UniCredit

UniCredit suggests that the supervised group, via the parent company, should have a key role in the working of the College of Supervisors, in order to improve the communications between the Authorities and banks. That would allow, inter alia to properly disseminate information and to have a more balanced exchange of views with a focus on the interest of the Group as a whole.

UniCredit deems of the utmost relevance to engage the supervised group via the parent company - besides attending some sessions as per RTS art. 5 (3) – also at the beginning of the process in drafting the agenda of the meeting and therefore suggests to modify ITS art. 4 (2) accordingly. This would allow the bank to clearly present its strategy, the evolution of the business model as well as its key figures, in order to enable supervisors to perform properly their task, for instance the SREP. On the other hand, the bank could enrich the supervisors’ view with an industry perspective on the key topics, for instance in relation to market environment or to the unintended consequences of supervisory decisions. Furthermore, the parent company could also outline what most relevant open issues are with reference to bank supervision.

Therefore, UniCredit would recommend to share the list of potential members of College with the parent bank in order to provide useful insights on the significance and relevance of the countries where it operates; this could prove to be a useful information in relation to the process of appointing the members of the College. Therefore UniCredit suggests to modify ITS art. 1 (2) accordingly.

In this regards, the most relevant point is to have a well-defined framework to disseminate the information discussed within the college and the related of outcome . In this respect, art. 7 (1) could be revised, for instance by requiring the consolidating supervisors to provide a formal feedback to the parent company. In this regard, when specific relevant issues arise, it could be appropriate for the consolidated supervisor to meet the Board of directors of the parent company.

To ensure a smooth functioning of the College, UniCredit suggests that the consolidated supervisor should liaise with the parent company, which would be tasked with the role to engage as appropriate the relevant Legal Entities. In certain circumstances, such as for instance in case of emergency situations, we deem appropriate that the responsibility is allocated to the consolidated supervisor and that the communication is channelled from the consolidated supervisor to the parent company. We suggest modifying RTS art. 23, for instance by adding a dedicated subsection (3), to account for such a possibility.
In the assessment performed by the College, UniCredit would suggest to include also the review of IT systems, since IT are a key factor for an effective management and control of a bank. Furthermore, the IT Systems should be reviewed by the College, since IT could be relevant at group level and therefore should not fall under the competence of a single authority. This is a clear example where a delegation of a significant task to the College could lead to a more effective decisions, thus avoiding (1) duplication of reviews by various supervisors; and (2) benefitting the bank, which would avoid an unreasonable and excessive burden (in terms of costs and time) of tasks. In this regard RTS art. 9 (2) should be integrated by adding Group relevant IT systems as topic viii.
Based on its experience, UniCredit deems the effective cooperation amongst supervisory authorities, above all between consolidating and host ones, as a key factor for a successful work of the College. Even if this mainly relies on the authorities willingness to cooperate, it could be further fostered by an appropriate drafting of the RTS and ITS under consultation.

In this regard UniCredit would suggest to better define the scope of Colleges and above all making the decision making process more effective, with a special focus on emergency situations, as suggested below:

1) better defining the scope of Colleges:
 model validation is one of the main areas of cooperation for supervisors, hence it should be clearly mentioned in the college working. Therefore we suggest integrating RTS art. 4 (1) (f) and art. 16 (2) to explicitly include the focus on model validation among the areas of supervisors’ cooperation;
 getting more explicit split of roles in Recovery and Resolution planning, i.e. review the recovery plan submitted by the bank We suggest integrating accordingly RTS art. 4 (1) (h);
 the exchange of qualitative and quantitative information should regard all risk types, also to be consistent with the provisions of art. 9 (2). The list should also include pending supervisory procedures and debates, given their significant role;
 for sake of clarity, it could be more appropriate to share the mapping with all the authorities related to the banking group and not only with the potential members, therefore aligning ITS art. 1 (2) accordingly;

2) effective decision making process:
 on revocation of permission to use internal models, it should be specified that in case of disagreement between the consolidating supervisor and the host authorities, the consolidating supervisor makes the final decision after having adequately taken into account the views and assessments of the members of the college responsible for the supervision of the involved entities. We would therefore suggest modifying RTS art. 11 (2) and ITS art. 6 (2) as well as ITS art. 7 (3) to adopt an approach as the one outlined in ITS Art. 4. 2. (“The consolidating supervisor shall take into account proposals on model validation made by the other members of the college and shall explain, if necessary, the reason for not taking them on board”);
 the communication to the group should be coordinated by the consolidating supervisor. This would mean that the communication from the host authorities to the legal entities member of the Group should be previously coordinated with the consolidated supervisor, modifying RTS art. 7 (1), for instance sharing a communication programme in the College;
 to avoid communications gaps between the consolidated supervisor and the host authorities, RTS art. 13 (1) could be integrated by a provision where the consolidated supervisor has to define the cases to be reported;
 in order to get the College more efficient in dealing with all the supervisory authorities, the consolidating supervisor could be tasked with the role to manage the communication also to those that are not members. This could be achieved for instance via a report to be circulated as appropriate to the legal entities. Therefore we suggest to modify ITS art. 1. Such initiatives would ensuring a smooth communication between authorities part of the College;

3) In case of an emergency, the effectiveness is also based on time efficiency, that should be ensured by the provisions of the RTS and ITS above all regarding decision making and communications.
UniCredit