The European Commission hopes to garner the opinions of the stakeholders on the functioning of the current banking macro-prudential framework, in a consultation to run until Wednesday 26 October.
At European level, the institutional architecture of the banking macro-prudential framework, which was set in place after the financial crisis of 2008, is based mainly on the European Systemic Risk Board (ESRB). The 'CRR-CRDIV' legislative package revising the banking prudential framework establishes macro-prudential rules. In November 2014, these were added to by the Single Supervision Mechanism, the 'supervision' pillar of Banking Union in the eurozone, in the framework of which the European Central Bank supervises the 130 largest banking groups in the eurozone.
In its consultation document, the Commission notes that the current framework confirms the close link between the analysis of the underlying risks and the supervisors' work to put together an adequate response to deal with and contain the risks identified. And at national level, the member states prefer to use flexible instruments and use non-harmonised tools at European level, particularly when it comes to dealing with the banking exposure of the real estate sector, the Commission observes.
The ESRB, which does not have its own legal personality or budget, focuses its attention on the risks brought about by the banking system. Its mandate and structure could be extended to put the committee into a better position to be able to assess developments in a sector which is increasingly financing itself on the market. The competences of the ESRB, particularly its non-binding powers to issue warnings and recommendations, are also under examination.
Additionally, the Commission notes "overlaps" and "tensions" related to the application of capital requirements under the second pillar of the revised banking prudential framework. This is a "particularly challenging issue as it also entails coordination difficulties between competent and designated authorities, and might pose a problem of transparency, given that Pillar 2 requirements are usually not publicly known".
For more information, see: http://ec.europa.eu/finance/consultations/2016/macroprudential-framework/index_en.htm. (Original version in French by Mathieu Bion)