Supervisione bancaria: il punto dopo la crisi finanziaria del 2008-2009

BANKING SUPERVISION: THE POINT AFTER THE 2008-2009 FINANCIAL CRISIS

HA COMPROMESSO The financial crisis has strained the tension between freedom in the market and the regulatory and supervisory power of the system. Reform of the organisational arrangements, which, at the EU level, are responsible for monitoring financial stability by overcoming localism and fragmentation of national supervisory systems, was necessary (as well as related financial market protection measures).

IN PARTICULAR:

The "multilateral surveillance was insufficient; the structures for preventing, managing and resolving crises appeared inadequate" "Micro prudential supervision of individual financial institutions and insufficient attention to systemic macro risks of contagious, related and horizontal shocks"

BEFORE THE CRISIS

The lack of a supervisory apparatus at the European level has been exacerbated by Member States' adoption of highly fragmented and ultimately inefficient national surveillance systems.

FOR EXAMPLE

Countries such as Austria, Belgium, Denmark, Finland, Germany, the UK and Sweden opted for integration, in which a single authority supervises all financial activities across the board.

THE ITALIAN SUPERVISORY MODEL

TRIPARTITION BANKING SECURITIES INSURANCE

IN 2009, EUROPE HAD:

52 state financial supervisory authorities, (almost two for each member) ... They contributed to the phenomenon of fragmentation in the exercise of the supervisory function, which also characterises the USA, where the authorities were 115, equal to 2.3 per state. 7

THE TURNING POINT

The financial crisis highlighted all the weaknesses of the system and also the need for a reform which should aim to:

1. Avoid the creation of distorted incentives in financial markets;
2. Provide for regulation extended to all systemically important financial institutions and instruments.

THE GENESIS OF "NEW EUROPEAN SUPERVISION"

The 2009 "de Larosiere report and the emergence of weaknesses in "macroprudential" supervision, that is to say, the activity aimed at limiting the difficulties of the financial system as a whole in order to protect the economy against significant losses in terms of real output.

IN PARTICULAR:

• excessive supervisory burden on individual undertakings, to the detriment of a sector- wide benchmark;
• Lack of effective early warning mechanisms;
• lack of substantive cooperation between national supervisors;
• The lack of homogeneity in the powers of the different national supervisory authorities;

THE FIRST STEP: EUROPEAN SYSTEM FINANCIAL SUPERVISION (ESFS)

1. European Systemic Risk Board (ESRB) (Reg. 1092 of 2010)
2. European Banking Authority (EBA);

European Insurance and Occupational Pensions Authority (AEAP);

1. European Securities and Markets Authority (ESMA); (Reg. 1093, 1094, 1095 of 2010)

macro-prudential supervision micro-prudential supervision

THE TASKS OF EBA ACCORDING TO REG. 2010

1. To prepare draft regulatory technical standards and draft implementing technical standards for approval by the European Commission;
2. Adopt guidelines and make recommendations to national authorities or financial institutions with a view to establishing consistent, efficient and effective supervisory practices and ensuring the common, uniform and coherent application of Union law;

> FOR

1. Adopt acts to replace the national authorities in cases of infringement of Union law, in emergency situations and for resolving disputes between competent authorities in cross-border situations.

WITHIN THE ESFS

So far, with the exception of ESMA, which has been entrusted with direct control over transnational bodies such as rating agencies .... , and apart from the limited powers conferred on the EBA in the cases listed above at point c), the European legislator assignes to the three agencies tasks of regulation and coordination of national authorities, leaving direct supervision of intermediaries to the latter. Now see powers given to EBA under the new MICA regulation

THE SINGLE SUPERVISORY MECHANISM

• Until 2014, the ECB held the «unique» competences in the field of monetary policy. While the supervisory function had remained firmly in the hands of the national States through the various supervisory authorities.

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ACCORDING TO THE TREATY (TFEU)

UNTIL 2014:

• Art. 127, paragraph 5 (ex Art. 105), the ECB was to contribute «to the sound conduct of the policies pursued by the competent authorities about the prudential supervision of credit institutions and the financial system's stability».
• Art. 127, paragraph 6: the European Council, acting unanimously on a proposal from the Commission, after consulting Parliament and after consulting the ECB, may entrust the central bank with the task of «specific tasks regarding policies concerning the prudential supervision of credit institutions and other financial institutions excluding insurance undertakings».

CURRENT SITUATION: BANKING UNION

The three pillars:

1. The Single Supervisory Mechanism (SSM);
2. The Single Resolution Mechanism (SRM)
3. The Deposit Guarantee Fund.

THE ENTRY INTO FORCE OF THE BANKING UNION

• It starts by immediately highlighting the weakness and under capitalisation of the Italian banking system
• Our banks have not only historically been poorly capitalised ...
• However, they had not even been able to benefit from massive state aid such as that provided by Germany and the Benelux countries.

THE BANKING SUPERVISION TODAY:

ECB + NATIONAL AUTHORITIES NATIONAL AUTHORITIES SIGNIFICANT ENTITIES LESS SIGNIFICANT ENTITIES

SINGLE MECHANISM OF BANKING SUPERVISION REG. NO. 1024/2013

The ECB must supervise the activities of a number of "significant" banks (115 at that time), by size, economic importance within the Union or a participating country, because of the importance of its cross-border activities. A single Rulebook for the banking sector (prepared by the EBA) valid for all banks (significant and not).

"SIGNIFICANT>> ENTITIES, ART. 6 REG. 1024/2013

i) the total value of the assets exceeds EUR 30 billion; ii) the ratio of the total assets to the GDP of the participating Member State in which they are established exceeds 20 %, unless the total value of the assets is less than EUR 5 billion; iii) following the notification by the national competent authority that this institution is of significant importance to the national economy, the ECB decides to confirm this significance based on its in-depth assessment, including the balance sheet of the credit institution concerned. In addition, the ECB may, on its own initiative, consider an institution of significant importance when it has established subsidiaries in more than one participating Member State and its cross-border assets or liabilities represent a substantial part of the total assets or liabilities subject to the conditions set out in the methodology

ACCORDINGLY:

Since November 2014, the ECB has taken on the active tasks of banking supervision, which it exercises through the use of national authorities under the Single Supervisory Mechanism. The banking groups, belonging to the countries adopting the single currency, will be considered «significant» on the basis of the identification methodology provided for by the regulation. National authorities continue to supervise the less significant intermediaries.

THE SSM SUPERVISORY MANUAL

• be prepared by the European Banking Authority (already updated) and describe, for internal use, the processes, procedures and methodology for the supervision of significant and less significant credit institutions, as well as setting out the guidelines governing cooperation with the authorities of the participating Member States and those of third countries.

- What kind of supervision does the manual propose? - prudential; - ongoing supervision; - - particularly «intrusive».

SREP (SUPERVISORY REVIEW AND EVALUATION PROCESS)

"supervisory review and assessment process" means the process used to guide the prudential review of credit institutions and to determine whether, in addition to the minimum requirements, any additional specific own funds requirements should be imposed, reporting and liquidity, or other prudential measures.

FROM A GENERAL POINT OF VIEW: THE SUPERVISORY ACTIVITY CAN BE REALIZED:

• In the power to request information from institutions (information supervision);
• In the power to "physically" go to the offices of the institutions to search for information on the development of the activity ( inspection supervision);
• In the power to lay down general rules for all institutions or in the power to take specific decisions with a particular target (regulatory supervision).

X

THE POWERS OF THE ECB SHALL :

The ECB shall be responsible for: - the verification of compliance with prudential rules; - periodic assessment of the situation of intermediaries; ~ supervisory measures; the conduct of stress tests; manca que some important macro-prudential supervisory tasks

X

NATIONAL AUTHORITIES :

1. Supervise non-significant banks, following guidelines established by the ECB;
2. consumer protection;
3. combating money laundering and terrorist financing;
4. supervision of payment services;
5. the market functions of financial instruments;
6. The supervision of non-bank entities and the control of branches of banks authorised by third countries.

Man carro

X

WHAT ROLE DOES THE ECB PLAY TODAY?

• Very complex:
• to combine monetary and supervisory policy functions
• In addition to being a unique subject in the panorama of central bankers

ART. 5 TUB: AND THE PURPOSES OF SUPERVISION

• I. Credit authorities shall exercise the supervisory powers conferred upon them by this Legislative Decree, with regard to the sound and prudent management of supervised entities, the overall stability, the efficiency and competitiveness of the financial system, as well as compliance with credit regulations.

THE SO-CALLED COMMON PROCEDURES

• Authorisation to carry on banking activities;
• Authorisation to purchase qualifying holdings manca questa

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FUNCTIONS PERFORMED BY THE ECB FOR BOTH SIGNIFICANT AND LESS SIGNIFICANT INSTITUTIONS