{"id":337,"date":"2015-05-05T00:00:00","date_gmt":"2015-05-05T00:00:00","guid":{"rendered":"https:\/\/www.fbf.fr\/en\/2015\/05\/05\/a-new-regulatory-framework\/"},"modified":"2021-11-02T13:39:40","modified_gmt":"2021-11-02T11:39:40","slug":"a-new-regulatory-framework","status":"publish","type":"post","link":"https:\/\/fbf.fr\/en\/a-new-regulatory-framework\/","title":{"rendered":"A new regulatory framework"},"content":{"rendered":"<!--wp:heading -->Three-Pillar architecture<!-- \/wp:post-content -->\n<!-- wp:paragraph -->\n<ul style=\"margin-left: 0.20in;list-style-type: disc;margin-top: 0;margin-bottom: 0\">\n \t<li><b>Single Banking Supervision<\/b><\/li>\n<\/ul>\nThe Single Supervisory Mechanism (SSM) places the European Central Bank (ECB) as the central prudential supervisor of approximately 6,000 financial institutions in the eurozone. The ECB directly supervises the 120 largest banks, including 10 French banks, while the national supervisors continue to monitor the remaining banks.\n\nThis integrated system is based on a complete and detailed set of uniform prudential rules with which all European banks must comply (Single Rulebook). It is a guarantee of quality and independence.\n\nThe setting up of this first pillar of the banking union was preceded by an unprecedented exercise led by the ECB and the European Banking Authority (EBA): asset quality review and stress testing. The results, published on 26 October 2014, confirmed the financial strength of French banks, underpinned by rigorous risk management and a universal and diversified banking model. This exercise, conducted on an unprecedented scale, provided the transparency needed to encourage investor confidence in the stability of the eurozone&#8217;s banking sector.\n<ul style=\"margin-left: 0.20in;list-style-type: disc;margin-top: 0;margin-bottom: 0\">\n \t<li><b>Single Resolution Mechanism (SRM)<\/b><\/li>\n<\/ul>\nThe second pillar of the banking union aims at setting up a framework to ensure an orderly resolution of failing banks with minimal costs for taxpayers. It includes a Single Resolution Board (SRB), to be instituted in January 2015, and a Single Resolution Fund (SRF), to become operational in January 2016.\n\nThe single resolution fund will be set up progressively over a transitional period of 8 years as of 1 January 2016. It will reach an amount equivalent to 1% of guaranteed deposits for all institutions subject to the SRM, in other words 55 billion euros, according to the measures adopted in 2014.\n\nThe contribution of French banks is estimated at 15.4 billion euros, representing 28% of the target amount of the fund. This amount does not appear to be in line with the level of risk represented by the French banking sector. Technical measures still need to be adopted to specify the detailed terms of the single fund, particularly the treatment of intra group loans and exposure to derivatives.\n\nThe SRM completes the pan-European system instituted by the Directive of 15 May 2014 on the recovery and resolution of failing credit institutions (BRRD).\n<ul style=\"margin-left: 0.20in;list-style-type: disc;margin-top: 0;margin-bottom: 0\">\n \t<li><b>Deposit Guarantee Scheme<\/b><\/li>\n<\/ul>\nAs the setting up of a single deposit guarantee scheme not having been taken, the third pillar consists of an harmonised level of deposit protection in each country (EUR 100,000 per depositor \/ per bank). By 2015, the transposition of the Directive of 16 April 2014 (referred to as the DGS Directive) will consolidate this mechanism:\n\n&#8211; the national deposit guarantee fund must be funded ex ante up to 0.8% of the deposits covered (or 0.5% in some cases) by 2024,\n\n&#8211; the repayment period will be gradually reduced to 7 working days should a credit institution fail.\n\n<!-- \/wp:paragraph -->","protected":false},"excerpt":{"rendered":"<p>Three-Pillar architecture Single Banking Supervision The Single Supervisory Mechanism (SSM) places the European Central Bank (ECB) as the central prudential supervisor of approximately 6,000 financial institutions in the eurozone. The ECB directly supervises the 120 largest banks, including 10 French banks, while the national supervisors continue to monitor the remaining banks. This integrated system is [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","views":184,"viewed_at":"1778197341"},"categories":[603,595],"tags":[],"class_list":["post-337","post","type-post","status-publish","format-standard","hentry","category-europe-and-international","category-french-banking-industry"],"yoast_head":"<title>A new regulatory framework - Europe and International - The French Banking Federation (FBF)<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fbf.fr\/en\/a-new-regulatory-framework\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A new regulatory framework - Europe and International - The French Banking Federation (FBF)\" \/>\n<meta property=\"og:description\" content=\"Three-Pillar architecture Single Banking Supervision The Single Supervisory Mechanism (SSM) places the European Central Bank (ECB) as the central prudential supervisor of approximately 6,000 financial institutions in the eurozone. The ECB directly supervises the 120 largest banks, including 10 French banks, while the national supervisors continue to monitor the remaining banks. 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