CEBS is today publishing a report (CEBS 2009 47) mapping in detail supervisory objectives and powers across EU banking authorities, with special focus on early intervention measures and the actual use of sanctioning powers.
This work was undertaken in response to two requests from the European Commission in March 2008 as a follow-up to the conclusions of the December 2007 ECOFIN Council, and September 2008. The report provides input to the Commission’s work on designing possible policy options for Early Intervention Tools for dealing with ailing banks. It also identifies areas where CEBS might wish to prioritize for further convergence of supervisory practices while taking note of possible legal constraints.
Giovanni Carosio, Vice-Chair of CEBS, underlined:
"In general, if supervisors appear well equipped with enforcement powers in going concern situations, substantial differences crop up in the range of intervention measures available for ailing but solvent banks. This relates both to the measures available as well as the conditions under which these measures can be taken. In particular, powers towards the persons who effectively direct the business and towards shareholders appear rather fragmented. As for reorganization and winding-up procedures, the respective roles of supervisory and judicial authorities vary significantly although a majority of supervisors at least play a role in such procedures.
Such differences are likely to increase problems in coordination of supervisory action in cases of ailing cross-border banking groups.
The report also highlights considerable differences in the sanctioning powers of supervisory authorities and their related publication policies and practices, although it is difficult to infer conclusions on how this may affect the effectiveness of prudential supervision."