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Policymakers, on their side, should help
this process by providing a greater degree
of certainty on the regulatory framework, in
particular on the approach to restructuring
and resolving banks under stress. The un-
certainties shown in dealing with the crisis
in Cyprus have proven a destabilising force,
determining some backtracking in the pro-
gress achieved in stabilising funding mar-
kets. A new, clear and credible pan-European
framework for crisis management and reso-
lution is an absolute priority, and the EBA is
committed to contributing to its effective de-
sign and implementation.
The second priority for the EBA has been the
realisation of the Single Rulebook in banking,
i.e. the design of a more uniform regulatory
framework based on technical standards dir­
ectly applicable throughout the EU, without
any need for national implementation. As
pointed out in the report of the de Larosière
Group, which led to the establishment of the
EBA, the Single Rulebook is a key policy tool
for the effective functioning of the single
market: without using exactly the same defi-
nition of regulatory aggregates and the same
methodologies for the calculation of key re-
quirements, the problem of regulatory arbi-
trage, which played such an important role in
the run up to the crisis, will not be fixed.
The capital requirements regulation and dir-
ective (the so-called CRD IV package), which
is being finalised, will provide the basis for
the Single Rulebook in banking. In 2012, the
EBA conducted public consultations on 23
draft technical standards. The bulk of our
work — 16 draft standards — has focused on
the definition of capital, possibly the most im-
portant area in which truly uniform standards
are required. Preparing standards of good
quality in a very tight time frame is not the
only challenge facing the EBA. We will also
have to maintain these standards against
financial innovation and the development of
business practices. This is why we have also
developed a framework for questions and an-
swers, which will provide a web-based tool to
ensure that the standards are actually lead-
ing to consistent supervisory outcomes in a
fast changing world.
Finally, let me turn to the great challenge of re-
pairing the institutional framework for financial
stability. The sovereign debt crisis sent strong
signals that a rapid change of gear was needed
to place the banking sector on a more sound
footing and restore confidence in the euro as
part of a longer term vision for economic and
fiscal integration. One of the key steps of this
process was the decision to shift the direct
supervision of banks to the European level
through the establishment of the Single Super-
visory Mechanism (SSM) under the umbrella of
the European Central Bank (ECB). The SSM is
a real window of opportunity to ensure that a
similar need for consistency to that underly-
ing the Single Rulebook arises also in terms
of ­supervisory practices. This is an area where
the EBA is willing to bring in its contribution
and expertise with the development of a Single
­Supervisory Handbook: a common framework for
the identification, measurement and analysis of
risks at banks, together with common guidance
for supervisory intervention and corrective ac-
tion across the whole European Union could be
a step change towards consistent and higher
quality supervision and effective oversight of
cross-border groups in colleges of supervisors.
The concrete achievements of the EBA in its
second year of existence could not have been
possible without a cumulative combination of
factors: hard work of committed staff, active
participation of experts from national supervis­
ory authorities, and an open internal debate
coupled with the application of majority voting.
I would like to take this opportunity to thank
the members of the Board of Supervisors
for the support provided to the development
of the Authority. A special thank you goes to
Matthew Elderfield, who just recently stepped
down as alternate Chair of the EBA, after hav-
ing contributed enormously to the progress in
our internal discussion and in fostering open
and constructive discussion in our decision-
making bodies. Our internal processes are
now better established and have proven their
ability to deliver, also under stressed condi-
tions. Looking forward, all our energies will be
required to continue the repair process of the
European banking sector, contrast the worst
legacy of the sovereign debt crisis, the seg-
mentation of the single market along national
lines, and make progress in the construction
of a true Single Rulebook.