The project of a Banking Union - Warsaw School of … · The project of a Banking Union . 10178 Berlin, Hackescher Markt 4 Tel. 030-843 14 136 ... [email protected]
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I. European Banking Union: What is the situation? II. Steps to the institutional implementation of the Banking Union III. Legal problems and critical issues in terms of institutional economics
• - Regulation No. 575/2013 as of June 26th 2013 • - Directive 2013/36/EU as of June 26th 2013 -> Applicable from January 1st 2014 • -> material banking supervision regulation • -> is accomplished by various regulatory acts of legal
• Proposal of the EU Commission of September 12th 2013
• October 15th 2013: adoption of 2 regulatory acts by the
ECOFIN-Council 1. so-called SSM-Regulation 2. Regulation to amend the EBA-Regulation (EU) 1093/2010 • Publication in the Official Journal has been made on
The resolution and liquidation of banks (Single Resolution Mechanism) 1. Proposal by the EU Commission as of June 6th 2012 for a Directive
regulating the recovery and resolution framework for credit institutions and investment firms(so-called BRRD);
2. Proposal by the EU Commission as of July 10th 2013 for a
regulation of the EP and of the Council establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Bank Resolution Fund (so-called SRM-Regulation).
June 27th 2013 ECOFIN-Council reached agreement on a common content Since then Trilog-Negotiations between the Council and EP with the involvement of the Commission
• Time limit: closing of Trilog-negotiations in march 2014 to allow for its adoption before the end of the current legislative period (EP-elections in may 2014)
Good morning The purpose of this presentation today is to talk about banking supervision at the ECB and to set the pace for all internal preparatory work for setting up the new function.
1. Timeline of the SSM Regulation
10
Nov 4 2014 (1 year after entry into force of the Regulation)
Legislative phase – SSM Proposal, ECOFIN
Trilogue phase with the European Parliament
Finalisation of SSM (and EBA) Regulation(s) legislative process
Implementation phase
Effective start of ECB supervision
Jun 2012
Sep 2012
Dec 2012
Apr 2013
12 Sep
Van Rompuy Report
Commission proposal
ECOFIN
Adoption in EP plenary
Pre-legislative policy phase
15 Oct Adoption in EU Council 3 Nov Likely entry into force
Publication in the Official Journal of the EU Regulation enters into force on 5th day following publication ECB decisions on SSM (organisation, staffing, recruitment) after entry into force of SSM Regulation (preparation started) ECB to assume supervisory tasks 12 months after entry into force of legislation
2. The Inter-Institutional Agreement IIA
Transparency and accountability: The IIA between the EP and the ECB The Agreement is basically finalised as acknowledged by the declaration of the two Presidents, Mr Schulz and Mr Draghi, but formally subject to the approval by the EP plenary (7-10 October) and the Governing Council. It details the provisions for the transparency and accountability of the ECB as supervisor toward the EP: • EP can veto the ECB’s choice of the Chair and Vice Chair of the Supervisory
Board, • the Chair of the supervisory Board will be heard in front of the EP at least
twice a year, • hold confidential oral discussions with MEPs of the ECON Committee, the
ECB must provide “comprehensive and meaningful records of the proceedings” of the Supervisory Board.
• at the same time, appropriate provisions ensure the safeguarding of confidential information.
1 Director General 2 Deputy Dir. Generals 7 Divisions
1 Director General 2 Deputy Dir. Generals 8 Divisions
1 Director General 2 Deputy Dir. Generals 10 Divisions
1 Director General 3 Divisions
15
Defining BSA objectives Restoring confidence
in euro area banks
• Meets the expectations of markets as the analyst reports indicate expectations of a thorough recapitalisation
• Ensure credibility and comparability between different jurisdictions and banks
• Confidence-building at the start of SSM supervision
• Fact-finding and build-up of SSM expertise and collaboration
• Strengthen health of EU banks
Increasing transparency
• To be achieved through a comprehensive assessment, incl. BSA • Possible follow-up actions include recapitalisation against a to-be-determined threshold
As it has possible fiscal impact, backstop commitments are required upfront
III. Critical comments on legal problems and pitfalls in terms of Institutional Economics 1. Institutional Economics 2. Legal problems 3. Unadressed issues 4. Conclusions
FAKULTÄT VIII WIRTSCHAFT UND MANAGEMENT INSTITUT FÜR VOLKSWIRTSCHAFTSLEHRE UND WIRTSCHAFTSRECHT Prof. Dr. iur. Markus C. Kerber
1. Institutional Economics
- Should a supranational central bank have the function of banking supervision?
- Collateral policy is always a source of risk. Liquidity policy in the framework of monetary policy could encourage as well a risk-taking attitude by banks.
- Will there be no longer “national bias”? French lobbying for special positions shows that centralization of banking supervision does not do away with national bias. On the contrary!
- SSM and SRM are not the same entity: Instead of passing the case from supervision immediately to resolution, it will take ages to liquidate a bank which, as a result of the supervision process, is deemed to be unable to survive.
- SRM and its funding method create an incentive for the less contributing countries and banks to use funds for the sake of those banks which are in particular at risk.
- Special problem: The contribution to the Single Resolution Fund by German mutual and saving bank will be multiplied, whereas this banking sector has never used rescue funds before.
3. Unadressed Issues - The comprehensive risk assessment by ECB concerning
122 banks of significant size is a test for the “no national bias thesis”.
- Till the build-up of a 55 billion resolution fund, the Banking Union will need a backstop solution. The ESM would be well fitted, but would then – economically speaking – have access to Central Bank money
- A single rulebook without the UK and Sweden will invite to regulation arbitrage.
- The collusive relation between banks and states will not be abandoned but will through ESM be reinforced.