Cebs releases report mapping EU supervisory aims

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LONDON - The Committee of European Banking Supervisors (Cebs) has published its report mapping in detail the objectives, powers and use of sanctions by supervisors across the European Union (EU).

The report is the result of two requests by the European Commission in March and September 2008, in response to the December 2007 Ecofin Council. The paper provides insight into the Commission's options for supervisory reform, especially to develop early intervention tools to crisis-manage collapsing banks.

Cebs also identifies areas for its own priorities for future supervisory convergence and the legal boundaries currently in place. Key discrepancies between supervisory powers across borders are underlined in crisis intervention powers and in the sanctions that can be brought to bear against banks caught in non-compliance.

Giovanni Carrosio, vice-chairman of Cebs, said: "In general, if supervisors appear well equipped with enforcement powers in going concern situations, substantial differences do crop up in the range of intervention measures available for ailing but solvent banks. This relates both to the measures available as well as the conditions under which these measures can be taken. In particular, powers towards the persons who effectively direct the business and towards shareholders appear rather fragmented. As for reorganisation and winding-up procedures, the respective roles of supervisory and judicial authorities vary significantly although a majority of supervisors at least play a role in such procedures."

Click here to read the report.