2016 Deloitte Eurozone Banking Supervision Survey
Assessing the state of the Banking Union
The Single Supervisory Mechanism (SSM) is now firmly established within the European Banking Union. Since the SSM opened for business in November 2014, it has continued to grow, both in scope and influence. However, there remains much for the European Central Bank (ECB) and National Supervisory Authorities (NCA) to do to develop and embed the new supervisory approach.
To be able to plan effectively, it is important for banks to understand the impact the new supervisory regime has across the region, and to benchmark their experiences and current practices against peers. For this reason Deloitte launched its Eurozone banking supervision survey. The goals of the first survey were to monitor and analyse progress in terms of relationships, organisational impact, and technical issues regarding the new supervisory activities and regulations. In addition, it provides an overview of the topics that banks consider to be key over the short and long term.
Key issues tackled in the survey
- Many banks still have projects underway to tackle shortcomings identified following the financial crisis, including through the ECB’s 2014 comprehensive assessment exercise. New supervisory initiatives need to compete with those projects for time and resources.
- Implementation of the European Banking Authority’s (EBA’s) new guidelines on the Supervisory Review and Evaluation Process (SREP) process remains a key area of concern and uncertainty.
- The establishment of the SSM has not only increased the supervisory spent at 47% of banks by more than 50%, it also necessitated changes to the way banks manage their supervisory relationships. The impact of the new supervisory regime goes beyond the supervisory approach and the new SREP methodology.
- Banks ranked risk data aggregation, data quality, implementation of IFRS 9 and supervisory assessments of business models as the most challenging aspects of the SSM’s priorities.
The survey was conducted by the Deloitte Banking Union Centre in Frankfurt (BUCF). The Centre was established to respond to the new landscape, and in particular to support firms locally to tackle the challenges, as well as to respond to their needs in the most efficient and effective manner. The BUCF brings together a multidisciplinary team of senior and experienced professionals from its Financial Services practices across Europe. It works closely with Deloitte’s Single Resolution Mechanism (SRM) team based in Brussels and the Deloitte EMEA Centre for Regulatory Strategy (ECRS). The ECRS is a powerful resource