The European Central Bank announces the total fees of its prudential supervision duties that it will charge credit institutions in 2016.
29 april 2016
It is now a year and a half since the 4th November 2014 when the European Central Bank assumed full monitoring competences of European banks. The ECB gets into its second full year of control over the credit institutions under the framework of the Single Supervisory Mechanism, and its now time to set the expenses that these institutions must assume.
The European organisation has quantified the cost that the prudential supervision of the banking system in 2016 will entail at over €404 million, which shall be borne by monitored entities. This figure takes into account the surplus over the estimated amount for 2015, almost €19 million, since the total amount between salaries and infrastructure costs rises to €423 million.
The division is made in the following way: 88,4%, about €357 million, will be set aside for the supervision of 129 credit institutions considered as ‘significant’, while the remaining part (47 millions) will cover the expenditure for 3.200 ‘non significant’ institutions (here is the criteria used for determining whether an institution is significant or not). It is expected that this year the prudential supervision costs of the banking system will increase by 23% compared to 2015.
The definite number corresponds to “the sum of a minimum element for all entities, that represents a 10% of the total amount to be recovered, and a variable element for assigning the remaining 90% of expenses. The specific rates that must be paid by each entity will be known in 2016.
After its first year controlling and monitoring the European banking sector, the ECB has increased its number of recruited workers for its Banking Supervision section (check the internship offer in its Directorate General for Micro-Prudential Supervision III published a month ago). To be exact, the number of employees has increased by 160 full-time or equivalent jobs, and more recruitment is expected in 2017.
See also:
ECB press statement: “ECB fixes the full supervisory fees for 2016”
Banking Supervision Guide - European Central Bank (in English)
The Key Aspects of European Banks' new stress test
