BRUSSELS (MNI) – The following is the second part of a text
published by the European Commission, which answers a number of
questions regarding its proposal for a centralised Eurozone banking
supervisor:

What exactly would the powers of the ECB be? What would it do in
practice?

The ECB would be exclusively responsible for key tasks concerning
the prudential supervision of credit institutions. In particular, it
would:

– authorise and withdraw the authorisation of all credit institutions
in the euro area; assess acquisition and disposal of holdings in
banks;

– ensure compliance with all prudential requirements laid down in EU
banking rules and set, where necessary, higher prudential
requirements for banks, for example for macro-prudential reasons to
protect financial stability under the conditions provided by EU
law;

– carry out supervisory stress tests to support the supervisory
review, and carry out supervision on a consolidated basis – such
stress tests are a supervisory tool also used by national
authorities to assess the stability of individual banks; they will
not replace the stress tests carried out by the EBA with a view to
assessing the soundness of the banking sector in the Single Market
as a whole;

– impose capital buffers and exercise other macro-prudential powers;

– carry out supplementary supervision over credit institutions in a
financial conglomerate;

– apply requirements for credit institutions to have in place robust
governance arrangements, processes and mechanisms and effective
internal capital adequacy assessment processes

– carry out supervisory tasks in relation to early intervention when
risks to the viability of a bank exist, in coordination with the
relevant resolution authorities;

– carry out, in coordination with the Commission, assessments for
possible public recapitalisations;

– coordinate a common position of representatives from competent
authorities of the participating Member States in the Board of
Supervisors and the Management Board of the EBA, for topics
relating to the abovementioned tasks.

National authorities would assist the ECB. They would prepare and
implement the ECB acts under the oversight of the ECB, including
day-to-day supervision activities.

Moreover national supervisory authorities would remain responsible
for carrying out tasks not conferred on the ECB, including, for example,
on issues of consumer protection, receiving notifications from credit
institutions in relation to the right of establishment and the free
provision of services, supervising credit institutions from third
countries establishing a branch or providing cross-border services in
the EU, supervising payments services, carrying out day-to-day
verifications of credit institutions, preventing the use of the
financial system for the purpose of money laundering and terrorist
financing.

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