Achieving Sustainable Financial Stability

Transcription

1 Achieving Sustainable Financial Stability Conference Berlin October 2, 2014 Elke Gurlit

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4 Overview I. Instruments 1. The new macro-prudential instruments 2. Who has got the power to apply them? 3. Applying macro-prudential tools: adjudicatory or regulatory? II. Institutional framework 1. National level 2. European level SSM SRM 3. Changes of the Treaty?

5 I. Instruments The new macro-prudential tools 1. Capital-based instruments Capital conservation buffer, Art. 129 CRD IV (1/2016) Countercyclical buffer, Art. 130 CRD IV (1/2016) Buffer for G-SIIs and O-SIIs, Art. 131 CRD IV (1/2016) Systemic risk buffer, Art. 133 CRD IV (1/2014) Risk weights for real estate risks, Art. 124, 164 CRR 2. Liquidity-based instruments, Art. 105 CRD IV Liquidity coverage ratio, Art. 412, 460 CRR (1/2015) Net stable funding ratio, Art. 413, 510 CRR (> 2016) 3. Add-on: Pillar 2 measures (Art. 97 et seq CRD IV) 4. National flexibility measures (Art. 458 CRR) Still missing: quantitative limits Leverage ratio Demand-based limits (LTV, LTI)

6 Instruments Who has got the power to apply them? 1. National authorities Specific macro-prudential tools: NCA/NDA Micro-prudential tools for macro purposes: NCA in Germany: in both instances BaFin 2. ECB Parallel competences No limitation on significant credit institutions Limitations: within the SSM, excluding non participating member states covered measures: excluding optional Union Law, eg. SRB? only power to apply higher requirements

7 Instruments The art of applying macro-prudential tools Example: The countercyclical buffer 1. Operationalising objectives 2. Knowledge of the transmission channels 3. Calibration of the buffer quote 4. The legal challenge: The construction of the CCB: no firm-specific administrative act, but normative requirement Quote-setting by NCA/NDA, ECB Application of the quote by credit institutions acc. to the location (jurisdiction) of relevant credit exposures firm specific buffer Nature of quote-setting? relevance of qualification adjudicatory or regulatory?

8 Institutional framework The national level 1. The BaFin as NCA for micro-prudential supervision 2. The BaFin as NCA/NDA for macro-prudential supervision Lack of knowledge concerning the application of macro-prudential tools Potential conflicts: conflicts with microprudential objectives when applying macroprudential tools internal conflict when using micro-prudential tools for macroprudential purposes 3. The BuBa as NDA for hard macro-prudential instruments? Independence is provided for monetary tasks, not banking supervision (Art. 88 GG, Art. 130 TFEU)

9 Institutional framework Secondary Union law 1. Single Supervisory Mechanism, SSM Art. 127 VI TFEU as legal basis? specific tasks kind of scatchy Does not allow cross-sectional supervision Fragmentation: Eurozone vs internal market Governance Governing Council as decision-making body (Art. 129 TFEU, Art. 13 II 1 TEU) Decisions of Supervisory Board need adoption by G.C. Partly identity of persons of Supervisory Board and G.C. Conflicts of monetary and supervisory tasks (Art. 25 SSM-Reg) Independence Monetary policy, Art. 130 TFEU Banking supervision, Art SSM-Reg; Art. 298 or 130 TFEU?

10 Institutional framework Secondary Union law 2. Single Resolution Mechanism, SRM Linked to the SSM Fragmentation Legal Basis: Art. 114 TFEU ECJ: Meroni and ESMA decisions: institutional balance COM and Council can object resolution decision (Art. 18 VII SRM-Regulation) Within 24 hours Dilemma: democratic control vs. efficacy

11 Institutional framework Changes of Primary Law? 1. Providing a legal basis in primary law for creation of a distinct financial supervisory authority Supervision in all member states Cross-sectional Separation of monetary and supervisory tasks You better forget about it 2. Creation of a decision-making body within the ECB Allowing for separation of monetary and supervisory functions 3. Clarifying or broadening the basis in Art. 127 VI TFEU 4. Explicit legal basis for SRM in acc. with Meroni and ESMA-judgments