CONCLUSIONS OF THE FIRST MEETING OF THE CONSULTATIVE PANEL
HELD ON 7 OCTOBER 2004
Role of the Panel, working method and consultation process
The transparency of the process and the relevance of the panel are emphasized. Confidentiality of documents and discussions will be the exception to the rule of transparency. Generally, the conclusions of Panel meetings will be published at CEBS’ website
Members are involved in personal capacity. They are, however, also helping CEBS to disseminate knowledge about CEBS work, encourage participation in consultation, and gather views at the national level or from their own and fellow organisations on issues to be brought to the attention of CEBS.
Members asked to have a table explaining the position of CEBS in the architecture of EU Committees and institutions, to better place the Panel’s work.
It was decided that the Panel will be chaired by a member, while CEBS Chair will help steering the first meetings. Secretariat will be provided by CEBS. Documents will be circulated at least one week in advance of meetings. There are different views on the desirable frequency of meetings. It was decided that meetings might have to be more frequent in the setting up phase, but maybe less so at a later stage. The issue will be tackled again on the basis of the first experiences.
The Panel provided some assessment of the input received in the consultation on the draft statement on consultation practices (CP01). A call is made for open and transparent consultation. Formal consultation on CEBS papers is essential to allow everybody to provide input. More informal hearings at a preliminary stage of the process might be useful to collect technical input from market participants, addressing a limited number of technical questions.
The Consultative Panel may assist in selecting the appropriate participants in such technical meetings. CEBS should take into account the consultations already launched on similar topics by other bodies (Commission, CESR and CEIOPS), with a view to avoiding overlapping and confused outcomes. Also, a planning of consultations will be discussed and published, in order to facilitate the consulted organisations. Short time lines set by third parties for CEBS’ advice may have an impact on the time available for consultation. No formal weight will be attributed to input received in the consultation.
Priority areas for CEBS work
The Panel agreed that CEBS should concentrate on prudential issues, acknowledging that other topics which are also relevant for the integration of retail markets in the EU can not be addressed at this stage. The focus should mainly be on the implementation and enforcement of the new framework for capital adequacy of credit institutions and investment firms. A representative of consumers suggested that some topics of greater interest to consumers of financial services should also be addressed, for instance in the area of corporate governance.
The Panel was informed about the work streams presently active in CEBS. They highlighted as priority matters home-host issues (also with reference to the supervisory review process, the so-called Pillar 2), Pillar 2, the validation of Internal Ratings Based systems and of Advanced Measurement Approaches for general risk, and further elimination of unnecessary national discretions in the European directives. Accounting was also mentioned as a relevant area for CEBS work, in view of the reform of international accounting standards and its interaction with prudential requirements. Some members suggested devoting attention also to the so-called Pillar 3 of the new capital adequacy framework (market discipline), identifying the advantages and disadvantages of extensive disclosure of information. It was also proposed to work on issues related to the competitiveness of the EU banking sector, including factors driving to relocation of business outside the EU. As a general point, it was highlighted that CEBS should show awareness of the need to avoid excessive recourse to regulation and to rely as far as possible on self regulation. Coordination by CEBS with the other level 3 Committees (CESR and CEIOPS) was deemed important, in order to prevent duplication of consultations and other initiatives. Further input on priority areas for CEBS work might be provided via written procedure.
National Discretions
CEBS informed the Panel about the outcome of its work aimed at reducing national discretions in the capital requirements directive (CRD). The advice of CEBS was presented to the members, and will be published shortly on CEBS’ website. CEBS informed the members that further work will be conducted to reduce even more the scope for divergent implementation. Guidance was asked from the Panel. Panel members argued that the reduction in national discretions is a key objective for institutions operating on a cross-border basis and stressed that a more uniform framework within the EU should be a first step, to be followed by greater convergence with the USA. The Panel members were provided with a list of the national discretions and were asked to identify those that they would consider suitable for elimination, possibly highlighting the impact such discretions might have (also via anecdotal evidence). It was noted that many discretions are part of the Annexes of the CRD, as a result of which they can be revised more easily under the new Lamfalussy process.
Next meeting
The next meeting will be held in February 2005 in London.