This will allow a more efficient management of capital across the EU.We are convinced that the banking union and progress made in financial integration allow the granting of these waivers inside the SSM without creating additional risk to financial stability.This includes the need for the EU parent company only to be set up as a (mixed) financial holding company or a credit institution, as well as to include large third country branches.Finally we support the proposal to grant capital waivers within a banking group on an EU cross-border basis, and not only locally, as is the case now.Having said that, we also consider there are still seven areas where there is room for substantial improvement in the proposal.
These are mainly those powers needed to make certain deductions in capital in order to prudently address risks which are not fully covered by the accounting rules.
It is a pleasure to participate in this hearing on the “banking legislation package”.
At the ECB, we consider the proposal to amend the CRD, CRR, BRRD and SRM Regulation timely and necessary.
Not all situations can be foreseen in legislation and not all risks can be measured in Pillar 1.
Therefore, supervisors need to keep an adequate degree of supervisory judgement to preserve risk-based and institution-specific supervision through Pillar 2, and their ability to act swiftly when needed to ensure the soundness of the EU banking sector.