ECB Annual Report on supervisory activities

In 2016 the sanctioning
proceedings launched by the <strong>ECB</strong>
significantly increased
42
Enforcement and
sanctioning proceedings
launched by the <strong>ECB</strong> in
2016
During the initial phase of European banking supervision, the focus was mainly on
gaining knowledge of the prudential situation of the supervised entities (only four
proceedings were initiated in 2015, of which two were also completed in 2015). In
the course of 2016, the <strong>ECB</strong> launched 41 sanctioning proceedings and one
enforcement proceeding which were related to suspected breaches committed by 36
significant supervised entities.
Taking into account two proceedings that were ongoing at end-2015, the <strong>ECB</strong>
handled 44 proceedings in 2016, 42 of them regarding sanctions and two related to
enforcement measures (see Table 6).
Table 6
<strong>ECB</strong> enforcement and sanctioning activity in 2016
Sanctioning
proceedings
Enforcement
proceedings
Total
Ongoing proceedings at year-end 2015 1 1 2
Proceedings initiated during 2016 41 1 42
Proceedings handled during 2016 42 2 44
of which proceedings closed 5 1 6
of which <strong>ECB</strong> requests addressed to NCAs to open proceedings 3 - 3
of which ongoing proceedings at year-end 2016 34 1 35
Altogether, 30 out of the 42 sanctioning proceedings handled in 2016 relate to
suspected breaches of directly applicable EU law (<strong>ECB</strong> decisions and regulations
included). These proceedings concern 26 significant supervised entities and relate to
the areas of own funds, reporting, public disclosure, liquidity and large exposures.
Two of the proceedings were closed during 2016, owing mainly to the absence of a
legal basis for imposing sanctions in the specific cases at hand. The investigation of
the other alleged breaches is ongoing.
The remaining 12 out of the 42 sanctioning proceedings are related to suspected
breaches of national law transposing CRD IV provisions and concern significant
supervised entities or natural persons. These proceedings involve suspected
breaches with regard to governance, including internal control mechanisms,
management body functions and remuneration. Three of these proceedings were
closed during 2016 owing to the non-materiality of the suspected breaches. During
2016, the <strong>ECB</strong> also addressed three requests to NCAs to open sanctioning
proceedings within the remit of their national competences.
The smooth cooperation between
the <strong>ECB</strong> and the NCAs is a key
element in the exercise of the
<strong>ECB</strong>’s enforcement and sanctioning
powers
The two enforcement proceedings handled in 2016 concerned a suspected breach of
national remuneration rules and non-compliance with an <strong>ECB</strong> supervisory decision.
One of the proceedings was closed in 2016 owing to the absence of a legal basis for
imposing effective enforcement measures in that specific case, while the other is
ongoing.
A complete breakdown by area of infringement of the suspected breaches subject to
the enforcement and sanctioning proceedings handled in 2016 by the <strong>ECB</strong> is
displayed in Chart 5.
<strong>ECB</strong> <strong>Annual</strong> <strong>Report</strong> on supervisory activities 2016 − Authorisations, enforcement and
sanctioning proceedings 39