Mr Carosio believes that the ESAs should be given a central role in developing binding technical standards, and that the Commission endorsement should be consistent with EU law. Cross-sector regulation and the future role of a joint committee of the ESAs needs to be considered.
At the ECON Committee there was an exchange of views with Mr Giovanni Carosio , Chairman of the Committee of European Banking Supervisors (CEBS), in which he highlighted the important role that the new European Banking Authority will have in the European Financial Supervisory landscape.
Mr Carosio made the following three points:
1. The new EU financial architecture. CEBS has supported the de Larosière report and contributed to the process of creating a new financial supervisory architecture. In his view, the future ESAs should be given a central role in developing binding technical standards; their endorsement from the Commission should be consistent with EU law and coordinated with the European Court of Justice. It is crucial that the new financial architecture stresses ESAs as facilitators of College cooperation as there is need to consider cross-sector regulation and the future role of a joint committee of the ESAs in order to ensure that the three sectors work smoothly. There should be an IT infrastructure to share information and facilitate EBAs task.
2. Basel Committee proposals on banking regulation. On banking regulation, Mr Carosio emphasised that solutions should be global. The Basel Committee has issued specific proposals and some are now to be implemented. CEBS has always contributed when asked by the Commission on CRD III. CEBS’s advice also included remuneration in order to discourage risk taking. CEBS is now moving further in order to assist firms to comply with the recommendations and principles and carrying work on the analysis of banks that have already applied remuneration policy.
3. CEBS priorities. CEBS is currently considering a number of consultations, for example, on concentration risk and on Tier One. The work will be finished by the first half of 2010 and will be facilitated by published guidelines and principles. Cross-border crisis management on the financial sector is another priority as all national supervisors should have common tools to identify problems in banks and be able to intervene if needed. CEBS has identified several tools to help supervisors.
José Manuel García-Margallo y Marfil (EPP/ES) asked who will pay in case of a possible bankruptcy in cross-border groups. Mr Carosio said that that question is one of the most polemic questions. CEBS has worked on the idea that this problem could be tackled by agreements on the supervisors involved on a particular supervisory group and whether these agreements could be extended to the intervention and resolution of the crisis. Living wills have been proposed as a method to solve this problem. The possibility of relying on EU funds could also be a solution, although CEBS is more focused on deposit guarantee schemes.
Vicky Ford (ECR/UK) wanted to know about the new staffing for the ESBA. CEBS will increase from 20 to 90 in four years. This is an important increase and it will not be a huge institution.
When asked about how legally binding the rules for burden sharing will be, he said that the only practical solution is to assume that there will be a tailor-made solution for each banking group, and also to explain what authority will take what actions so as to control the potential situation of cross-border bankruptcy.
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