Brussels, 25/06/2015 (Agence Europe) - Danièle Nouy, the chair of the ECB's single supervisory board is calling for greater harmonisation of prudential bank rules in order to harmonise and speed up bank supervision.
“We need to have harmonised regulation to deliver harmonised supervision,” said Nouy at a discussion with the European Parliament's economic and monetary affairs committee on Thursday 25 June. The single supervisory board is responsible for the final supervision of the 120 biggest banks in the eurozone and has to cope with the subtleties of 19 different legal systems rather than just one (as for nation supervisory bodies). The existence of so many national options makes the “task not impossible but much more complicated,” she said.
Hence the criticisms from the Netherlands about the slow pace of some supervision decision-making. Nouy, former high-ranking official at Bank of France, admitted there were delays due to the fact that the board was so new and didn't want to take decisions that would set a bad precedent. She questioned the utility of some regulatory timelines that were untenable when a supervision process initiated at the national level moved up to European level at the ECB and the European Banking Authority (EBA), such as designating SIFIs (Systemically Important Financial Institutions).
In response to Alain Lamassoure (EPP, France), Nouy described work at the ECB's single supervisory board on harmonisation national regulatory options. She said a working group had been set up to make proposals based on impact studies, mentioning “delicate” decisions about a Danish question of capital requirements in the insurance domain and deferred credit assets.
Nouy echoed the call for a speeding up of transposition of the BRRD directive on bank restructuring and insolvency made at the same EP committee by the chair of the single resolution board, Elke König (see EUROPE 11336).
Quizzed by Marco Zanni (EFDD, Italy) about the criteria that will be used for the next European bank stress tests (in 2016), the chair of the single supervisory board said that that the work would start in cooperation with the ABE in September. She said the 25 banks that failed the 2014 tests have enough time, until 31 July 2015, to boost their capital. She said the two main issues for European banks were 1) they were struggling with weak profitability due to the fragile economic environment and low interest rates and 2) large stocks of problem assets in some were affecting lending capacity (lending to the real economy).
Finally, Nouy urged the European legislator to remove uncertainty by completing the legislative process to introduce structural measures for banks (see EUROPE 11339). (Mathieu Bion)