Banking supervision glossary

A formal statement from the management body providing its assessment of the capital adequacy of the institution and explaining its main supporting arguments.

Capital Requirements Regulation and Directive: Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms (CRR) and Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD IV). The CRR/CRD IV package transposes the global standards on bank capital (the Basel III agreement) into EU law.

See capital adequacy statement (CAS)

See counterparty credit risk (CCR)

See countercyclical capital buffer (CCyB)

Common Equity Tier 1

Compliance and Governance Office

collective investment undertaking

See Court of Justice of the European Union (CJEU)

carbon dioxide

Centralised On-Site Inspections Division

Procedures which apply to both SIs and LSIs. The common procedures enable the ECB to apply the single European rulebook in a consistent way. Common procedures include: granting a banking licence to a new company or extending an initial licence; authorising an acquisition of a participation in an existing institution; withdrawing a banking licence. See also less significant institution (LSI), significant institution (SI)

Financial health checks which the ECB is required to carry out prior to assuming direct supervision over a credit institution. Comprehensive assessments help to ensure that the banks are adequately capitalised and can withstand possible financial shocks. The assessment comprises an asset quality review and a stress test.

common reporting

The opposite party in a financial transaction (e.g. any party transacting with a central or commercial bank).

The risk that, between the time a transaction is agreed and the time it is finally settled, the counterparty to that transaction will default, with the result that a loss is caused when the transaction is closed out or hedged with an outstanding positive transaction value that is not fully covered by collateral.

See Court of Justice of the European Union (CJEU)

The EU institution that rules on the interpretation and application of EU law and reviews the legality of acts of the EU institutions. It consists of the Court of Justice and the General Court.

Capital Requirements Directive

Capital Requirements Regulation

See Capital Requirements Regulation / Capital Requirements Directive (CRR/CRD IV)

credit valuation adjustment