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European Banking Authority (EBA)
The European Banking Authority (EBA) is the micro-prudential supervisory authority for the banking sector in the European Union and forms part of the European System of Financial Supervision (ESFS). The EBA has its seat in Paris DNB is a member of the Board of Supervisors , which is the EBA's supreme decision-making body.
The EBA is the successor to the Committee of European Banking Supervisors (CEBS) and was established effective 1 January 2011 by a Regulation of the European Parliament and the Council.
Tasks and powers
The EBA has the following main tasks:
- to contribute to the establishment of high-quality common regulatory and supervisory standards and practices;
- to contribute to the consistent application of EU regulations, in particular by contributing to a common supervisory culture by the national supervisory authorities and preventing regulatory arbitrage;
- to mediate and settle disagreements between EU supervisory authorities on the application of EU regulations.
To this end, the EBA has the power to set binding technical standards, guidelines and recommendations. Binding standards are endorsed by the European Commission, have direct application, and need not be implemented in national legislation and regulations. Guidelines and recommendations must be implemented nationally and operate on the “comply-or-explain” principle. In the event of an emergency situation declared by the ESRB and the European Council, the EBA has power to give instructions to a national supervisory authority. In such cases, the EBA only bypasses a national supervisory authority if the latter fails to apply an EBA instruction to the institution concerned and if European regulation is not applied correctly. However, under no circumstances may an EBA instruction have consequences for a Member State’s national budget.
Structure of the EBA
Board of Supervisors
Mandated to guide the activities of the EBA, the Board of Supervisors is the supreme decision-making body. The Board of Supervisors is an independent body whose members are required to act in the interests of the European Union. The Board of Supervisors is composed of voting and non-voting members. The voting members are those at the head of national authorities in European member states responsible for the (prudential) supervision of credit institutions. The non-voting members are the EBA Chairperson and the delegate members from the European Commission, the ECB, the ESRB, the EIOPA and the ESMA.
In principle, the Board of Supervisors decides by majority of votes. Only decisions about binding technical standards, guidelines and recommendations are made on the basis of a qualified majority of votes as defined in the Treaty of Nice.
There are six Standing Committees, discussing matters on a level just below the Board of Supervisors:
- Standing Committee on Regulation and Policy (SCRePol)
- Standing Committee on Accounting, Reporting and Auditing (SCARA)
- Standing Committee on Oversight and Practices (SCOP)
- Standing Committee on Consumer Protection and Financial Innovation (SSConFin)
- Standing Committee on Payment Services (SCPS)
Resolution Committee (ResCo) and the Standing Committee on Anti-Money Laundering and Countering Terrorist Financing (AMLSC)
The Standing Committees work on specific subjects within the EBA. In accordance with the Bank Recovery and Resolution Directive (BRRD), the Board of Supervisors has delegated specific tasks regarding the resolution of financial institutions to the ResCo. The Member States’ national resolution authorities are represented in the ResCo. The AMLSC discusses tasks related to the prevention of money laundering and terrorist financing and presents them to the Board of Supervisors.
The EBA Management Board is composed of a Chairperson and six members selected from the Board of Supervisors. The Management Board members are required to act in the interests of the European Union. The Management Board’s tasks include ensuring that the EBA carries out its mission and tasks in conformity with the regulations, drafting the EBA work programme and approve the EBA's internal operational decisions. The Board decides by majority of votes.
The EBA Chairperson represents the EBA and is elected by the Board of Supervisors. The EBA Chairperson is responsible for the preparation of the activities of the Board of Supervisors and chairs the meetings of the Board of Supervisors and the Management Board. The EBA Chairperson is elected for a term of five years, which may be extended once.
The Executive Director is in charge of the management of the EBA and is elected by the Board of Supervisors. The Executive Director is responsible for the day-to-day management of the EBA and the preparation of the Management Board’s activities. The Executive Director ensures that the EBA’s annual work programme is executed in accordance with the instructions issued by the Board of Supervisors and under the supervision of the Management Board. The Executive Director is elected for a term of five years, which may be extended once.
Joint Board of Appeal
The Joint Board of Appeal is a joint body for all three European Supervisory Authorities (EBA, ESMA and EIOPA). Composed of six members, it decides on appeals lodged against individual decisions of the EBA. Appeal to decisions by the Joint Board of Appeal lies with the Court of Justice of the European Union. Employees of the EBA, national supervisory authorities and other institutions affiliated with the EBA are barred from membership of the Joint Board of Appeal. Decisions are taken by a majority of four outr of six votes.
Banking Stakeholder Group
The Banking Stakeholder Group's objective is to promote consultations with all stakeholders in all areas relevant to the EBA’s tasks. The Banking Stakeholder Group's role is to help facilitate consultation with stakeholders on binding technical standards, guidelines and recommendations of the EBA. The Banking Stakeholder Group comprises of 30 members appointed to represent in balanced proportions credit and investment institutions operating in the European Union, consumers and other stakeholders. At least four of the members are representatives of academia. Ten members are delegates from financial institutions, three of whom on behalf of cooperative banks and savings banks. The remaining members represent the other stakeholders.
Other European supervisory authorities
The EBA is the counterpart of the European Securities and Markets Authority (ESMA) in the securities sector and the European Insurance and Occupational Pensions Authority (EIOPA) in the insurance and pensions sector. Together, EBA, ESMA and EIOPA are referred to as the three European Supervisory Authorities (ESAs). The Joint Committee promotes cooperation and information exchange between the ESAs. It consists of the Chairpersons of the three Authorities and a number of observing members, including the Executive Directors of the ESAs, and representatives from the ESRB and the European Commission.