AIB, BOI, third bank to be directly regulated by ECB

Scofflaw

AIB and Bank of Ireland and at least one more systemically important institution operating here will be regulated directly by the European Central Bank in Frankfurt when the new European banking supervisory regime comes into force, Minister for Finance Michael Noonan told the Oireachtas Committee on Finance, Public Expenditure and Reform yesterday.

When asked by Sinn Féin finance spokesman Pearse Doherty to identify which Irish banks would be directly regulated by Frankfurt, Mr Noonan said “AIB and Bank of Ireland will be two. We could have a number of bids on the table for the third.”

He said the third institution could be Ulster Bank, in spite of the fact that it is owned by Royal Bank of Scotland, which is regulated in the UK. It will come down to which banks are considered “systemically important”, he added.

Mr Noonan said the Central Bank of Ireland and the ECB would decide which Irish banks are directly regulated under the regime.

http://www.irishtimes.com/business/sectors/financial-services/ecb-to-directly-regulate-aib-and-bank-of-ireland-1.1451786

This is part of the proposed new European banking supervision system - AIB and BOI would be regulated by the ECB because they're systemic, not because they're under particular suspicion. Nor does this have anything to do with the troika, and it would be a permanent arrangement.

cordially,
Scofflaw

Mr.Micro

Scofflaw wrote: »

http://www.irishtimes.com/business/sectors/financial-services/ecb-to-directly-regulate-aib-and-bank-of-ireland-1.1451786

This is part of the proposed new European banking supervision system - AIB and BOI would be regulated by the ECB because they're systemic, not because they're under particular suspicion. Nor does this have anything to do with the troika, and it would be a permanent arrangement.

cordially,
Scofflaw

Probably a good idea. The Central Bank here, too close perhaps, to Government and whoever. Not knowing (apparently) about the Anglo tapes does not strike a chord of confidence IMO.

View

Scofflaw wrote: »

http://www.irishtimes.com/business/sectors/financial-services/ecb-to-directly-regulate-aib-and-bank-of-ireland-1.1451786

This is part of the proposed new European banking supervision system - AIB and BOI would be regulated by the ECB because they're systemic, not because they're under particular suspicion. Nor does this have anything to do with the troika, and it would be a permanent arrangement.

cordially,
Scofflaw

So had the new proposed system been in place 5 years ago the regulator of Anglo Irish would have our regulator not the ECB?

Doesn't sound like an improvement at all.

Those "power crazed Eurocrats" need to be a more expansive. :-)

antoobrien

Scofflaw wrote: »

AIB and BOI would be regulated by the ECB because they're systemic

It's interesting that PTSB has been left out of this, I wonder if it's because they are mainly a retail bank with very small business & corporate offerings?

Floppybits

It is probably for the best considering we are not too good at regulation.

serfboard

antoobrien wrote: »

It's interesting that PTSB has been left out of this, I wonder if it's because they are mainly a retail bank with very small business & corporate offerings?

SETF - small enough to fail

kennyb3

As always there is little to no detail. What will the regulation involve exactly?

antoobrien

kennyb3 wrote: »

As always there is little to no detail. What will the regulation involve exactly?

Capital ratios, liquidity rules, reporting rules, lending rules, codes of practice - the sort of things that regulators are supposed to look at.

I presume the quid pro quo will be access to a bank resolution fund (lets call it the Eurozone Bank Stability Fund).

kennyb3

antoobrien wrote: »

Capital ratios, liquidity rules, reporting rules, lending rules, codes of practice - the sort of things that regulators are supposed to look at.

Source?

antoobrien

kennyb3 wrote: »

Source?

That's the kind of things regulators (are supposed to) regulate. If you want to see more of what regulators do see this wiki article: http://en.wikipedia.org/wiki/Bank_regulation#General_principles_of_bank_regulation

The point of having a euro zone regulator is to make sure they all playing by the same rules, so that the likes of Halifax & RBS can't dump capital on markets like ours.

kennyb3

Wow, you really missed my point - I know what regulators are supposed to do. I was saying the devil is usually in the detail and it will be interesting to see exactly what regulation will be carried out.

antoobrien

kennyb3 wrote: »

Wow, you really missed my point - I know what regulators are supposed to do. I was saying the devil is usually in the detail and it will be interesting to see exactly what regulation will be carried out.

Wow you seem to have missed the point if the thread.

There are proposals that were mentioned to a dail committee. There won't be details until a formal position paper is published from Europe.

But it's easy enough to figure out which major topics will be regulated, seeing as some of them are covered under things like BASEL III and outside reporting regulations like SOX (though US these are not a bad idea).

WIZE

Does this mean if our banks fcuk up again it will fall on the ECB?

I think its great to have some professionals looking after this.

View

WIZE wrote: »

Does this mean if our banks fcuk up again it will fall on the ECB?

I think its great to have some professionals looking after this.

No it looks like that applies to the big 3 only.

For the others, we'll still "exercise our sovereignty" and bail them out based on past experience.

I can just see the complaints about this when it operates in practise. Hands up for volunteers to bail out a big 3 bank in, let's say, Finland in 10 years time...

kennyb3

antoobrien wrote: »

Wow you seem to have missed the point if the thread.

There are proposals that were mentioned to a dail committee. There won't be details until a formal position paper is published from Europe.

But it's easy enough to figure out which major topics will be regulated, seeing as some of them are covered under things like BASEL III and outside reporting regulations like SOX (though US these are not a bad idea).

I simply pointed out it will be interesting to know the detail - it's difficult to draw any conclusions until then.

You listed off a load of general tests - that's not detail.

As I said it will be interesting to see the detail and exactly what is involved (note future tense)

(Steps away from thread)

thebman

serfboard wrote: »

SETF - small enough to fail

Anyone not SETF is probably TBTE - To Big To Exist ...

They should break them up if they are that big a risk...

No better time than when we own them.