Vienna 2 proposes enhancements in cross-border supervision to European authorities
IMF Press Release No. 12/399
October 26, 2012
http://www.imf.org/external/np/sec/pr/2012/pr12399.htm
Excerpts:
The Steering Committee of the Vienna Initiative 2 has submitted observations and proposals on cross-border supervisory practices to a number of European authorities. 1 These focus on critical aspects of home-host cooperation, which are of particular importance for host countries in Central, Eastern, and Southeastern Europe where locally systemic affiliates of foreign banks operate.
The aim is to provide input for the designing of the supervisory framework for Europe and to communicate systemic concerns of host countries. The proposals have been shared with the EBA, the ECB and the European Commission.
The document
reflects the Steering Committee’s views on implementation of
cooperation between national authorities in home and host countries
during the crisis. It draws on discussions between home and host country
supervisors, central banks, fiscal authorities and key parent banks,
including at a workshop hosted by the EBRD in London on September 12,
2012. Frequent contacts with other national authorities and with the
private banking sector have added further insights.2
Some issues in supervisory practices are particularly relevant to
European countries in Central, Eastern, and Southeastern Europe which
mainly host affiliates of the cross border banking groups from the EU
that are systematically important for their financial sectors. The last
years have shown that the viewpoint of home and host authorities can
differ when assessing systemic risk of financial institutions, not least
because subsidiaries may account only for a minor part of a banking
group yet be systemic in host countries. These concerns can be even more
pronounced in countries outside the EU where EU-based banks have
systemic operations.
The proposals focus on:
1. Addressing potential conflicts of interest to ensure that supervisory colleges take a wider European perspective.
2. Ensuring that the EBA guidelines are observed and implemented in practice.
3. Fostering more open and active discussions in supervisory colleges.
4. Strengthening the position of the EBA as an “honest broker” in
mediation and involving fiscal authorities when fiscal issues are
relevant.
5. Bringing the relevant non-EU countries into the supervisory ccooperation framework.
6. Highlighting the need to ensure appropriate conditions for the
non-Euro zone countries toparticipate in the banking union ("opting
in").
7. Bringing the macro-prudential perspective into the discussion of cross border supervision, including in supervisory colleges.
The Vienna 2 is also preparing detailed comments on the new bank
resolution proposal for submission to the relevant European authorities.
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1
The EBRD, EIB, IMF, World Bank, and European Commission are members of
the Steering Committee as well as Italy and Romania, which represent
home and host authorities respectively. The Committee is chaired by
Marek Belka, President of the National Bank of Poland.
2 The European Commission may have different views on the issues addressed in this document.