The world of banking supervision finds itself in constant transition. 2018 is an especially eventful year for financial institutions and the authorities as lots of regulations are updated and renewed. MiFID has already come into effect, Basel IV is one of the top topics in many discussions and other updates will bring significant changes for the regulatory law sector. In the course of the past decade many regulations have stood the test of time, others have proven themselves in need of revision.
Last Friday the EBA released the results of the 2018 EU-wide stress test for banks. The test simulates a crisis or worst case scenario for financial institutions and tests their potential performance. 48 banks from 15 countries were put to the test this year. Have a look at the results here.
Author: Prof. Dr Christian Schmaltz
After years of Pillar 1 attention (Basel III, TRIM), the ECB has shifted its supervisory focus to Pillar 2. In that course, it has published its supervisory expectations on how banks internally deal with their solvency risks (called ICAAP) and with their liquidity and funding risks (ILAAP).
At last year’s Handelsblatt Conference “European Banking Regulation” (22-24 November 2017 in Frankfurt Germany), Adam Farkas (Executive Director, European Banking Authority – EBA) spoke about the outlook on the Stress Test 2018.
Summary of a discussion with Burkhard Eckes (Head of Banking & Capital Markets, PwC), Dominique Laboureix (Member of the Board, Single Resolution Board) and Sylvie Matherat (Member of the Board, Deutsche Bank AG) at the 18th Handelsblatt Conference “European Banking Regulation” (22-24 November 2017 in Frankfurt, Germany). Host of the discussion was Daniel Schäfer (Head of Handelsblatt’s finance pages).
Banks must be adaptable and act sustainably
On the occasion of the third anniversary of the European Banking Authority in November 2017, Danièle Nouy (Chair of the SSM Supervisory Board, ECB Banking Supervision) presented an outline of the successes and the progress of the European Banking Authority over the past three years.
Continuing international cooperation and consistent regulation
At last year’s Handesblatt European Banking Regulation Conference (22-24 November 2017) Sylvie Matherat gave a speech on the difficulties banks face in uncertain times. She mentioned aspects that would be helpful on the part of the regulatory authorities to improve banks’ ability to act in uncertain conditions. Also, she explained which factors carried the greatest amount of uncertainty for Deutsche Bank. According to Sylvie Matherat, in uncertain times, regulatory authorities can focus on three paths of action.
Jens Schäfer is Oberregierungsrat at the German Federal Financial
Supervisory Authority (BaFin) and keynote speaker at this year’s Handelsblatt Conference “EBR – European Banking Regulation” in Frankfurt.
From (probably) 2021 onwards (with regulatory reporting based on CRR II) banks must measure and manage Pillar 1 market risk within a fundamentally revised framework. Banks are exempted from the new framework if their regulatory trading book plus FX- and commodity positions in the banking book do not exceed 10% of total assets and do not exceed 300 mio EUR.
European banking supervision contributes to safe and sound banks…
The goal of European banking supervision is to contribute to the safety and soundness of banks. And we have made great strides towards achieving that goal.