Slovakia Central Bank Statement

Author: | Published: 5 Sep 2017
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In the context of the integration process for the European Central Bank's Single Supervisory Mechanism (SSM), the banking supervision function of Slovakia's central bank, the National Bank of Slovakia (NBS), has undergone certain changes in recent years. The function's organisation has been overhauled to make it more compatible with SSM requirements, with the most important changes being the separation of on-site inspections from off-site supervision and the differentiation between supervision of significant and less-significant banks.

The European-level process of harmonising SSM procedures and integrating different national competent authorities in the banking union's first pillar has seen significant progress in both legislative and methodological aspects. An important legislative step was the adoption of common rules on exercising the options and national discretions that the EU's Capital Requirements Regulation defines for significant banks under the SSM. These rules are increasingly being aligned for less significant banks, too. A key step on the methodological side was the adoption of the ECB's Guidance to banks on non-performing loans.

As part of the Supervisory Review and Evaluation Process (SREP), a new concept was introduced in the defining of Pillar 2 capital requirements, with the Pillar 2 Requirement (P2R) being distinguished from Pillar 2 Guidance (P2G).

In 2016 the European Banking Authority coordinated an EU-wide stress test of selected banks. The results of the exercise were fully incorporated into SREP processes and were used to determine the P2G levels. SSM processes are also being harmonised in respect of less significant banks. All these measures are significantly aiding progress in the understanding of banks' risk profiles and in the harmonisation of that understanding, which is particularly important for the development of the banking union.

As regards the second pillar of the European banking union – the Single Resolution Mechanism (SRM) – resolution planning for institutions falling within the remit of the Single Resolution Board (SRB) is carried out through Internal Resolution Teams that consist of representatives of the SRB and the national resolution authorities (NRAs). Resolution planning and the potential use of resolution powers and tools also entail a substantial number of challenging methodological and legal issues. These are being dealt with by dedicated committees, task forces and working groups that also consist of both SRB and NRAs experts. The first formal decisions on minimum requirements for own funds and eligible liabilities (MREL) for EU parent undertakings falling within the SRB's remit are expected to be issued at the end of 2017.

From April 2015, under an amendment to the Slovak Consumer Credit Act, the NBS assumed responsibility for the supervision of non-bank lenders. The NBS supervisory activities in this area extend also to non-bank providers of consumer loans. The NBS is responsible for consumer protection in all segments of the financial market, paying particular attention to current practices in the marketing of consumer loans, to the performance of creditworthiness checks on people applying for such loans, and, in the insurance sector, to claims settlement issues and unit-linked insurance. In addition, the NBS handles customer complaints against financial institutions falling under its supervision.

 


 

 

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