The Committee of European Banking Supervisors (CEBS) today publishes its liquidity identity card (hereafter “liquidity ID”) aiming at providing supervisors of European cross-border banking groups with a single prudential language to enable meaningful exchange of information, in particular within colleges of supervisors.
Although designed as a supervisory tool, CEBS’s liquidity ID could indirectly affect credit institutions if the information requested goes beyond the national regulatory reporting requirements.
Kerstin af Jochnick, CEBS’s Chair, noted: “In line with CEBS’s pragmatic approach to supervision, the liquidity ID that can be used as of today should help supervisors to reach a common understanding of a group’s liquidity risk in both the short and long term, which the crisis clearly highlighted as a point to be strengthened. The ID should kick-start the coordination of liquidity supervision at group level.”
The liquidity ID defines a core of essential qualitative and quantitative information for authorities involved in the supervision of cross-border banking groups. In addition, non-exhaustive “à la carte” information could be used to enable each college of supervisors to select other proposed metrics if they decide to complement the core set of information.
Depending on the level of centralisation of liquidity risk management at cross-border banking groups, some information may be available only to consolidating supervisors. Thus, two ID templates have been prepared: one for consolidating supervisors and one for host supervisors.
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.