Page 70 - EBA 2015.1815 Annual report 2014 web 2

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E U R O P E A N B A N K I N G A U T H O R I T Y
68
During the EU-wide stress test, the EBA also
monitored the compliance by banks with its
July 2013 recommendation on the preservation
of core Tier 1 capital. This recommendation
was addressed to competent authorities with
the aim of preserving banks’ capital levels dur-
ing the transition to the full implementation of
the CRD/CRR package. Banks’ compliance was
assessed twice by the EBA, as of 30 June 2013,
with data obtained from an ad hoc data collec-
tion, and as of 31 December 2013, as part of the
2014 EU-wide stress test. The EBA assessed
not only the nominal levels of core Tier 1 capital
compared to the minimum floor established in
the recommendation (
22
) but also the common
equity capital position of banks both on a CRD/
CRR transitional and fully loaded basis. Com-
plementing the latter, the EBA also assessed
banks’ projections and plans to get to the full
implementation of the new capital rules
22 That is 9 % of the June 2012 RWA plus the sover-
eign capital buffer as per estimated by the EBA
December 2011 recommendation.
Macro-prudential work
Although the EBA’s has a mainly micro-pru-
dential regulatory role, it has also been man-
dated to provide opinion on macro-prudential
matters. This task is mainly connected to giving
feedback on the effectiveness of the implemen-
tation of macro-prudential tools for tackling
systemic risks in specific sectors.
During 2014, following the implementation of
the CRR/CRD IV, Member States already intro-
duced various macro-prudential measures un-
der the new framework and notified the EBA.
The EBA was consulted by the EC on the mac-
ro-prudential rules in the CRR and CRD. The
EBA answered this call for advice in 2014 with
a report which assessed these rules against a
set of defined objectives for macro-prudential
policy. For the majority of measures, the EBA
argued that the objectives were only partially
achieved and therefore proposed a review of
these measures.
Box 6 — The role of supervisory colleges in the AQR and
Stress test
The AQR and EU-wide stress test exercises were important tasks for super-
visors and supervisory colleges in 2014. The EBA developed a home-host
protocol as guidance to assist relevant EU competent authorities in ensuring
effective communication and coordination of the exercises in the framework
of supervisory colleges. The objectives of the protocol were to keep all host
supervisors informed throughout the process, to ensure the planning and
coordination of work, and to ensure the exchange and discussion of results and
subsequent supervisory actions, which the EBA staff monitored.
Based on the experience from previous stress tests, the EBA highlighted the
importance for consolidating supervisors to inform college members on the
outcome of the exercises, prior to the official publication of the results in view
of the possible impacts of the publication of the results at local level. For all
‘closely monitored colleges’, and most of the ‘colleges followed on a thematic
basis’, the AQR and stress test results were shared with the college members
prior to their public disclosure.