The Banco de España, within the scope of its powers, assumes an active role in the different international organizations that address the issue of resolution.
The Single Resolution Board (SRB) is the central resolution authority within the Banking Union and, together with the National Resolution Authorities of the participating Member States, constitutes the Single Resolution Mechanism (SRM).
The SMR works in close collaboration with the National Resolution Authorities, the European Commission, the European Central Bank (ECB), the European Banking Authority (EBA) and the competent national authorities.
It was created under Regulation (EU) No 806/2014 on the Single Resolution Mechanism (SRM Regulation) and began its activities as an independent agency of the European Union in January 2015. Its main role is to ensure the orderly resolution of bankrupt banks, with minimal repercussion on the real economy, the financial system and the public finances of participating Member States and other countries. The SRB is empowered to make decisions in relation to significant institutions or groups and cross-border groups. In addition, it plays a control and harmonization role in the planning of the resolution of less significant institutions (article 7.3 of the SRM regulation).
Regarding its governing bodies, depending on the issues to be addressed, the SRB meets in a restrictive executive session formed by the Chair, Vice-Chair and four full-time members. The ECB, the EBA and the European Commission may also attend as observers. The SRB can also meet in an extended executive session when the issues of a specific bank are addressed. In which case, the corresponding NRA members will be added to the previous composition. Lastly, the SRB meets in its plenary session, which is composed by the Chair, the four full-time members and the representatives of all NRAs.
The Banco de España has a prominent participation in the activities of the SRB, both through its attendance to plenary sessions in which decisions regarding the functioning of the applicable resolution framework are adopted, as well as through its participation in the different work groups constituted by the Member States in which the resolution policies applicable to entities are debated and elaborated. The Banco de España also actively collaborates in the work of the different committees of the SRB, such as the Administrative and Budget Committee, the Resolution Committee, and the Fund Committee.
The European Banking Authority (EBA) is an independent authority from the European Union (EU) that works to guarantee a consistent and effective level of prudential regulation and supervision throughout the European banking sector. Its general objectives are to maintain financial stability throughout the EU and to ensure the integrity, efficiency and proper functioning of the banking sector.
The EBA is a part of the European System of Financial Supervision (ESFS) which is composed by three supervision authorities: the European Securities and Markets Authorities (ESMA), the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA). The system also encompasses the European Systemic Risk Board (ERSB), as well as the Joint Committee of the European Supervision Authorities and the National Supervisory Authorities.
The main role of the EBA is to contribute, through the adoption of binding guidelines and technical standards, to the creation of a European Single Rulebook in banking, thus helping to create a level playing field and offering a high degree of protection to depositors, investors and consumers. The EBA also plays an important role in promoting convergence of supervisory practices with the goal of guaranteeing harmonised application of prudential standards. The EBA is also responsible for assessing the risks and vulnerabilities of the EU banking sector through regular risks assessment reports and pan-European stress tests. Other tasks included in the EBA’s mandate are the investigation of deficiencies in the application of European regulations by national authorities, decision-making in emergency situations, mediation in case of disagreement between competent authorities in cross-border situations and the exercise of the function of independent advisory body to the European Parliament, the Council or the Commission.
The EBA carries out its functions through technical working groups and permanent committees, in which the Banco de España is represented and in which national authorities discuss all guidelines and recommendations before publication. In addition, when appropriate, public consultations are carried out in relation to such regulations with the purposes of ensuring that all interested parties have the opportunity to contribute to future standards and guidelines on the banking sector.
The Financial Stability Board (FSB) is an international organization that monitors the global financial system and makes appropriate recommendations. Its goal is to strengthen financial systems and enhancing stability of international financial markets.
The FSB promotes international financial stability through the coordination between national financial authorities and international standard-setting bodies, in order to develop robust regulatory, supervisory and other financial sector policies. It also fosters a level playing field by promoting consistent implementation of these policies in all sectors and jurisdictions.
The structure of the FSB includes the Plenary as the only decision-making body, a Steering Committee that executes the decisions made in the Plenary, and four Standing Committees with different albeit complementary responsibilities:
- The Standing Committee on Assessment of Vulnerabilities (SCAV), which is the primary mechanism to identify and assess risks in the financial system.
- The Standing Committee on Supervisory and Regulatory Cooperation (SRC), which is responsible of carrying additional supervisory assessments or formulating a regulatory or supervisory policy response to a material vulnerability identified by the SCAV.
- The Standing Committee on Standards Implementation (SCSI), which is responsible for monitoring the implementation of international standards and policy initiatives agreed by the FSB.
- The Standing Committee on Budget and Resources (SCBR), which is in charge of informing the Plenary of the resource needs and independent resource sourcing options, as well as the annual budget.
The decisions of the FSB are not legally binding but its members are committed to keep financial stability and implement the international financial standards, and they agree to undergo periodic reviews.
The governor of the Banco de España is a member of the Steering Committee of the Financial Stability Board. The Banco de España is also represented in the Resolution Steering Group (ReSG) which leads works on aspects related to the resolution of credit institutions, insurance companies and investment service companies. In addition, it is a part of the different working groups established under the FSB’s responsibility, such as the Cross-Border Crisis Management Group.