The Committee of European Banking Supervisors (CEBS) is publishing today its statement on the current crisis situation.
General
• Banking supervisors in Europe have further intensified contacts and joined forces to cope with the current crisis in the markets.
• EU banking supervisors are keeping a very close watch on developments, including in the inter-bank market and on banks’ individual exposures to counter-parties at risk, and are assessing the proposals put forward by the US authorities, on 18 September 2008, regarding banking regulation and supervision.
• Home-host supervisory co-operation within the EU has been intensified, especially in the context of cross-border operating banking groups.
• Building on existing means of information exchange and open communication, EU banking supervisors have been able to react swiftly on getting adequate information on bank’s exposures to known counterparties at risk. CEBS has facilitated the sharing of this information amongst all EEA supervisory authorities (e.g. through teleconferences) and discussion of possible supervisory responses.
• We will continue to use these channels and adapt them to changing circumstances.
Lehman Brothers
• Co-ordinated efforts have been undertaken to get insight into the exposures banks in the EU have to Lehman Brothers.
• Total aggregate exposures of EU banks to Lehman Brothers are less than 2% of the capital base of EU cross-border operating banks.
• This comprises secured and unsecured exposures, mainly in derivatives, securities, loans and credit lines.
• In our view, banks’ exposures to Lehman Brothers are manageable and mostly non-material, compared to the banks’ total assets and capital base.
• To have a quick insight in the legal structures and legal situation, CEBS is doing a snapshot of the structures of Lehman Brothers entities in Europe.
AIG
• With respect to EU banks’ exposures on AIG: given the US government support provided to AIG, EU bank supervisors view that this counterparty risk can be sufficiently mitigated for the moment.
Inter-bank market
• The proposals put forward by the US authorities on 18 September 2008 geared towards increasing confidence in the inter-bank market, are being studied.
• CEBS has established a Task Force to assess the US authorities’ proposals, focused on the possible consequences they may have for EU supervised entities.
Disclosures
• We see that in a number of EU countries banks have swiftly disclosed their individual exposures to Lehman Brothers and to some other counterparties.
• In our view, adequate disclosure by banks is crucial in this situation to improve market confidence.