Stellungnahme DK zu den EBA-Leitlinien zum aufsichtlichen Überprüfungsprozess SREP
The German Banking Industry Committee (GBIC) welcomes the opportunity to comment on the EBA’s consultation paper. Before responding to questions 1 to 6, we would like to make some general comments on the draft guidelines.
Including an analysis of business models and of the sustainability of business strategies in the SREP guidelines introduces an important new element to banking supervision. The benefit of this new element will lie above all in the information which will assist in planning and support the other elements of the SREP. We would strongly oppose any inference that supervisors should have a say in banks’ business policies. Supervisors should not see themselves as “better bankers” than the banks themselves. Nor, as representatives of the state, are they in a position to assume the responsibility associated with playing an active role in business policy decisions. This is a task for the banks’ owners and management alone.
Furthermore, the proposed guidelines significantly extend the authority of supervisors in a number of areas. In addition to the direct analysis of the business model and the ability to impose risk management requirements and play a part in the allocation of capital, there is potential for interference in a bank’s management and business policy. This lies outside the remit of banking supervision, as we understand it. Pillar 2 of the Basel framework was designed as a basis for banks’ internal management processes. A joint exercise of business management by supervisors and banks would be the wrong approach, in our view.
We believe that, by neglecting to take internal capital into account and focusing solely on own funds, the EBA is exceeding its mandate. CRD IV requires the SREP to relate to banks’ internal processes for assessing their capital adequacy (ICAAP), which draw on internal methods of measuring their risks and calculating how much internal capital is needed to cover them. CRD IV also expressly requires the impact of diversification effects to be taken into account. As a result of the EBA’s “Pillar 1 plus” approach, the relevance of internally generated management input would be sharply reduced under Pillar 2 and regulatory capital requirements could rise significantly above the level required under Basel III. We therefore strongly advocate both retaining the existing ability for banks to select their own risk management methods in Pillar 2, since this is essential to holistic management processes, and continuing to recognise internal capital and diversification effects across risk types. In addition, the effect of the proposed guidelines on the level of capital requirements should be thoroughly analysed in an impact assessment study. […]