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E X E C U T I V E S U M M A R Y O F T H E A N N U A L R E P O R T 2 0 1 4


Promoting supervisory


Promoting supervisory convergence is an es-

sential part of the EBA’s mandate and, during

2014, the Authority developed a number of

standards and guidelines to achieve conver-

gence in supervisory methodologies and col-

lege functioning. The EBA continued develop-

ment of the European Supervisory Handbook,

the common framework for the identification,

measurement and analysis of risks in banks,

together with common guidance for supervi-

sory intervention and corrective action.

Engagement with supervisory colleges

The year 2014 was challenging for supervi-

sory convergence in colleges with a number

of changes including new legal requirements

and the supervisory transition to the Single

Supervisory Mechanism (SSM) for institutions

in Member States of the Euro area.

That same year, the EBA opted for a new en-

gagement approach with colleges aimed at

providing an appropriate level of interaction

according to the systemic importance of each

banking group. An additional category for col-

leges was created resulting in three monitor-

ing categories: closely monitored colleges,

colleges followed on a thematic basis and

other colleges.

The requirements of the EBA Colleges Action

Plan for 2014 were fulfilled to a reasonable

extent and improvements were noted in col-

lege functioning compared to previous years.

For the first time, the EBA identified a scoring

system of three levels (good, satisfactory and

improvement needed) to provide feedback at

the end of the year with identified and clear

benchmarking to colleges on their perfor-

mance and the Colleges Action Plan.

The active participation of the EBA during col-

lege meetings was welcomed by competent

authorities, in particular with regards to the

interpretation of new policy products and their

effect on the functioning of colleges and on the

content and articulation of key deliverables.

The EBA guidance on thematic topics like the

asset quality review and stress test was also

well received.

Review of cross-border banks’ critical

functions and core business lines

In 2014, in anticipation of the implementation

of BRRD, the EBA intensified its efforts to con-

tribute to the development and coordination of

effective and consistent recovery and resolu-

tion planning across Europe.

The EBA compared 27 European cross-border

banking groups — accounting for approxi-

mately half of EU banks’ total assets — spe-

cifically focusing on how credit institutions

assessed Critical Functions (CFs) and Core

Business Lines (CBLs) in their recovery plans.

The review identified substantial variation

across banking groups in terms of the overall

approach to identification, with some room for

further improvement, in particular for defin-

ing critical functions. The findings were com-

municated to competent authorities in order

to support their assessment of recovery plans

and to resolution authorities in order to assist

them in their resolution planning.

Peer reviews and training programmes

With the aim of contributing to fostering con-

sistency in supervisory outcomes, the EBA

conducted a peer review on whether com-

petent authorities were adhering to the EBA

guidelines on the management of concentra-

tion risk under the supervisory review process.

The results of the review have been used to-

wards the development of the module on cred-

it concentration risk in the Single Supervisory


In 2014, the EBA organised 15 sector and five

cross-sector trainings for competent authorities

(eight of which took place at the EBA’s office),

which further contributed to developing a com-

mon supervisory culture, skills and approaches

across competent authorities of the EU.