Page 55 - EBA 2015.1815 Annual report 2014 web 2

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2 0 1 4 a n n u a l r e p o r t
53
Promoting Supervisory
Convergence
The EBA promotes cross-border supervisory
cooperation for those banking groups that op-
erate in more than one EU country as well as
mediating cross-border disputes. Supervisory
convergence was a key topic in 2014, with the
EBA’s efforts focused on:
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facilitating convergence of supervisory
practices through further work on the Euro-
pean Supervisory Handbook;
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driving convergence through a range of su-
pervisory training seminars;
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improving processes and cooperation for
key supervisory tasks in supervisory colleg-
es; assessment of equivalence of confidenti-
ality provisions of third countries to promote
consistent treatment of third countries;
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continuing work on matters related to re-
covery and also beginning engagement with
resolution authorities.
To facilitate the above, the EBA has developed
a number of communication and support tools.
Developing the European Supervisory
Handbook
Leading on from the work on the Single Rule-
book in providing a single set of harmonised
prudential rules for institutions and com-
petent authorities, the EBA has continued
development of the European Supervisory
Handbook. This is a common framework for
the identification, measurement and analy-
sis of risks in banks, together with common
guidance for supervisory intervention and
corrective action. The Handbook is a nonbind-
ing collection of supervisory best practices to
be applied in the EU. The first module of the
Handbook focused on business model analy-
sis while the second module focused on the
supervisory assessment of recovery plans,
operationalising the requirements of the
technical standards and guidelines covering
the area of development and assessment of
recovery plans, and providing practical su-
pervisory tools to facilitate the assessments.
The Handbook module also aims at helping
competent authorities in the assessment and
reaching a joint decision on group recovery
plans by providing common processes to be
followed by supervisory colleges.
Engagement with supervisory colleges
2014 was a challenging year for supervisory
convergence in colleges. A number of tasks
were undertaken which included implement-
ing new legal requirements like the joint deci-
sion on liquidity; carrying out the key thematic
exercises like the Asset Quality Reviews (AQR)
and Stress test (see Box 6); and oversee-
ing the important transition for institutions
in a Eurozone Member State in cases where
supervision was transferred to the SSM on 4
November 2014. However, significant progress
continued and colleges remained vital as the
forum for supervisory cooperation for cross-
border banking groups.
The EBA opted for a new approach for en-
gaging with colleges in 2014 with the aim of
providing an appropriate level of interaction
according to the systemic importance of each
banking group. To achieve this, an additional
category for colleges was created resulting in
three monitoring categories: ‘closely moni-
tored colleges’ involving a more intense level
of communication between the EBA and the
respective home supervisors; ‘colleges fol-
lowed on a thematic basis’ where EBA staff
interacted with the colleges on specific topics,
and ‘other colleges’ where a group-based ap-
proach was used in the EBA communication
with the relevant home supervisors. This ap-
proach enabled a more efficient use of re-
sources.
Additionally, to support the transition of tasks
to the SSM while re-establishing colleges
with the new supervisor, the EBA provided as-
sistance to the SSM with the aim of ensuring
continuity of college activities throughout the
transition process.