ECB Annual Report on supervisory activities

5 <strong>Report</strong>ing on budgetary consumption
The SSM Regulation provides that the <strong>ECB</strong> must be able to dispose of adequate
resources to carry out its supervisory tasks effectively. These resources are financed
via a supervisory fee borne by the entities under <strong>ECB</strong> supervision.
The expenditure incurred for supervisory tasks is separately identifiable within the
<strong>ECB</strong>’s budget. 53 The budgetary authority of the <strong>ECB</strong> is vested in its Governing
Council. This body adopts the <strong>ECB</strong>’s annual budget following a proposal of the
Executive Board in consultation with the Chair and Vice-Chair of the Supervisory
Board for matters related to banking supervision. The Governing Council is assisted
by the Budget Committee (BUCOM), which consists of members from all the NCBs
of the Eurosystem and the <strong>ECB</strong>. BUCOM evaluates the <strong>ECB</strong>’s reports on budget
planning and monitoring and reports on them directly to the Governing Council.
The <strong>ECB</strong> anticipates expenditure growth in 2017 for the direct supervision of
significant institutions. This growth is related to the different activities foreseen in
“<strong>ECB</strong> Banking Supervision: SSM priorities 2017”, most notably the launch of the
targeted review of internal models (TRIM). Furthermore, as explained in Section 4.3,
in December 2016 the Governing Council took a decision to further increase the
number of <strong>ECB</strong> staff working on banking supervision as of 2017. By contrast, the
expenditure incurred for the indirect supervision of less significant institutions in 2017
is expected to remain at a level comparable to 2016.
5.1 Expenditure for 2016
The expenditure incurred by the <strong>ECB</strong> for the conduct of supervisory-related tasks
primarily consists of the direct expenses of the <strong>ECB</strong> Banking Supervision
Directorates General and the Secretariat to the Supervisory Board. The supervisory
function also relies on shared services provided by the existing business areas of the
<strong>ECB</strong>, including premises, human resources management, administrative services,
budgeting and controlling, accounting, legal, communication and translation services,
internal audit, statistical and information technology services.
Expenditure in 2016 was 10% lower
than estimated
In April 2016 the Governing Council adopted the <strong>ECB</strong> decision on the amount to be
recovered via supervisory fees in 2016. This decision set the estimate for annual
expenditure for banking supervisory tasks at €423.2 million. 54 At the end of 2016 the
<strong>ECB</strong>’s expenditure for supervisory tasks stood at €382.2 million. This was 10% less
than estimated, resulting in a surplus of €41.1 million compared with the expenditure
estimated for 2016. In accordance with the applicable <strong>ECB</strong> Regulation on
53
54
In accordance with Article 29 of the SSM Regulation.
Decision (EU) 2016/661 of the European Central Bank of 15 April 2016 on the total amount of annual
supervisory fees for 2016 (<strong>ECB</strong>/2016/7).
<strong>ECB</strong> <strong>Annual</strong> <strong>Report</strong> on supervisory activities 2016 − <strong>Report</strong>ing on budgetary consumption 65