Institutional developments worldwide and in the EU with regard to financial stability презентация

Financial stability framework
Program overview
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Overview
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Strengthened macro-prudential perspective of global committees and standard setters
Establishment of the European Systemic Risk Board
The banking union in Europe
- Single Supervisory Mechanism
- Single Resolution Mechanism
The European Central Bank as a macro-prudential authority
Résumé

Global committees and standard setters
Strengthened macro-prudential perspective
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Global committees and standard setters
Strengthened macro-prudential perspective
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G 20
- International forum for cooperation on global economic and financial issues; established 1999
- Policy coordination, promoting financial regulations, modernizing international financial infrastructure
FSB
- Financial Stability Board; established 2009 as successor of FSF
- Coordinate work of national financial authorities and standard setting bodies, develop and promote implementation of effective regulatory and supervisory policies in interest of financial stability
Basel Committee
Forum for regular cooperation on banking supervisory issues, e.g. Basel II and III
Global regulation framework for more resilient banks and banking systems
International framework for measurement, standards and surveillance of liquidity risk
EU
Transposition into EU law via EU Directives and Regulations
- Implementation into national law
- Modification of regulations
Germany

Global committees and standard setters
Strengthened macro-prudential perspective
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Overview
26/04/2016
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Strengthened macro-prudential perspective of global committees and standard setters
Establishment of the European Systemic Risk Board
The banking union in Europe
- Single Supervisory Mechanism
- Single Resolution Mechanism
The European Central Bank as a macro-prudential authority
Résumé

Establishment of the European Systemic Risk Board (ESRB)
Lessons from the financial crisis
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Establishment of the European Systemic Risk Board
Organisation
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European Systemic Risk Board
Tasks
Responsible for macro-prudential oversight of the financial system within the EU in order to contribute to the prevention or mitigation of systemic risks to financial stability in the EU that arise from developments within the financial system and taking into account macro-economic developments
Establishes link between micro-prudential supervision and macro economy
Brings the systemic component into financial supervision
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European Systemic Risk Board
Tasks
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(1) Input gathering and analysis
(2) Assessment
(3) Policy response
Identification,
assessment and
prioritisation of
risks
Warnings and recommendations
Collection and analysis of information
ESRB member organisations

Overview
26/04/2016
Slide
Strengthened macro-prudential perspective of global committees and standard setters
Establishment of the European Systemic Risk Board
The banking union in Europe
- Single Supervisory Mechanism
- Single Resolution Mechanism
The European Central Bank as a macro-prudential authority
Résumé

The banking union in Europe
Concept
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Conceptual background of the banking union
Lessons from the financial crisis
Lessons from the financial crisis kick-started work on the European banking union
Supervisory structures previously in place were no longer adequate to deal with highly interconnected European financial markets
Banking supervision primarily carried out at national levels makes it difficult to identify all risks of cross-border banking groups
One of the overarching goals is to loosen the close ties between bank and sovereign risks
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Conceptual background of the banking union
Contagion channel between sovereigns and banks
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Source: ESRB (2015)

Conceptual background of the banking union
Milestones of the European banking union
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New institutional framework for micro and macro-prudential supervision in EU Institutional perspective
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New institutional framework for micro and macro-prudential supervision in EU
Policy perspective
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Source: Deutsche Bundesbank (2014)

New institutional framework for micro and macro-prudential supervision in EU
Country perspective
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Source: ECB (2016)

Single Supervisory Mechanism in Europe
Legal and operational framework
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Single supervisory mechanism in Europe
Division of tasks between national and European level
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Methodology for classifying supervised entities
What makes a bank significant?
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Distribution of tasks within the SSM
Overview
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Source: ECB (2014)

Single supervisory mechanism (SSM)
Functioning of the Joint Supervisory Teams
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Source: ECB (2015)

Single supervisory mechanism (SSM)
Significant supervised entities in Germany
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Single supervisory mechanism (SSM)
Framework for supervision of less significant institutions (LSI)
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Source: ECB (2015)

Supervision of LSIs
Priorisation of LSIs
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Supervision of LSIs
Requirements for reporting to the ECB
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Single supervisory mechanism (SSM)
Supervisory priorities 2016
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Source: ECB (2016)

Overview
26/04/2016
Slide
Strengthened macro-prudential perspective of global committees and standard setters
Establishment of the European Systemic Risk Board
The banking union in Europe
- Single Supervisory Mechanism
- Single Resolution Mechanism
The European Central Bank as a macro-prudential authority
Résumé

European Central Bank as a macro-prudential authority
Macroprudential policy and oversight in Europe: EU, ECB and ESRB
General responsibility for EU-wide policy measures lies with European Commission
General responsibility for country-specific policy measures lies with national authorities
ECB can tighten macroprudential requirements
- Notification of Member State 10 working days prior to decision
- Member state has 5 working days to object
ESRB: macroprudential surveillance on EU level
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European Central Bank as a macro-prudential authority
Macroprudential policy in Europe: the role of the ECB
European Central Bank (ECB)
Additional tasks within its new responsibility for banking supervision in Europe
Macroprudential tasks according to Article 5 SSM regulation
- Regional responsibility: euro area and opt-in countries
- Sectoral responsibilities: banks
Intensification of national macroprudential measures
- Direct approach
- Counteracting 'inaction bias'
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European Central Bank as a macro-prudential authority
Macroprudential oversight in Europe: the role of the ESRB
European Systemic Risk Board (ESRB)
Central EU body for macroprudential oversight and policy
- Regional competence: 29 EU Member States
- Sectoral competence: all financial intermediaries
Objectives and tasks
- Identification, surveillance and limitation of systemic risk
- Instrument: warnings and recommendations
--> comply or explain, indirect approach
Addressees: EU institutions or EU member states
Comply or explain: Addressee of a recommendation is obliged to inform within a limited time period how he wants to implement the recommendation or why he does not intend to implement it
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Overview
26/04/2016
Slide
Strengthened macro-prudential perspective of global committees and standard setters
Establishment of the European Systemic Risk Board
The banking union in Europe
- Single Supervisory Mechanism
- Single Resolution Mechanism
The European Central Bank as a macro-prudential authority
Résumé

Résumé
Institutional set-up financial stability – European perspective
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Source: German Council of Economic Experts (2015)

References
Council Regulation (EU) No 1024/2013 of 15 October 2013, L287/63
Deutsche Bundesbank, Monthly Report, various issues
European Banking Authority, Annual Report, various issues
European Central Bank, Annual Report on Supervisory Activities, March 2015
European Central Bank, Banking Supervision, SSM Priorities 2016, 2016
European Central Bank, Guide to Banking Supervision, November 2014
European Systemic Risk Board, ESRB report on the regulatory treatment of sovereign exposures, March 2015
German Council of Economic Experts, Annual Report, various issues
Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014, L 141/1
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