Corporate Governance of Banks in Eurasia Mr Michael Wurz, Director of Financial Markets Analysis and Surveillance Division, Austrian National Bank CEBS and its guidelines on supervisory disclosure London, United Kingdom 30 April 2008 The views expressed in this paper are those of the author and do not necessarily represent the opinions of the OECD or its Member countries or the European Bank for Reconstruction and Development
Agenda 1. Introduction of CEBS 2. The Supervisory Disclosure Framework 2
Committee of European Banking Supervisors 3
CEBS` composition and tasks High-level representatives from all 27 EU-Member States: EU banking supervisory authorities EU central banks and European Central Bank (ECB) Advice to advise the European Commission on banking issues Convergence to foster a common day-to-day implementation and application of Community legislation Cooperation to promote supervisory cooperation and provide for the exchange of supervisory information 4
Examples of CEBS` working areas Advice Own funds Large exposures Liquidity Basel II implementation Guidelines (e.g. Pillar 2) Reporting frameworks Peer Review Cross-border supervision Home-host cooperation Operational networking / Supervisory colleges Crisis management 5
Agenda 1. Introduction of CEBS 2. The Supervisory Disclosure Framework 6
Definition Supervisory disclosure is defined as a comprehensive policy of transparency. Its aim is to make information related to prudential supervision available in a timely manner to all interested parties. The framework for supervisory disclosure is meant only to provide information. 7
Objectives Enhancing the effectiveness of supervision comprehensive overview of the supervisory and regulatory framework in the EU easy access to information via internet Helping to promote a levelplaying field throughout Europe consistent implementation of legislation across the EU meaningful comparisons of the choices made at the national level in the implementation of the CRD 8
Content of Disclosure Oest er r eichische Nat ional bank The content follows Article 144 of Directive 2006/48/EC requiring competent authorities to disclose four main types of information: 1. Rules and guidance covers national laws and regulations in the field of prudential supervision and regulation, 2. Options and national discretions refers to the information about how options and national discretions are exercised, 3. Supervisory review deals with the general criteria and methodologies used by competent authorities in their supervisory review and evaluation process referred to in Article124, 4. Statistical data refers to statistical data on key aspects of the implementation of the prudential framework. 9
The underpinning principles The common European supervisory disclosure framework is based on the following principles: Neutrality with regard to the legal framework of each Member State Availability of information in English, to be provided on a best effort basis, taking due account of the translation burden for non English-speaking countries Confidentiality principle on exchange of information and professional secrecy as stated in the CRD apply Avoidance of disproportionate burden for supervisors Annual review of the framework 1
Main navigation Link to CEBS Guidelines Link to the sites of national authorities 1
Link to the text on CEBS website Link to national website for more detailed information 1
Useful Links Oest er r eichische Nat ional bank A demonstration of the functionality of the framework is available on the CEBS website at www.c-ebs.org/sd/sdtf.htm. Link to the CEBS Guidelines on Supervisory Disclosure www.c-ebs.org/pdfs/gl05.pdf. Webpage for queries and responses to facilitate correct and coherent transposition of the CRD in all MS legislations: www.c-ebs.org/crdtg.htm 1
Conclusions Oest er r eichische Nat ional bank The framework is the first step towards greater transparency on the part of supervisors. It is also an evolutionary process capable of adapting gradually to future changes in the rules, needs and practices of both supervisors and institutions. As disclosure of information by banks is expected to support market discipline, supervisory disclosure is expected to act as a disciplinary device towards consistent implementation of the CRD. 1
Contact: Thank you for your attention Dr. Michael Würz Financial Markets Analysis and Surveillance Division Oesterreichische Nationalbank Otto-Wagner-Platz 3 A-1090 Vienna Tel: +43-1/404 20-3101 Fax: +43-1/404 20-3199 Email: michael.wuerz@oenb.at 1