1. Presentation of the ECB Framework Regulation Organisational aspects
Tallinn, 26 February 2014

2. Timeline SSM Regulation enters into force Public hearing
Publication on the ECB’s website
SSM takes over banking supervision
Submission to the European Parliament
3 Nov. 2013
4 Feb.
19 Feb.
by 4 May
4 Nov.
30 Jan. 2014
7 Feb.
7 March
May
Publication in Official Journal
End of public consultation
Supervisory Board endorses draft Framework Regulation at its first meeting
Launch of public consultation

3. Legal basis
Articles 6 and 33(1) SSMR
ECB shall adopt and make public (by 4 May 2014) a framework to organise the practical arrangements for the implementation of the cooperation between the ECB and NCAs within the SSM.
Article 33(2) SSMR
ECB shall publish by means of regulations and decisions the detailed operational arrangements for the implementation of its supervisory tasks.
Article 4(3) SSMR
ECB may adopt regulations for the carrying out of its supervisory tasks.
The framework will be an ECB regulation.

4. Structure of the draft Framework Regulation
Part I – General provisions
Part II – Organisation of the SSM
Part III – Operation of the SSM
Part IV – Methodology for assessing significance
Part V – Common procedures
Part VI – Significant credit institutions
Part VII – Less significant credit institutions
Part VIII – Macro-prudential supervision
Part IX – Close cooperation
Part X – Administrative Penalties
Part XI – Access to information, reporting, investigations and on-site inspections
Part XII – Transitional and final provisions

5. ECB as a banking supervisor – institutional impact
Shared Services (IT, Legal, HR, Statistics)

6. SSM Functioning of the SSM ECB JST Less significant banks
oversees the system
Grants/withdraws authorisations, assesses qualifying holdings
JST
(ECB/
NCAs staff)
Grants/withdraws authorisations, assesses qualifying holdings
May “call-up” direct supervision
NCAs
Direct supervision
Direct supervision
Significant banks
Less significant banks

7. Banking supervision by the SSM
Direct supervision by the ECB
Direct supervision by the NCAs
Significant banks
as defined under the SSMR by:
size
importance for EU or domestic economy
significant cross-border activities
Less significant banks
when necessary to ensure consistent application of high supervisory standards
Banks that have requested or received ESM or EFSF public financial assistance
Three most significant banks in each participating Member State
Day to day supervision of significant Cis will be carried out by the ECB while the NCAs will do the same regarding less significant institutions.
The ECB may “call-up” for direct supervision less significant Cis

8. Methodology for assessing significance
Procedures
assessment and ongoing review of a bank’s significance
determination of the date on which a change of status/supervisor takes effect and its impact on pending procedures
ECB takes decisions on changes in status
Size
main criterion
Framework Regulation specifies how the total value of assets is determined
significance is determined at highest level of consolidation
ECB lists
of significant banks
of less significant banks and their respective NCAs
published on the ECB’s website and updated regularly

9. Supervision of Significant Banks
Supervisory Tasks conferred to the SSM:
Authorization, withdrawal and assesment of qualifying holdings
Passport
Ensure compliance with requirements on capital, leverage, liquidity, and governance
Supervisory review and Supervisory powers (Pillar 2)
Consolidated supervision and supervision of conglomerates
On-site inspection
Early intervention where a bank breaches requirements (coordinating with resolution authorities)
Sanctions
Macroprudential tasks

10. Micro-prudential tasks
Colleges of Supervisors
ECB will chair colleges for any significant groups with branches/subsidiaries outside the SSM and in non-EU countries
ECB will participate in the colleges for non-SSM groups with branches/subsidiaries that are significant within the SSM
Passport issues
CRD IV procedures no longer apply for the establishment of branches within the SSM
for banks within the SSM wishing to establish a branch outside the SSM, the ECB will be the home authority for significant banks and the NCA for less significant banks
Financial conglomerates
ECB will act as coordinator if the bank belonging to the financial conglomerate is significant
supervision of insurance firms is excluded

11. Supervision of significant banks
ECB is the entry point for requests (unless expressly provided otherwise)
JST analyses and prepares a draft decision
Decision-making Supervisory Board submits draft decisions to Governing Council
NCAs
assist the ECB by preparing a draft decision upon request or on their own initiative
follow the ECB’s instructions

12. Significant institutions Less significant institutions
Close cooperation
General principles
ECB’s position will be comparable to the one it holds in respect of supervised entities and groups established in euro area countries
ECB may not act directly vis-à-vis banks but through instructions, requests or guidelines addressed to NCAs
Significant institutions
establishment of JST for each institution
ECB will be consolidating supervisor
NCAs adopt decisions in respect of significant supervised entities only upon the ECB’s instructions
Less significant institutions
ECB may issue general instructions, guidelines or requests to the NCA under close cooperation

13. ECB’s supervisory powers
Request for information
ECB may require information that it considers necessary from any person referred to in Article 10(1) SSMR
before making a request, the ECB will take into account the information available to NCAs
Supervisory Reporting
ECB is the competent authority for supervisory reporting by significant banks and NCAs for that by less significant banks
NCAs are the single entry point and perform initial data checks
On-site inspections
draft Framework Regulation sets out the procedures for:
the decision to conduct an on-site inspection
the establishment of an on-site inspection team
the notification of an on-site inspection

14. Transitional provisions
Start of the ECB supervision
ECB sends a decision to significant banks of their status two months prior to start of supervision
bank has the right to be heard
Continuity of existing procedures
supervisory procedures initiated by NCAs will generally continue after the ECB starts supervision
Countries adopting the euro
transitional provisions will apply to countries that join the euro area after the start of the SSM
comprehensive assessment of banks established in countries that join the euro area
Continuity of cooperation agreements
MoUs and other cooperation agreements will continue to apply
ECB may decide to participate

15. Thank you for your attention Jean-Christophe Cabotte jean-christophe
Thank you for your attention Jean-Christophe Cabotte