BaFin s Supervisory Tasks an Overview

Transcription

1 BaFin s Supervisory Tasks an Overview

2 Your lecturer: Dr. Johannes Engels Pre-Examination at RWTH Aachen Examination at Köln University Lance Corporal at German Airforce Support Command Doctor-Degree at Köln University Trainee at Simonbank AG, Düsseldorf Advisor at Deutsche Verkehrs-Kreditbank, Frankfurt/ M Policy Officer in the Federal Banking Supervisory Office, Berlin Since 2001 Senior Policy Officer in the Federal Financial Supervisory Authority, Ffm. Since 2012 Lectureship at the University for Applied Sciences, Mainz Since 2014 Member of the steering committee in the European Supervisory Education Initiative Contact:

3 Content 1. BaFin a short flash 2. The German Banking Act as common supervisory basis between Bundesbank and BaFin 3. International co-operation between Bundesbank and BaFin in the European- and the worldwide supervisory level Auf dem Weg zur europäischen Bankenunion?

4 BaFin subjects of integrated financial supervision Approx. 2,500 employees Regulation of approx. - 1,850 credit institutions financial service institutions insurance undertakings - 30 pension funds - 80 investment companies leasing companies factoring institutions Bonn Frankfurt BA in Germany Seite 4

5 BaFin s structure President & Directorate Public Relation Office Internal Revision, Compliance General Administration 4 Cross Sectoral Departments Banking Supervision Directorate Licensing, revocation and limitations of operations of credit and financial services institutions Solvency supervision of credit and financial services institutions Risk management Insurance Supervision Directorate Licensing and revocation of insurance companies Solvency supervision of insurance companies Risk management Market Supervision Directorate Market surveillance: Insider supervision, transparency Investor protection: Supervision of rules of conduct by investment services enterprises and investment companies Licensing and supervision of collective investment schemes asset management

6 Banking supervision the internal organization Banking Supervision BA 1 Mayor banks and complex groups BA 2 Savings and mortgage banks BA 3 Private and spezialized banks BA 4 Co-operative banks BA 5 General policy Section BA 11 Section BA 21 Section BA 31 Section BA 41 Section BA 51 Section BA 12 Section BA 22 Section BA 32 Section BA 42 Section BA 52 Section BA 16 Section BA 26 Section BA 36 Section BA 47 Section BA Seite 6

7 German banking structure An overview to the German banking market Credit Institute Sum Of this: foreign banks Major banks 4 1 Regional commercial and private banks Branches coming outside ECR 30 Branches coming from ECR 70 Representative offices 130 Savings banks and landsbanks 430 Co-operative banks 1100 Banks with special tasks Page 7

8 German banking structure Page 8

9 Banking market structure in Germany 15% 37% Private Banks 48% Savings Banks and Landbanks (public sector) Cooperative Banks BA in Germany Seite 9

10 Content 1. BaFin a short flash 2. The German Banking Act as common supervisory basis between Bundesbank and BaFin 3. International co-operation between Bundesbank and BaFin in the European- and the worldwide supervisory level Auf dem Weg zur europäischen Bankenunion?

11 The development of the German banking supervisory system (1) (Re-)Enacting of Banking Act, 1962 Foundation of the FBSO as part of the Ministry of Economics One single banking supervision in Germany Additional supervision of building societies (since 1972) Shift to the Ministry of Finance (1973) BA in Germany Seite 11

12 The development of the German banking supervisory system (2) Single Financial Supervision, 2002 Single supervision entity (= Federal Financial Supervisory Authority BaFin) Conversion in a public institution apart from Ministry of Finance BA in Germany Seite 12

13 The development of the German banking supervisory system (3) Basel II amendments from 2007 on Change to a more qualitative supervision Change to more on-site supervision (MoU with Deutsche Bundesbank) BA in Germany Seite 13

14 The development of the German banking supervisory system (3a) BA in Germany Seite 14

15 The development of the German banking supervisory system (3b) BA in Germany Seite 15

16 The development of the German banking supervisory system (3c) BA in Germany Seite 16

17 The development of the German banking supervisory system (4) Basel III amendments from 2014 on Continuing of qualitative based supervision More TIER I Capital including capital conservation buffer and anti-cyclical buffer; less (instable) TIER II Capital BA in Germany Seite 17

18 Supervisory co-operation between BaFin and Bundesbank (5) Only some of possible juridical persons (like share holding company or limited company) No retail salesman Prohibition of non-banking services Presentation of a business plan Forwarded to BaFin and Bundesbank Additional information to Banking Union (ECB) Page 18

19 Supervisory co-operation between BaFin and Bundesbank (6) Minimum requirement of own capital ( 5 Mio.) Minimum requirement of two managers Managers must be qualified and honest Managers can only work for the credit institution Check of supervisory board Check of ownership Check of holding structure No check of the market! >>>>> Single License <<<<< Page 19

20 Supervisory Standards 1. Solvability 2. Liquidity 3. Large loan regulations 4. Overall banking management 5. Qualification of board of directors and others (see: MA Risk as qualitative supervision) BA in Germany Seite 20

21 Bundesbank and BaFin - Early Warning System Ab Page 21

22 Bundesbank and BaFin - Early Warning System Concrete supervision with BAKIS (1) BAKIS working group started in 1996, the system itself began to run one year later Aims of BAKIS economic ratios: - Quick assessment of a bank s general economic/ financial situation - Early detection of trends as an early warning system - Detection of risk accumulations - Observation of general developments Page 22

23 Bundesbank and BaFin - Early Warning System Concrete supervision with BAKIS (2) BAKIS has to fulfil in general: - A systematic analysis - Comparisons in time - Comparisons between groups But: absence of a warning signal does not mean releasing from surveillance! Page 23

24 Bundesbank and BaFin s sources of information Auditors Reports - Announcement of the auditors in case of danger Special Audits - by private auditing companies - by the Bundesbank - by BaFin itself (only in special cases) Announcements, statistics and reports by banks Meetings, discussions, visits BA in Germany Seite 24

25 Qualification of Board of Directors - Personal reliability - Professional qualification: - theoretical knowledge - managerial experience - experience in guidance of persons BA in Germany Seite 25

26 Measures and Sanctions Simple letter Serious letter Warning Money penalty (up to 5 Mio.) Demand for dismissal Prohibiting of loan granting of a certain amount Add-on to liable capital Moratorium Revoking of license BA in Germany Seite 26

27 Content 1. BaFin a short flash 2. The German Banking Act as common supervisory basis between Bundesbank and BaFin 3. International co-operation between Bundesbank and BaFin in the European- and the worldwide supervisory level Auf dem Weg zur europäischen Bankenunion?

28 European financial services supervision (1) International level European level National legislation (D) Basel recommendation Harmonization of EC Directives Convergence of supervisory practices BCBS CEBS/ EBA Decrees Minimum requirements New: Banking Union Interpretation Banking Supervision Seite 28

29 European financial services supervision (2) European Banking Union National bankingsuperv. ECB All banks in Euro-zone European Central Bank takes all decisions (Banking Union) The national banking supervisors have to inform and to support the Banking Union This support includes as well the preparation of decisions Auf dem Weg zur europäischen Bankenunion?

30 Worldwide co-operation (Different co-ordination levels) International level European level National level Degree of formality International cooperation of central banks 30

31 Thank you very much! Dr. Johannes Engels - Senior Policy Officer - Section technical co-operation Federal Financial Supervisory Authority (BaFin) Marie-Curie-Str Frankfurt/ Main, Germany Tel.: Fax: johannes.engels@bafin.de Seite 31