Within the scope of its mandate, the Banco de España actively participates in the various international organisations concerning banking resolution.
Single Resolution Board
The Single Resolution Board (SRB) is the central resolution authority within the banking union and, along with the national resolution authorities (NRAs) of the participating Member States, forms the Single Resolution Mechanism (SRM).
The SRB works closely with NRAs, the European Commission, the European Central Bank (ECB), the European Banking Authority (EBA) and the national competent authorities.
It was created by Regulation (EU) No 806/2014 on the Single Resolution Mechanism (SRM Regulation) and has been operational as an independent European Union (EU) agency since January 2015. Its main role is to ensure the orderly resolution of failing banks with minimum impact on the real economy, the financial system and the public finances of the participating Member States and beyond. The SRB is empowered to take decisions concerning significant and cross-border less significant institutions and groups and Spanish subsidiaries of foreign groups. In addition, one of its tasks is to monitor and harmonise the resolution planning of less significant institutions (Article 7(3) of the SRM Regulation). As such, the SRB publishes an annual work programme and an annual activity report.
With regard to governing bodies, depending on the tasks at hand, the SRB convenes a “restricted” Executive Session, composed of the Chair and the four further full-time Board Members. In the case of deliberations on a specific bank, an “extended” Executive Session is convened, with the above composition in addition to the Board Members that represent the relevant NRAs, depending on the geographical location of the bank in question. A Plenary Session can also be convened, which is composed of the Chair, the four further full-time Board Members and the Board Members representing all the NRAs. The Vice-Chair participates as a non-voting member, but carries out the functions of the Chair in their absence. The ECB, the European Commission and the EBA can also attend Executive and Plenary Sessions as observers.
The Banco de España plays a prominent role in the SRB’s activities, attending Plenary Sessions where decisions relating to the functioning of the applicable resolution framework are adopted, and participating in various SRB committees (such as the Administrative Committee, the Resolution Committee and the Contributions Committee). It also collaborates with the sub-working groups formed to debate and draft resolution policies that apply to banks, which are later adopted in Plenary Sessions.
European Banking Authority
The EBA is an independent EU authority which works to ensure effective and consistent prudential regulation and supervision across the entire European banking sector. Its general objectives are to maintain financial stability in the EU and to ensure the integrity, efficiency and proper functioning of the banking sector.
The EBA is part of the European System of Financial Supervision (ESFS), which comprises two other supervisory authorities: the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority. The ESFS also includes the European Systemic Risk Board, the Joint Committee of the European Supervisory Authorities and national supervisors.
The EBA’s main function is to contribute, through the adoption of guidelines and binding technical standards, to the establishment of a single rulebook for the banking sector, helping to create a level playing-field and offering robust protection to depositors, investors and consumers. The EBA also plays an important role in fostering the convergence of supervisory practices with a view to ensuring the uniform application of prudential rules.
The EBA is also in charge of assessing the risks and vulnerabilities in the EU banking sector through regular risk assessment reports and pan-European stress tests. Other tasks within the EBA’s remit are investigating shortcomings in the application of EU law by national authorities, decision-making in emergency situations, mediating disagreements between competent authorities concerning cross-border cases and acting as an independent advisory body to the European Parliament, the Council and the Commission.
The EBA performs its functions through technical working groups and standing committees (on which the Banco de España is represented), where national authorities discuss all the directives and guidelines prior to their publication. Further, where appropriate, it carries out open public consultations regarding such regulations, in order to ensure that all interested parties can provide inputs on future banking standards and guidelines.
Financial Stability Board
The Financial Stability Board (FSB) is an international organisation that monitors and makes recommendations about the global financial system. It seeks to strengthen financial systems and reinforce the stability of global financial markets.
The FSB fosters global financial stability by coordinating with national financial authorities and international standard-setting bodies that work to develop strong regulatory, supervisory and other financial sector policies. It promotes a level playing-field by encouraging the consistent implementation of these policies across all sectors and jurisdictions.
The FSB’s structure consists of the Plenary, the sole decision-making body, the Steering Committee, which implements decisions made in the Plenary, and four standing committees, which have specific but complementary responsibilities, as detailed below.
- The Standing Committee on Assessment of Vulnerabilities (SCAV) is the main mechanism for monitoring and assessing risks in the financial system.
- The Standing Committee on Supervisory and Regulatory Cooperation is charged with undertaking further supervisory analysis or framing a regulatory or supervisory policy response to a material vulnerability identified by the SCAV.
- The Standing Committee on Standards Implementation is responsible for monitoring the implementation of agreed FSB policy initiatives and international standards.
- The Standing Committee on Budget and Resources is responsible for providing the Plenary with assessments of the resource needs and options for independent raising of resources, as well as reviewing the annual budget.
FSB decisions are not legally binding, but its members commit to upholding financial stability and implementing international financial standards and agree to undergo regular reviews.
The Governor of the Banco de España is a member of the Steering Committee of the FSB. The Banco de España is also represented on the Resolution Steering Group, which leads work relating to the resolution of credit institutions, insurers and investment firms. In addition, it participates in the various working groups established under its responsibility, such as the Cross-Border Crisis Management Group.