Guidelines for cooperation between consolidating supervisors and host supervisors

The Committee of European Banking Supervisors (CEBS) today published final guidelines on cooperation between supervisors of EU banking groups and investment firms. The guidelines are designed to promote an efficient supervisory framework for groups that operate in several EU jurisdictions, by enhancing the practical operational networking of national supervisors.

Market developments - such as the trend towards centralisation of risk management and other functions within financial groups, the integration of EU financial markets, and the increasing importance of certain subsidiaries and branches - call for a more integrated, coordinated, and risk-based approach to prudential supervision. The guidelines published today use new operational mechanisms, along with well-established methods of cooperation, to promote efficient and cost-effective supervision and enhanced convergence in supervisory practices.

The guidelines were developed after extensive dialogue with market participants, including a formal public consultation which ended on 8 November 2005 and a public hearing with market participants on 5 October 2005. CEBS received twelve responses from industry associations and international banking groups. The responses were generally positive and supportive of CEBS' work. Some respondents would like to see the role of the consolidating supervisor further enhanced, but this was not possible under the legal framework created by the new Capital Requirements Directive. However, CEBS is fully committed to work towards convergence and enhanced cooperation to achieve effective and an efficient supervisory framework within the EU.