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 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
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
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.