LONDON – A new report from the Committee of European Banking Supervisors (CEBS) looks into the delegation of banking supervisory tasks. The paper provides insight into the current regulatory environment and areas for future potential progress.
The publication is in response to the Financial Services Committee’s Franq report, and its recommendations for supervisors to develop a delegation framework for supervisory tasks for the banking sector. Supervisors were requested to explore preconditions for delegation mechanisms, mostly through guidelines, and to test the arrangements.
The CEBS highlights two areas of delegation: in on-site communications (including model validations) it expects more progress to be made, except where legal or practical barriers persist; on liquidity concession models (or delegations including waivers of quantitative liquidity requirements), it says national regulatory and legal systems have established the necessary conditions for these waivers.
The publication defines the delegation of tasks, current legal situation and cases for delegation, in addition to possible future trends and general criteria for the delegation process. The report’s two annexes contain an in-depth look at current practices in the context of on-site communications and liquidity models.
The CEBS (and its two sister Level 3 committees) says it will begin work on delegation of supervision towards the end of this year, and that its current paper is to be regarded as a work in progress.
The paper can be downloaded from the following link.