I trust that this agreement, once it is finally approved by the ECB, may be implemented in the opening months of 2016 and that, in any event, future revisions of European legislation will envisage less room for discretion on the part of the Member States, so that the singleness of the relevant legal framework for banking activity throughout the EU may become firmly anchored. To wrap up this first part of my speech, allow me to highlight certain relevant decisions taken by the Supervisory Board during this first year. Among the most important are those relating to the Supervisory Review and Evaluation Process (SREP), which has for the first time been carried out with a common methodology for all SSM banks. This process, which includes both quantitative and qualitative aspects, determines the risk profile of each significant institution, the sufficiency of its liquidity and solvency in terms of this profile and, finally, it sets the minimum capital levels to be maintained. The decisions on capital, the adoption of which for 2016 will be shortly formalised, will, for all the SSM’s significant institutions, entail average capital requirements somewhat higher than those of the previous year: around 30 basis points (bp), rising to 50 bp if the impact of the phasing-in of the capital buffers envisaged in European legislation is taken into account.
Likewise, to achieve greater consistency in the regulatory framework, it has also been necessary to review the national application of the various options permitted under European regulations. European solvency regulations – namely the Directive and Regulation on capital requirements – confer some degree of discretion upon Member States and national supervisors in the implementation of specific regulatory aspects. Such aspects include the timetable for the progressive adoption of new solvency standards and the granting of exceptions in respect of compliance with certain prudential requirements. This degree of national flexibility had to be accepted at the time by European legislators in the complex Directive and Regulation negotiations. Naturally, the fact such a diversity of rules are in place hampers supervisory action and prevents the homogenous treatment of banks based on their objective position. Accordingly, in recent months, the SSM Supervisory Board has worked intensely in this field. Their efforts have seen a preliminary agreement allowing a common approach to be adopted in relation to the application of these “national options and discretions” in the hands of the supervisory authorities. The terms of this agreement are now being subjected to public consultation, a process which will finalise on 16 December.