CEBS offers technical advice on CAD

New consultation paper published on proposals on options and national discretions in the Capital Requirements Directive

BRUSSELS – The Committee of European Banking Supervisors (CEBS) has begun a public consultation on its proposals on options and national discretions in the Capital Requirements Directive (CRD), as part of developing its response to the European Commission's Call for Technical Advice. The consultation is open to all interested parties, including supervised institutions and other market participants.

The paper sets out CEBS’s preliminary proposals on the future treatment of options and national discretions identified in its supervisory disclosure framework, and some additional provisions that could potentially be construed as national discretions identified by market participants in their responses to CEBS’s public questionnaire. CEBS has already received input on this issue in response to a public questionnaire published on its website and in meetings with market participants. In keeping with the European Commission's better regulation agenda, the preliminary proposals are supported by a high-level impact assessment/cost-benefit analysis.

CEBS is proposing to keep about one-fifth of the 152 provisions covered in its analysis open to national discretion, but also suggests accompanying proposals, where possible, to alleviate any negative side-effects of these national discretions. CEBS notes that more than one-third of these national discretions will expire within a short time. For the other discretions, CEBS is proposing solutions that it believes can bring about further harmonisation of supervisory practices and level the playing field among institutions. Within this group, CEBS is proposing in roughly a quarter of the cases either to keep them or to transform them into supervisory decisions to be implemented and applied case by case. CEBS believes its proposals strike the right balance between the prudential concerns of its members, the flexibility supervisors need to perform their duties, and the interests of domestic and cross-border institutions.

The consultation period is now open and runs until August 15, 2008. Comments should be sent to: [e-mail].

A public hearing will take place on June 17, 2008.