The Committee of European Banking Supervisors (CEBS) publishes the final text of its revised Guidelines on stress testing which takes into the account the results of the earlier public consultation which run from December 2009 to March 2010.

The EU wide stress test exercise of financial institutions, coordinated by the Committee of European Banking Supervisors (CEBS) has been carried out by 91 banks from 20 EU Member States. Two listed companies OTP Bank Plc. and FHB Mortgage Bank Plc. have represented Hungary in the test. Both banks’ results are sound and well above the threshold expected.

Following CEBS’s statements issued on 18 June and 7 July 20101, CEBS today provides information on the date and time for the publication of the results of the EU-wide stress test exercise.

Following its statement issued on 18 June 2010, CEBS provides further information on the EU-wide stress test exercise which is now being finalised by CEBS and the national supervisory authorities, in close cooperation with the ECB.

The Hungarian Financial Supervisory Authority is publishing its updated Enforcement Policy completed with its policy on supervisory fines in order to ensure the transparency of its imposition of supervisory fines on institutions under its supervision and in order to implement the measures and principles of its sanctioning policy, a policy which has already been published. The Enforcement Policy includes the principles the HFSA applies when imposing supervisory fines, the procedure and practice of the imposition of supervisory fines and the intervals (i.e. minimum and maximum amount) of supervisory fines to be used as guidelines.

The Hungarian Financial Supervisory Authority (“HFSA”) has conducted an investigation (market surveillance procedure) into certain spot HUF foreign exchange transactions undertaken by Deutsche Bank London on 15 October 2008 in relation to certain foreign exchange linked swap positions.  Following the close of the inquiry, HFSA fines Deutsche Bank London (“DBL”) (Winchester House 1 Great Winchester Street London EC2N 2 DB) to pay HUF 90,000,000 supervisory fine, and to reimburse all costs accrued in relation to the procedure. HFSA’s resolution can be contested by appealing to the Metropolitan Court of Budapest within thirty days.

The International Association of Insurance Supervisors (IAIS) today published the Guidance paper on treatment of non-regulated entities in group-wide supervision to support insurance supervisors worldwide to address some of the key regulatory gaps as observed from the global financial crisis and to minimise regulatory arbitrage opportunities.

In a report submitted today as technical advice to the European Institutions (Ref. CESR/10-088), CESR recommends the introduction of a pan-European disclosure regime for net short positions in shares. In the meantime, those CESR Members that already have powers to introduce a permanent disclosure regime, as elaborated in the report, will begin the process of implementing this regime. Those CESR Members who do not have the necessary legal powers will aim towards implementing this regime on a best efforts basis, until an EU regime is adopted.

Pursuant to Section III/3 of Appendix 2 of Act CXII of 1996 on Credit Institutions and Financial Enterprises “good business reputation” means the existence of the conditions that prove that the managers of the financial and payment institutions, as well as their owners with qualifying influence, are suitable for managing and owning the financial and payment institutions.

The Code of conduct on the principles of fair conduct by financial organizations engaged in retail lending (hereinafter referred to as: Code) came into force on 1st January 2010.
The institutions joined the Code shall fully comply with the principles of the Code during their activities of retail lending and leasing.

Appendix 1 is part of the guidelines for the Supervisory Review Process (SRP), in which document those exposures and high-risk portfolios are reviewed in the case of which capital surplus is required by the Supervisory Authority. Recommendations related to high-risk portfolios should be reviewed by the Authority at least once a year based on annual supervisory priorities and trends in environmental risks (Risk Outlook). HFSA has published its expectations of high-risk portfolios for 2009 based on  supervisory priorities for 2009 and recent risk outlook.

Today, CEIOPS has published an overview of legal requirements under the IORP Directive (2003/41/EC), with which a guest IORP operating a pension scheme in a host Member State must comply.  The overview is based on a selection of topics relating to the relevant national social and labor law provisions, investment restrictions and information requirements. 

The European Commission has adopted an important package of draft legislation today to significantly strengthen the supervision of the financial sector in Europe. The aim of these enhanced cooperative arrangements is to sustainably reinforce financial stability throughout the EU; to ensure that the same basic technical rules are applied and enforced consistently; to identify risks in the system at an early stage; and to be able to act together far more effectively in emergency situations and in resolving disagreements among supervisors. The legislation will create a new European Systemic Risk Board (ESRB) to detect risks to the financial system as a whole with a critical function to issue early risk warnings to be rapidly acted on. It will also set up a European System of Financial Supervisors (ESFS), composed of national supervisors and three new European Supervisory Authorities for the banking, securities and insurance and occupational pensions sectors.