identify any issues and areas of improvement and to propose legislative changes, where needed, to better facilitate prudential supervision of institutions on a cross-border basis.
In its Report, the EBA concludes that although cooperation with third country supervisory authorities does not pose any major concerns, more clarity is needed especially in the equivalence assessment processes of third country supervisory and regulatory regimes, confidentiality provisions, and consolidated supervision.
In its Opinion addressed to the European Commission, the EBA believes that a clear legal mandate on equivalence assessments in the Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR) will clarify its role and will enable coordinated, consistent and continued equivalence assessments, as well as seek to ensure that the EBA has sufficient resources on an ongoing basis to fulfill these tasks. Additionally, the EBA proposes to align the CRD with the Bank Recovery and Resolution Directive (BRRD) text to explicitly provide reference to the status of ‘observers' for third country supervisory authorities when they participate in colleges.
The Opinion has been issued according to Article 161 (7) of Directive 2013/36/EU (CRD IV) that requires the EBA to review and submit a report to the European Commission on the application of the CRD and CRR in the cooperation of the Union and Member States with third countries.
Cross-border banking, both within the EU and beyond, is fundamental to banks' business models and requires good information exchange and cooperation between Member States and third countries to ensure effective supervision and the stability of the EU as a whole. To safeguard the Single Market, it is also important that any deficiencies in the regulatory framework regarding cooperation with third countries are addressed so that consistency of treatment can be facilitated, avoiding regulatory arbitrage.