The Committee of European Banking Supervisors (CEBS) today starts a public consultation on its Guidelines on operational risk mitigation techniques.
The consultation is open to all interested parties, including supervised institutions and other market participants.
The intent of the paper is to move forward with respect to the GL10 paper of April 2006, which provided only limited guidance on insurance contracts and Other Risk Transfer Mechanisms (ORTM) for transferring operational risk.
The main objective of the paper is to provide appropriate guidelines on the recognition of insurance within the AMA capital calculation. In particular, the topics addressed cover the issues of eligibility of protection providers, characteristics of eligible products and haircuts for uncertainty of coverage.
As to the ORTM, a first set of guidelines are elaborated that require, for the use of these products within the AMA, a sort of experience requirement and the requisite to not held or use them for trading purposes. In addition the document anticipates the more conservative requirement of the CRD which is currently being considered under the Comitology procedure, namely that both insurance contracts and ORTM together should not exceed the 20% limit for capital alleviation.
CEBS presents its Guidelines on operational risk mitigation techniques for a public consultation which starts today and runs until 7 July 2009. Comments received will be published on CEBS’ website unless respondents explicitly request otherwise. Please send your comments to the following e-mail address: cp25@c-ebs.org.
A public hearing will take place in the beginning of July 2009 (the exact date will be announced later) at CEBS’s premises in order to allow all interested parties to present their comments to CEBS.
The European Banking Authority was established by Regulation (EC) No. 1093/2010 of the European Parliament and of the Council of 24 November 2010. The EBA has officially come into being as of 1 January 2011 and has taken over all existing and ongoing tasks and responsibilities from the Committee of European Banking Supervisors (CEBS). The EBA acts as a hub and spoke network of EU and national bodies safeguarding public values such as the stability of the financial system, the transparency of markets and financial products and the protection of depositors and investors.