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Europe issues home-host and pillar 2 guidelines

LONDON, (Global Risk Regulator) – Further enhancement of the role of the so-called consolidating bank supervisor in Europe is not possible under the current legal framework, Europe’s banking supervisors said today with the issue of new guidelines on supervisory co-operation for cross-border banking.

The Committee of European Banking Supervisors (CEBS), the London-based body whose principal task is to oversee the implementation of the European Union’s version of the Basel II bank safety rules, notes that some banks would like to see the role of consolidating, or home-country supervisor, further augmented.

But it’s not possible under the Capital Requirements Directive (CRD), which transposes into EU law the Basel II bank capital adequacy rules that are aimed at bolstering the solvency of the global banking system.

However, CEBS, which comprises top banking supervisors from the 25 EU member states, says it’s fully committed to work towards regulatory convergence and enhanced co-operation between EU regulators in order to achieve efficient supervision.