Other major regulatory reforms
The establishment of the SSM for the Euro area is likely to have a significant impact on the
way that BaFin and the Bundesbank perform their banking supervision tasks. Commencing in
late 2014, the ECB will be responsible for the direct supervision of around 24 German
banking groups. BaFin and the Bundesbank will however, continue to be involved in the
supervision of these institutions as their staff members will be part of the “joint supervisory
teams” that the ECB is preparing to establish.
BaFin and Bundesbank will retain their
responsibilities with regard to the remaining approximately 1,800 banks, but will have to
supervise these in compliance with guidelines and general instructions set out by the ECB.
The German parliament has adopted the Act on Ringfencing and Recovery and Resolution
Planning for Credit Institutions and Financial Groups (Gesetz zur Abschirmung von Risiken
und zur Planung der Sanierung und Abwicklung von Kreditinstituten und Finanzgruppen),
which covers recovery and resolution planning for financial institutions as well as
resolvability assessments. Together with the Bank Restructuring Act, it serves as the key
framework for managing crises and restructuring financial institutions.
Germany has already implemented several major elements of the proposed EU Banking
Recovery and Resolution Directive, whereby potentially systemically important institutions
are called upon to develop and submit recovery plans to the national supervisory authorities.