The European Banking Authority (EBA) publishes today its final Guidelines on the supervision of significant branches. Prompted by the increasing demand to establish branches across the European Union, these Guidelines are designed to facilitate cooperation and coordination between the Competent Authorities involved in the prudential supervision of significant branches of EU institutions established in another Member State. In particular, these Guidelines will facilitate cooperation and coordination of supervision of the largest and systemically important branches, the so-called ‘significant-plus' branches.

The final Guidelines provide a framework for the identification of ‘significant-plus' branches through a common assessment carried out by home and host Competent Authorities of the branches' relevance to the institution or the financial stability in the host Member State.  Furthermore, the final Guidelines outline a coordinated approach to their supervision and the assessment of recovery planning facilitated through the framework of colleges of supervisors. In particular, the final Guidelines propose a set of principles that Competent Authorities should comply with in the performance of risk assessments of the institution  having such ‘significant-plus' branches, such as exchange of supervisory intelligence and information, planning of supervisory activities, on-the-spot checks and inspections, application of supervisory and precautionary measures and allocation of tasks between authorities.

These final Guidelines do not interfere with the tasks and responsibilities conferred on the consolidating supervisor and the home and host Competent Authorities by the Capital Requirements Directive (CRD) and Bank Recovery and Resolution Directive (BRRD), and merely aim at establishing a framework for effective and efficient cooperation within colleges of supervisors when exercising those tasks and discharging those responsibilities. In addition, these Guidelines do not limit in any form the freedom of institutions to establish branches in other Member States, nor they create additional obligations to institutions in terms of Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP) or reporting.

Legal basis

The EBA has developed these Guidelines on its own initiative in accordance with Article 16 of Regulation (EU) No 1093/2010. The Guidelines elaborate on the existing legal frameworks established by the CRD, the BRRD and the EBA technical standards.

These Guidelines specify, how the consolidating  supervisor, the home and the host competent authorities should, within the framework of colleges of supervisors established either under Article 116 or under Article 51 (3) of the CRD , cooperate to prudentially supervise and coordinate the exercise of their powers referred to in Title V, Chapter 4 and Title VI, Chapters 1 and 3 of that Directive and in Title II, Section 2 of Directive 2014/59/EU in relation to branches of Union institutions established in another Member State.

These Guidelines apply only in relation to those significant branches referred to in Article 51 of the CRD whose intensification test performed in accordance with Section 4.2 of the draft Guidelines results in them being deemed ‘significant-plus' branches for the purpose of these Guidelines.