28 April 2014
The EBA published today its 2014 action plan for colleges of supervisors of European Economic Area (EEA) banks. The plan identifies key activities, necessary in 2014 for the effective oversight of Europe's cross border banking groups, and is issued alongside a report providing an assessment on the colleges functioning during 2013.
National competent authorities and EBA made significant efforts in 2013 to improve the efficiency of supervisory cooperation in overseeing cross border banking groups via supervisory colleges. Colleges of supervisors play a crucial role in the effective supervision of cross-border groups across the EU by acting as the coordination hub for supervisory activities and the forum for joint risk assessments and joint decisions regarding banks pillar 2 capital requirements.
The 2014 action plan draws on lessons from recent experience and takes into account the latest regulatory and institutional developments that will impact the functioning of colleges in 2014.
The completion in 2014 of a common methodology for the supervisory review and evaluation process (SREP) in pillar 2 will allow for more consistency in the outcome of capital joint decisions by colleges of supervisors.
In 2014 colleges of supervisors will need to reach for the first time a joint decision on liquidity, under CRD IV (Capital Requirements Directive 2013/36/EU). The process of reaching joint decisions on liquidity will be supported by technical standards, and common templates issued by the EBA as well as a common methodology for the assessment of liquidity under SREP.
Colleges of supervisors will also play an important role in ensuring effective communication and coordination between national supervisors of cross-border banking groups during the 2014 AQRs and EU-wide stress test exercise.
As part of its mandate to improve supervisory cooperation and convergence of supervisory practices, the EBA produces regular internal reviews on college functioning which are discussed with all 28 competent authorities (CAs) in the EU to identify best practices, areas for improvements and priority tasks going forward. EBA is publishing this report in the interests of transparency and better informing the public about the important role of colleges in cross-border supervision. The report on colleges functioning and the 2014 action plan issued today were endorsed by the EBA Board of Supervisors.
Enhanced cooperation between supervisory authorities is key to strengthening the supervision of cross-border banking groups, both at EU and global level. Colleges of supervisors are the vehicles for the coordination of supervisory activities in the banking sector across the EU. Under EU law (Art. 51 and 116 CRD (Capital Requirements Directive 2013/36/EU)) they have to be established for EEA banks with subsidiaries or significant branches in other EEA countries.