(1)

The ultimate objective of macroprudential policy is to contribute to the safeguarding of the stability of the financial system as a whole, including by strengthening its resilience and decreasing the build-up of systemic risks.

(2)

Regulation (EU) No 1092/2010 acknowledges that the monitoring and assessment of potential systemic risks should be based on a broad set of relevant macroeconomic and micro-financial data and indicators and grants the European Systemic Risk Board (ESRB) access to all of the information necessary to perform its duties regarding macroprudential oversight, while preserving the confidentiality of that information as required.

(3)

Other authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks — including authorities which provide supporting analysis for macroprudential policy decisions — should also have access to the relevant set of data and indicators needed to perform their tasks. The information available to relevant authorities on branches in their territories differs across Member States in terms of scope and frequencies.

(4)

Recommendation ESRB/2011/3 of the European Systemic Risk Board (3) recommended, among other things, that Member States ensure that macroprudential authorities have the power to require and obtain in a timely fashion all national data and information relevant for the exercise of their tasks, including information from microprudential and securities market supervisors and information from outside the regulatory perimeter, as well as institution-specific information upon reasoned request and with adequate arrangements to ensure confidentiality. However, that Recommendation could not anticipate the various institutional arrangements relating to the setting and conduct of macroprudential policy that have evolved in the Member States since 2011. Therefore, it did not specifically address certain institutional arrangements that may be needed to ensure that macroprudential authorities have access to information that is considered to be necessary for the performance of their tasks, but that is not available to them.

(5)

Currently, the provision of cross-border financial services via branches of credit institutions having their head office in another Member State or in a third country represents an important part of the financial system in a number of Member States. In these Member States, certain branches (a) have been designated by competent authorities as significant in accordance with Article 51 of Directive 2013/36/EU of the European Parliament and of the Council (4); (b) meet the criteria of other systemically important institutions according to Article 131 of Directive 2013/36/EU; (c) provide critical functions on the basis of the European recovery and resolution framework; or (d) have a substantial market share in activities that are relevant from the financial stability perspective (together hereinafter referred to as ‘branches relevant for financial stability’). Union law does not provide a harmonised definition of branches relevant for financial stability. The provision of cross-border financial services via such branches is expected to increase in the future as financial integration within the European Union continues. Any authority entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks needs to be able to obtain certain basic information on all branches operating within its jurisdiction whose parent credit institutions have their head office in another Member State or in a third country. This is so that the authority can, as a minimum, assess whether these branches are relevant for financial stability in the country in which they operate. If the authority considers that is the case, it also needs to be able to obtain more detailed information on the activities of those branches.

(6)

Branches of credit institutions having their head office in another Member State or in a third country vary in size and importance. Where those branches are considered as relevant for financial stability in the country in which they operate there is a need to intensify the collaboration between the relevant authorities of the host and home Member States. In such cases, the exchange of selected information on parent institutions and the groups of which these branches form part is necessary to assess the potential amplifying impact that such branches might have during periods of excessive credit growth or in a crisis. The exchange of such selected information on those parent institutions and groups relating to own funds and leverage (including relevant buffer requirements), funding and liquidity risk, business strategy, and certain aspects of recovery plans is also necessary to ensure the effectiveness of macroprudential policy in the host Member States of such branches.

(7)

For these reasons, the provision of the set of information indicated in Recommendation C is considered necessary so that authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks are able to fulfil their mandates. Such information should be provided to those authorities upon a reasoned request, on a need-to-know basis, and within the limits of applicable Union and national law. Where those authorities need to obtain additional information in order to carry out their tasks and monitor or assess systemic risks or for purposes of developing new policy instruments, they should be provided with that additional information upon a reasoned request.

(8)

Neither Directive 2013/36/EU, in particular Article 56 thereof, nor Regulation (EU) No 575/2013 of the European Parliament and of the Council (5) preclude or create obstacles to the exchange of information between competent authorities and authorities or bodies charged with the responsibility for maintaining the stability of the financial system in Member States, in the discharge of their supervisory functions. Although Union law provides a framework for the exchange of information between relevant authorities for microprudential purposes, no framework exists for the exchange of information for macroprudential purposes.

(9)

Central banks collect information on branches of credit institutions having their head office in another Member State or in a third country. National central banks within the European System of Central Banks are encouraged to share such information with relevant authorities upon a reasoned request and on a need-to-know basis, as this is considered to be an effective way to facilitate the exercise of their tasks.

(10)

Well-designed arrangements governing the exchange of information on branches of credit institutions having their head office in another Member State or in a third country could assist authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks in carrying out their tasks. The use of memoranda of understanding would introduce standardisation and predictability, and create common ground as to what constitutes relevant information for the exercise of their tasks; memoranda of understanding are also considered to be an effective and efficient means of achieving the objective of establishing a culture of information sharing between the relevant authorities for macroprudential purposes. In this regard, the Nordic-Baltic Macroprudential Forum (6) and the most recent Memorandum of Understanding on Cooperation and Coordination on cross-border financial stability in the Nordic-Baltic region (7) could serve as reference points for a framework for close cooperation between the relevant authorities.

(11)

According to the principle of subsidiarity, the choice of relevant authority to collect information for financial stability or macroprudential purposes should be made by the relevant Member State.

(12)

Under Article 40 of Directive 2013/36/EU, competent authorities of the host Member States may require that all credit institutions having branches within their territories report to them periodically on their activities in those host Member States. This reporting may be required (i) for information and statistical purposes; (ii) for identifying branches as significant or (iii) for supervisory purposes entrusted to the host competent authority under Directive 2013/36/EU. It is not clear whether information collected under that Article can also be used for macroprudential purposes, as the relevant provision does not distinguish between microprudential and macroprudential supervision. Therefore, the European Commission should consider, within the review provided for in Article 513 of Regulation (EU) No 575/2013, whether Union law should be revised, namely to clarify that information from branches can also be collected for macroprudential purposes.

(13)

Branches of credit institutions having their head office in a third country are only subject to national law, and national laws in this matter are not harmonised by Union law. Following recent amendments to it by Directive (EU) 2019/878 of the European Parliament and of the Council (8), Article 47 of Directive 2013/36/EU specifies that a minimum set of information complemented by any other information considered necessary to enable comprehensive monitoring of the activities of the branch is to be collected by national competent authorities from branches of credit institutions having their head office in a third country. Such information should be shared with the authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks, where possible and appropriate. Within its review as provided for in Article 513 of Regulation (EU) No 575/2013 — and referred to above — as to whether Union law should be revised, namely to clarify that information from branches can also be collected for macroprudential purposes, the Commission should also consider the feasibility of data collection for such purposes from branches of credit institutions having their head office in a third country.

(14)

Pursuant to Council Regulation (EU) No 1024/2013 (9) (hereinafter the ‘SSM Regulation’), the ECB is the competent authority in relation to significant credit institutions in the context of the Single Supervisory Mechanism (SSM). As such, the ECB is responsible for supervising significant credit institutions and cooperates closely with the national competent authorities (NCAs) to carry out its tasks through joint supervisory teams, which comprise staff of the ECB and of the relevant national competent authorities. This allows for the smooth and prompt exchange of information relating to the supervised credit institutions. Authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks can request and obtain information from the ECB in its supervisory role on branches of credit institutions having their head office in another Member State.

(15)

Under Article 5(2) of the SSM Regulation, the ECB is responsible for assessing macroprudential measures adopted by national authorities and, when deemed necessary, for applying higher requirements for capital buffers and more stringent measures. In this regard, information on branches of credit institutions having their head office in another Member State or in a third country falls within the categories of information that may be necessary for the ECB to perform these tasks.

(16)

Competent authorities of Member States not participating in the SSM can cooperate and exchange information on supervised credit institutions in colleges of supervisors established pursuant to Articles 51 and 116 of Directive 2013/36/EU and which serve as vehicles for the coordination of supervisory tasks related to cross-border activities carried out by a credit institution.

(17)

This cross-border mechanism for sharing information is focused on the objectives of microprudential supervision. Consequently, Articles 51 and 116 of Directive 2013/36/EU and Commission Delegated Regulation (EU) 2016/98 (10), which sets out the general conditions for the functioning of colleges of supervisors, do not specifically envisage the participation of authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks in the relevant supervisory colleges. Nevertheless, the relevant competent authority of the home Member State is, in principle, able to invite other entities to participate in meetings of colleges of supervisors, provided that all college members agree. Certain information relating to the credit institution to which the branch belongs and which is shared in the colleges of supervisors can be relevant for macroprudential purposes. In this regard, competent authorities are encouraged to invite relevant authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks to be involved in the consideration of specific topics of macroprudential interest that are discussed in the colleges of supervisors. Explicitly including such relevant authorities in the colleges of supervisors as potential observers under Commission Delegated Regulation (EU) 2016/98 could provide greater certainty as to this role. Inviting representatives of macroprudential authorities to attend meetings of the colleges of supervisors to inform other participants about macroprudential risks or regulatory developments in macroprudential areas may also benefit discussions within the colleges of supervisors.

(18)

To ensure a consistent, efficient and effective approach to information exchange for the purposes of this Recommendation, the European Banking Authority (EBA), in cooperation with the ESRB, should develop guidelines for and monitor the exchange of information. In order to achieve a certain degree of convergence of information received from the relevant stakeholders, the EBA should establish a common framework for memoranda of understanding in cooperation with all relevant stakeholders.

(19)

This Recommendation is without prejudice to the monetary policy mandates of the central banks in the Union.

(20)

Recommendations of the ESRB are published after the addressees have been informed, and after the General Board has informed the Council of the European Union of its intention to do so and provided the Council with an opportunity to react,

1.

exchange information deemed necessary for the discharge of their tasks related to the adoption and/or activation of macroprudential policy measures or for other financial stability tasks, in an effective and efficient manner, as regards branches in a host Member State of credit institutions having their head office in another Member State or in a third country. The exchange of information should take place upon receipt of a reasoned request for information in relation to such branches — taking into account guidelines issued by the EBA in accordance with sub-recommendation C(1) — submitted by a relevant authority of the host Member State entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks. The information to be exchanged should be proportionate to the relevance of the branches to financial stability in the host Member State;

2.

establish memoranda of understanding or other forms of voluntary arrangements for cooperation and exchange of information among themselves — or with a relevant authority of a third country — regarding branches in the host Member State of credit institutions having their head office in another Member State or in a third country, where considered necessary and appropriate by all parties involved to facilitate the exchange of information.

1.

assess whether any impediments exist in Union legislation which prevent authorities entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks from having or obtaining the necessary information on branches to carry out those functions or fulfil those tasks;

2.

propose that Union legislation be amended to remove any such impediments, where the European Commission concludes, as a result of its assessment, that such impediments exist.

1.

issue guidelines in accordance with Recommendation A for the exchange of information between relevant authorities regarding branches of credit institutions having their head office in another Member State, which should include a list of information to be exchanged, as a minimum, on a need-to-know basis, and within the limits of applicable Union and national laws. The list should include, as a minimum, information items from each of the following categories

2.

monitor on a regular basis, in cooperation with the ESRB, the effectiveness and efficiency of the exchange of information between relevant authorities regarding branches of credit institutions having their head office in another Member State or in a third country.

(a)

‘branch’ means a place of business which forms a legally dependent part of a credit institution and which carries out directly all or some of the transactions inherent in the business of credit institutions;

(b)

‘credit institution’ means a credit institution as defined in point 1 of Article 4(1) of Regulation (EU) No 575/2013;

(c)

‘branch relevant for financial stability’ means a branch in a host Member State of a credit institution having its head office in another Member State or in a third country that meets any of the following criteria:

(d)

‘host Member State’ means host Member State as defined in point (44) of Article 4(1) of Regulation (EU) No 575/2013;

(e)

‘home Member State’ means home Member State as defined in point (43) of Article 4(1) of Regulation (EU) No 575/2013;

(f)

‘competent authority’ means a public authority or body officially recognised by national law, which is empowered by national law to supervise credit institutions as part of the supervisory system in operation in the Member State concerned, and the ECB under Article 9(1) of Regulation (EU) No 1024/2013;

(g)

‘memorandum of understanding’ means a voluntary arrangement setting forth how the relevant authorities intend to cooperate with one another and specifying the details of the data and information to be exchanged, in line with the applicable laws and regulations;

(h)

‘relevant authority’ means:

1.

2.

(a)

By 31 December 2020, the relevant authorities are requested to deliver to the ESRB and to the Council an interim report on the implementation of Recommendation A.

(b)

By 31 December 2024, the relevant authorities are requested to deliver to the ESRB and to the Council a final report on the implementation of Recommendation A, taking into account the potential changes to national and EU law and to the EBA guidelines.

1.

2.