Dear European Central Bank,

Under the right of access to documents in the EU treaties, as developed in Regulation 1049/2001, I am requesting documents which contain the following information regarding the ECB's recent contribution on Brexit and the EU banking sector here:
https://www.bankingsupervision.europa.eu...

- The contribution notes: "The TOMs agreed with the ECB back in 2018 envisaged a relocation of assets from the UK to the EU banking union for a total of around €1.2 trillion"

What is the ECB's latest estimate for the volume of assets that have been relocated?

- The contribution notes: "Banks were granted sufficiently long transition periods for the relocation"

What was the shortest and longest time respectively granted to banks for transition.

- "Taking a sample of nine of the biggest international banks, assets booked on the balance sheet of legal entities established in the euro area increased from around €275 billion to more than €1.3 trillion at the end of the first quarter of 2022, representing an almost fivefold increase."

Please provide a breakdown of the nature of these assets, and the fewest and most held by any of the banks in the sample.

- "Following ongoing dialogues with the Joint Supervisory Teams (JSTs), composed of staff from the ECB and the national supervisory authorities, the boards are now closer to the average size of all banks under European banking supervision, and the number of independent directors has increased accordingly."

What is the current difference in average board size between all banks under European banking supervision and third parties? What has been the increase in the number of independent directors? Does the ECB have an estimate for how many directors are "duel hatting"?

- "Those with more scope for improvement are in intense dialogue with the responsible JSTs regarding improvements to their governance arrangements."

How many remain in dialogue as at the time of answering this request?

- "For all exposures to counterparties in a third country, including the UK, a decision will now be made on a case-by-case basis, following an application from the supervised entity."

How many requests have been received and how many have been rejected?

- "At the time of writing, our teams are in a dialogue with individual banks on draft decisions, which should give our supervisors a complete picture of the business impact of the requirements."

How many drafts had been completed by end of 2022?

Yours faithfully,

Justin Cash

ECB Information, Banque centrale européenne

Dear Mr Cash,

We acknowledge receipt of your email of 02/02/2023 and would like to
confirm you that your request has been forwarded to the relevant experts
who will follow up as soon as possible.

Yours sincerely,

Public Communication
EUROPEAN CENTRAL BANK
+49 69 1344 1300
[1][email address]
[2]www.ecb.europa.eu
[3]www.bankingsupervision.europa.eu
[4]www.youtube.com/ecbeuro
[5]twitter.com/ecb
[6]www.linkedin.com/company/european-central-bank
[7]www.instagram.com/europeancentralbank

══════════════════════════════════════════════════════════════════════════

From: Justin Cash

Sent: Thursday, 02 February 2023 12:02:06 (UTC+01:00) Amsterdam, Berlin,
Bern, Rome, Stockholm, Vienna

To: [8][email address]

Subject: [EXT] access to documents request - Brexit and the EU banking
sector

 

Dear European Central Bank,

 

 

 

Under the right of access to documents in the EU treaties, as developed in
Regulation 1049/2001, I am requesting documents which contain the
following information regarding the ECB's recent contribution on Brexit
and the EU banking sector here:

 

[9]https://www.bankingsupervision.europa.eu...

 

 

 

- The contribution notes: "The TOMs agreed with the ECB back in 2018
envisaged a relocation of assets from the UK to the EU banking union for a
total of around €1.2 trillion"

 

 

 

What is the ECB's latest estimate for the volume of assets that have been
relocated?

 

 

 

- The contribution notes: "Banks were granted sufficiently long transition
periods for the relocation"

 

 

 

What was the shortest and longest time respectively granted to banks for
transition.

 

 

 

- "Taking a sample of nine of the biggest international banks, assets
booked on the balance sheet of legal entities established in the euro area
increased from around €275 billion to more than €1.3 trillion at the end
of the first quarter of 2022, representing an almost fivefold increase."

 

 

 

Please provide a breakdown of the nature of these assets, and the fewest
and most held by any of the banks in the sample.

 

 

 

- "Following ongoing dialogues with the Joint Supervisory Teams (JSTs),
composed of staff from the ECB and the national supervisory authorities,
the boards are now closer to the average size of all banks under European
banking supervision, and the number of independent directors has increased
accordingly."

 

 

 

What is the current difference in average board size between all banks
under European banking supervision and third parties? What has been the
increase in the number of independent directors? Does the ECB have an
estimate for how many directors are "duel hatting"?

 

 

 

- "Those with more scope for improvement are in intense dialogue with the
responsible JSTs regarding improvements to their governance arrangements."

 

 

 

How many remain in dialogue as at the time of answering this request?

 

 

 

- "For all exposures to counterparties in a third country, including the
UK, a decision will now be made on a case-by-case basis, following an
application from the supervised entity."

 

 

 

How many requests have been received and how many have been rejected?

 

 

 

- "At the time of writing, our teams are in a dialogue with individual
banks on draft decisions, which should give our supervisors a complete
picture of the business impact of the requirements."

 

 

 

How many drafts had been completed by end of 2022?

 

 

 

Yours faithfully,

 

 

 

Justin Cash

References

Visible links
1. http://[email address]/
2. http://www.ecb.europa.eu/
3. http://www.bankingsupervision.europa.eu/
4. http://www.youtube.com/ecbeuro
5. https://twitter.com/ecb
6. http://www.linkedin.com/company/european...
7. https://www.instagram.com/europeancentra...
8. mailto:[email address]
9. https://www.bankingsupervision.europa.eu...

ECB Information, Banque centrale européenne

Dear Mr Cash,

Thank you for your interest in the European Central Bank (ECB).

With reference to the above mentioned request, please find here below the
answers of our experts to your questions:

- What is the ECB's latest estimate for the volume of assets that have
been relocated?

The assets of the largest international banks relocated to the EU and
directly supervised by the ECB amount to about EUR 1.6trn by end of 2022.

- What was the shortest and longest time respectively granted to banks for
transition.

The ECB invited incoming institutions to develop a Target Operating Model
(TOM) well ahead of the UK’s withdrawal from the EU, following the ECB’s
‘no empty shell’ policy. The indicative timelines to complete the TOMs
were strongly dependent on such institutions’ specific situations, notably
considering their structure in the EU, including relevant staff and the
categories of assets to onshore.  They could also vary for a single
institution depending on the trading desk to relocate. Moreover, due to
the past years’ macroeconomic environment, notably the COVID19 outbreak,
adjustments to the timelines were performed, ensuring that concerned
institutions had sound risk management arrangements in place to manage
their relocated business commensurate with the risks they originate. In
addition, as a complement to TOMs, the ECB launched its desk-mapping
review to ensure that (i) such institutions made sufficient progress in
ensuring adequate local trading presence and risk management capabilities
in their newly established entities in the EU, and (ii) to provide
potential instructions to institutions to complete their TOMs. The DMR
decisions will be issued to the institutions in the course of 2023 and
could therefore adjust TOMs’ requirements and the timelines associated.
Overall, TOMs are not static models and will keep on evolving over time,
notably considering that those are not the end of the ECB’s supervisory
scrutiny of such institutions’ post-Brexit operating models.

- Please provide a breakdown of the nature of these assets, and the fewest
and most held by any of the banks in the sample.

The size of international banks, which have been relocated to the EU upon
Brexit and are directly supervised by the ECB, ranges from around EUR 38bn
up to EUR 436bn by end of 2022. A breakdown of the nature of the assets is
publicly available in the institutions’ financial statements and
disclosure.

- What is the current difference in average board size between all banks
under European banking supervision and third parties? What has been the
increase in the number of independent directors? Does the ECB have an
estimate for how many directors are "duel hatting"?

The average size of Management Board in a supervisory function (MBSF) is
cc. 8 members for host banks while for all the SSM banks is cc. 11. The
Brexit restructuring mostly led to the set-up of new entities, where a
corresponding supervisory board was only established (or at least
materially restructured). Therefore, almost all of the current independent
Board members are attributable to the Brexit-related discussions with the
supervisor. The reduction of dual hatted positions has been gradual in the
post Brexit period. Each case of dual hatting in the MBSF is subject to
dedicated assessment by the JSTs during ongoing supervision.

- How many remain in dialogue as at the time of answering this request?

Presence of Independent board members within Management Board in its
Supervisory Function (MBSF) is part of best supervisory practices and high
governance standards. Each JST engages separately with each Significant
Institution to assess collective suitability and effectiveness of MBSF and
suggests corrective actions through ongoing supervision to ensure level
playing field and reach best practices. The number of JSTs in intense
dialogue to this topic has significantly decreased due to the banks’
recent and wider-spread adoptions of best practices.

- How many requests have been received and how many have been rejected?

All banks in scope have submitted applications. The applications address
various dimensions, such as set of legal entities to be covered, type of
exposures to be covered, percentage of exposures to be covered, time
horizon etc. Exemptions were granted specifying the aforementioned
dimensions, there was no full rejection of an application. It should be
noted that applications need to be assessed against applicable national
regulation which may differ across the different entities.

- How many drafts had been completed by end of 2022?

Throughout 2022, an active dialogue with all relevant stakeholders has
been ongoing. Following a harmonised timeline, draft decisions for all
concerned significant institutions are currently about to be released to
the formal decision making process with an intended notification in the
next months.   

Yours sincerely,

Anna Marzo on behalf of the relevant experts

Public Communication
EUROPEAN CENTRAL BANK
+49 69 1344 1300
[1][email address]
[2]www.ecb.europa.eu
[3]www.bankingsupervision.europa.eu
[4]www.youtube.com/ecbeuro
[5]twitter.com/ecb
[6]www.linkedin.com/company/european-central-bank
[7]www.instagram.com/europeancentralbank

══════════════════════════════════════════════════════════════════════════

From: Justin Cash

Sent: Thursday, 02 February 2023 12:02:06 (UTC+01:00) Amsterdam, Berlin,
Bern, Rome, Stockholm, Vienna

To: [8][email address]

Subject: [EXT] access to documents request - Brexit and the EU banking
sector

Dear European Central Bank,

Under the right of access to documents in the EU treaties, as developed in
Regulation 1049/2001, I am requesting documents which contain the
following information regarding the ECB's recent contribution on Brexit
and the EU banking sector here:

 [9]https://www.bankingsupervision.europa.eu...

 - The contribution notes: "The TOMs agreed with the ECB back in 2018
envisaged a relocation of assets from the UK to the EU banking union for a
total of around €1.2 trillion"

 What is the ECB's latest estimate for the volume of assets that have been
relocated?

 - The contribution notes: "Banks were granted sufficiently long
transition periods for the relocation"

 What was the shortest and longest time respectively granted to banks for
transition.

 - "Taking a sample of nine of the biggest international banks, assets
booked on the balance sheet of legal entities established in the euro area
increased from around €275 billion to more than €1.3 trillion at the end
of the first quarter of 2022, representing an almost fivefold increase."

 Please provide a breakdown of the nature of these assets, and the fewest
and most held by any of the banks in the sample.

 - "Following ongoing dialogues with the Joint Supervisory Teams (JSTs),
composed of staff from the ECB and the national supervisory authorities,
the boards are now closer to the average size of all banks under European
banking supervision, and the number of independent directors has increased
accordingly."

 What is the current difference in average board size between all banks
under European banking supervision and third parties? What has been the
increase in the number of independent directors? Does the ECB have an
estimate for how many directors are "duel hatting"?

 - "Those with more scope for improvement are in intense dialogue with the
responsible JSTs regarding improvements to their governance arrangements."

 How many remain in dialogue as at the time of answering this request?

 - "For all exposures to counterparties in a third country, including the
UK, a decision will now be made on a case-by-case basis, following an
application from the supervised entity."

 How many requests have been received and how many have been rejected?

 - "At the time of writing, our teams are in a dialogue with individual
banks on draft decisions, which should give our supervisors a complete
picture of the business impact of the requirements."

 How many drafts had been completed by end of 2022?

 Yours faithfully,

 Justin Cash

References

Visible links
1. http://[email address]/
2. http://www.ecb.europa.eu/
3. http://www.bankingsupervision.europa.eu/
4. http://www.youtube.com/ecbeuro
5. https://twitter.com/ecb
6. http://www.linkedin.com/company/european...
7. https://www.instagram.com/europeancentra...
8. mailto:[email address]
9. https://www.bankingsupervision.europa.eu...