27 December 2007
After the publication in January 2006 of the "Guidelines for cooperation between consolidating supervisor and host supervisors" CEBS has been working to develop smooth home-host cooperation and discuss practical issues emerging from the application of the Capital Requirements Directive (CRD) and the related CEBS Guidelines, with a view to identifying common ways forward. The operational networks project, launched in mid-2006, represents the farthest reaching cooperation exercise between European supervisors. The project created an infrastructure to support enhanced exchanges of information and experiences between consolidating and host supervisors for a sample of ten EU banking groups with substantial cross-border business. It established a stable connection between the colleges of supervisors, thus providing a setting for identifying concrete issues in a more coordinated fashion throughout the EU. The ten banks in the sample also established an industry platform which engaged in a fruitful dialogue with supervisory experts.
The two documents published today are the first publicly disclosed results of the project. They are primarily addressed to banking supervisory authorities, but credit institutions will benefit from enhanced supervisory cooperation. The first document identifies a range of practices from existing supervisory colleges and provides a point of reference for the working of those supervisory colleges that are still in a development stage. On this basis, CEBS developed the Template for the written agreements that need to be drafted and signed according to Art. 131 of the CRD. The Template for written agreements is a common operational document, which aims at fostering consistency across EU banking groups, while keeping enough flexibility to be adapted to the specific organization, circumstances of each college and banking group, and legal frameworks of participating authorities.
CEBS believes that these documents will enhance the efficiency and effectiveness of the European supervisory regime under the CRD. In particular, the operational focus of the Template for written agreements is expected to narrow the gap between the high level principles issued by CEBS on supervisory cooperation and day-to-day supervisory practices.
The Template for written agreements will be tested with the banking groups included in the sample by mid-2008, and will be subject to review in the light of experience with its application, of the work undertaken as a result of the Ecofin Council?s recommendations of 4 December 2007 as well as of possible amendments to EU banking legislation regarding colleges of supervisors.
In addition to the work performed on the functioning of colleges of supervisors, the operational networks project has analyzed several Basel II implementation issues. The outcome of this analysis will be published on the CEBS website in the coming weeks. With the publication of these three documents the test phase for the project on operational networks will be concluded. CEBS has decided to continue the project and expand it to cover a wider set of cross-border groups operating in the EU and the whole range of supervisory issues, beyond the application of the CRD.