Notification template for Article 131 CRD - Global Systemically Important Institutions (G-SIIs)
Please send this template to
•notifications@esrb.europa.eu when notifying the ESRB;
•macropru.notifications@ecb.europa.eu when notifying the ECB;
•notifications@eba.europa.eu when notifying the EBA.
Emailing this template to the above-mentioned addresses constitutes an official notification, no further official letter is required. In order to facilitate the work of the notified authorities, please send the notification template in a format that allows electronically copying the information.
1. Notifying national authority | |
1.1 Name of the notifying au-thority | Banco de España (BdE) |
2. Description of the measure | |
2.1 Concerned institution(s) | Banco Santander S.A. (LEI code: 5493006QMFDDMYWIAM13; SSM code: ESSAN) |
2.2 Level of the buffer applied | What is the level of the buffer (in %) applied to the institution(s)? 1.0% in 2020. |
2.3 Names of subsidiaries | If any of the concerned institutions is a parent institution, please name the subsidiaries of the institu-tion notified as O-SIIs (please give name and LEI code). Three subsidiaries of the concerned institution were notified in 2017 as O-SIIs (for 2018) by the relevant national authorities:
|
3. Timing of the measure | |
3.1 Timing of the Decision | What is the date of the official decision? For SSM countries when notifying the ECB: provide the date when the decision referred to in Article 5 of the SSMR shall be taken. 20 November 2018. |
3.2 Timing of the Publication | What is the date of publication of the notified measure? Shortly after the official decision date (and no later than 30 November). |
3.3 Disclosure | Information about the communication strategy of the notified measure to the market. As in previous years, the institution designated as G-SII and its respective capital buffer require-ment will be announced via press statement on the BdE website. The information will be acces-sible under the following links: |
EN:https://www.bde.es/bde/en/areas/estabilidad/politica-macropr/ ES:https://www.bde.es/bde/es/areas/estabilidad/politica-macropr/
3.4 Timing of Application
What is the intended date of activation (i.e. as of which date shall the measure be applicable)?
1 January 2020 (applicable until 31 December 2020).
3.5 Phasing in
What is the intended timeline for the phase-in of the measure?
In accordance with the Article 162(5) of the Directive 2013/36/EU (CRD IV), and the Spanish le-gislation implementing this provision, the phase-in period of G-SII buffer requirements con-cludes on 31 December 2018. The G-SII buffer rate of 1.0% for Banco Santander, S.A. would therefore be fully applicable in 2020.
4.
Reason for activation of the G-SII buffer
4.1 Indicators used for desig-nation of the G-SII
(Article 131.2)
Please provide information on the following categories of indicators:
a. size of the group;
b. interconnectedness of the group, with the rest of the financial system;
c. substitutability of the services or the financial infrastructure provided by the group;
d. complexity of the group;
e. cross border activity of the group, including cross border activity between Member States and between a Member State and third countries
The G-SII designation is based on the outcome the G-SIB assessment exercise conducted by the Basel Committee on Banking Supervision (BCBS) in 2018, based on end-2017 data:
Categories of indicators
G-SII institution OverallscoreSize Interconn. Sub/Infra Complex. Cross-juris.
Banco Santander, S.A.
209
205
188
77
63
510
Note: All figures in basis points.
4.2 Scores and buckets (Article 131.2 and 131.9)
Please provide information on:
a. which overall score and bucket is attributed to each G-SII 209 bp and Bucket 1 (1.0%).
b. which score is attributed to each category See section 4.1 above.
c. what qualitative supervisory judgement has been taken into account?
None.
5.
Cross-border and cross-sector impact of the measure
5.1 Assess-ment of cross-border effects and the likely impact on the internal market
Assessment of the cross-border effects of the implementation of the measure.
(Recommenda-tion ESRB/2015/2)
a. Assessment of the spillover channels operating via risk adjustment and regulatory arbitrage. The relevant indicators provided in Chapter 11 of the ESRB Handbook on Operationalising Macro-prudential Policy in the Banking Sector1 can be used.
b. Assessment of:
o cross-border effects (leakages and regulatory arbitrage) of the implementation of meas-ure in your jurisdiction (inward spillovers); and
o cross-border effects on other Member States and on the Single Market of measure (out-ward spillovers).
The G-SII buffer requirement is intended to mitigate negative externalities, reduce potential moral hazard incentives and implicit subsidies (in terms of funding costs) and, ultimately, in-crease the designated institution's resilience.
Supported by empirical evidence and the experience gained since 2016 with the use of this macroprudential instrument, BdE's internal assessment of the G-SII buffer requirement sug-gests limited spillovers within the EU (particularly vis-à-vis those Member States hosting the institution's main subsidiaries). Likewise, other types of potential cross-border effects of the proposed measure are, a priori, expected to be contained. BdE remains committed to monitor developments in this area over the coming year in coordination with the relevant EU bodies and national authorities.
5.2 Assess-ment of leak-ages and regu-latory arbitrage within the noti-fying Member State
Referring to your country's specific characteristics, what is the scope for "leakages and regulatory arbi-trage" in your own jurisdiction (i.e., circumvention of the measure/leakages to other parts of the financial sector)?
The scope for potential leakages and regulatory arbitrage/circumvention is deemed to be very narrow, particularly on account of two key mitigating factors: (i) the macroprudential measure is directly targeted at the largest Spanish banking group (which accounts for around 40% of total assets of the country's banking sector), and (ii) the Spanish financial system is largely a bank-based one.
6.
Combinations and interactions with other measures
6.1 combina-tions between G-SII and O-SII buffers (Article 131.14)
In case both G-SII and O-SII criteria applied to the same institution at the consolidated level, which of the two buffers is the highest?
In 2019 the applicable SII buffer for Banco Santander, S.A. would be 1.0% (as a result of the two buffer rates being set at the same level).
As regards the applicable SII buffer in 2020, this will be contingent on the O-SII decision for that year (to be taken by the end of November 2019).
6.2 Combina-tions with SRB buffers (Article 131.14 + Article 133.5)
Are any of the institutions subject to a systemic risk buffer?
No.
If yes, please provide the following information:
1 Available on the ESRB's website atwww.esrb.europa.eu.
Not applicable. | |
6.3 Interaction with other measures | How does the buffer requirement interact with other measures addressing the same risk (e.g. with other supervisory measures)? Not applicable. The proposed buffer requirement is not part of a combination of macroprudential measures aimed to address the same risk. Besides, the countercyclical capital cuffer rate re-mains, at the time of this notification, at 0% for credit exposures located in Spain. |
7. Miscellaneous | |
7.1 Contact person(s) at notifying authority | Mailbox at the Macroprudential Analysis and Policy Unit of BdE:macropru@bde.es |
7.2 Any other relevant information | This notification was submitted on 19 October 2018. |
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ESRB - European Systemic Risk Board published this content on 16 January 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 16 January 2019 10:18:15 UTC
