March 4 (Reuters) - The following is the full text of a
statement by bank suprvisors from Bulgaria, the Czech Republic,
Poland, Romania and Slovakia on public initiatives warning about
banking risks in the region.
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"Common Position of CEBS members representing the
supervisory authorities from CEE Member States (the Czech
Republic, Slovakia, Poland, Bulgaria and Romania) on the
warnings regarding the assessment of the CEE region and its
financial systems.
4 Mar 2009
The supervisory authorities of the following CEE Member
States: the Czech Republic, Slovakia, Poland, Romania and
Bulgaria express their concerns about the publicly announced
initiatives warning about the risks to the old EU Member States'
banks due to high exposures in CEE countries. Such initiatives
imply a high reputational risk not only for supervisory
authorities, but above all for the financial systems they
supervise. The published information accompanying these
initiatives is often simplified and misleading and could have
negative implications for banks operating in these countries.
Such self-fulfilling speculation totally disregards fundamental
economic developments in the CEE countries and creates
misperceptions that could inevitably be detrimental to both the
CEE region and Europe as a whole.
Each of the CEE Member States has its own specific economic
and financial situation and these countries do not constitute a
homogenous region. It is thus important first to distinguish
between the EU Member States and the non-EU countries and also
to clarify issues specific to particular countries or particular
banking groups.*
The supervisors of each CEE Member State are fully
responsible for the supervision of banks operating in their
countries and, together with central banks, also for the
financial stability of each country. EU banks' subsidiaries
operating in CEE Member States are also supervised on a
consolidated basis by the supervisory authority of the parent
company. Cooperation between the parent company supervisor and
subsidiary supervisors in colleges represents an important part
of supervisory work and should enable all relevant supervisors
to acquire information about the whole banking group.
The current EU legal arrangement allows the governments of
each EU country to respond adequately to the individual
situation in the financial sector of each Member State.
Governments are fully responsible for taking specific measures
tailored to the specific needs of each Member State's financial
system, including individual measures aimed at the subsidiaries
of EU parent companies. This responsibility is linked with the
assessment of the systemic importance of a bank for the
financial system in each country and national deposit guarantee
schemes, as subsidiaries of EU banks operating in the CEE Member
States hold large amounts of local deposits.
The supervisory authorities of the above mentioned CEE
Member States would strongly welcome it if future initiatives
assessing the risk of CEE countries and its possible impact on
European economies could respect the given roles and
responsibilities of the supervisors and governments of each
Member State, which include consideration of all possible
measures directed at preserving the stability of individual
financial institutions and each Member State's financial sector
as whole. However, it is important to stress that the
supervisory authorities of the CEE Member States support close
cooperation between regulators aimed at fostering a coordinated
approach to the current issues of the financial crisis.
* The only similarity is that banking groups operating in
the CEE region traditionally do business in these countries in a
very conservative manner, financing the real economy. The
liabilities of their subsidiaries consist of a large amount of
local deposits, which represent the major source for their
lending activities. Moreover, the CEE region has proved to be,
and will continue to be, the motor of growth and main profit
centre for all EU cross-border banking groups exposed to this
region."
