 Felly, fel ydych yn fawr, a fawr. Fawr i'r fawr o'r cyfnodion ymlaen yma o'r ddegyn nhw ar gyfer o'r amserau o gwneud o'r ddegyn nhw'n gwneud, yma o'r fawr i'r bach ymlaen yma o'r cyfnodau. Yn ymlaen, yma yma byddwn i'r prydyniadau a fyddwch yma yn ymlaen yma. Yn ymlaen, yna ymlaen yn ymlaen yma, yn ymlaen yma. But before we begin, let me introduce the speakers that we have here this morning. To my right, it's Yuka Vesala, Director General in DG Micro-Podential Supervision 3. We have Roberto Urrena, Deputy Director General of Legal Services, in the middle, Estave Maya, Advisor in DG Micro-Podential Supervision 3, and on the far-right Giovanni Bassani, Senior Legal Counsel in Legal Services. So, without further ado, I think we start with the presentation, and then we're looking forward to the questions you might have. Yuka. Thank you very much, Rolf, and good morning also from my side, and welcome to this public hearing of the options and national discussions applied to the less significant institutions. As you know, we started the public consultation on the 3rd of November, and now we have this public hearing, and there are not so many today here, but I still hope that there is a very active participation, and then also there will be active submission of comments during the consultation, and we are here to respond to your questions. But I will start with the presentation, which is quite brief, and first to recall, we have had the major project inside the SSM to harmonise those options and discussions that are to the supervisor to decide. We cannot, obviously, change the options that are for the national lawmakers to decide, and this we consider has been a major achievement already. We noticed when we started the SSM, especially in the comprehensive assessment, that the starting point is more heterogeneous that we could have maybe thought beforehand, and the exercise of these options and national discussions that are in the EU regulation differently by the national authorities resulted in big differences in the measurement of banks' capital ratios, mainly because of the fact that the definitions of own funds were different across the different countries. So we have counted the total of 128 options and discussions that have been subject to this harmonisation for, first of all, for significant institutions, and this project has been finalised, and we consider that this has been already a major achievement, and this has harmonised considerably the way that the capital regulation is applied, and therefore also made the banks' capital ratios consistent across countries, which is also very much needed for the markets and the ability of markets to compare institutions from different countries. So the topic of our current project is to extend this harmonisation of the application of the options and discussions to less significant institutions, and we consider that this is also very much needed because we should have the level playing field inside the banking sector, the basic rules how capital ratios are calculated should be the same for big banks and the smaller banks, and also the other important prudential requirements relating to large exposures and liquidity and so on and so forth should be the same for all banks irrespective of the size. And then we also have the general mandate in the SSM to ensure that there is a consistent application of high supervisory standards. This is our general mandate regarding LSI's. The SSM is responsible for the supervisory system as a whole, while the national authorities carry out the supervision on a daily basis of the less significant institutions, and we consider that these options and national discresants and the harmonisation how they are used is one important step towards this objective that we have. We have also other supervisory standards that have been issued already, and this is part of this overall project to have consistent and high supervisory standards also for the LSI's. And then the same objectives that I mentioned for the SSIs to have comparable capital ratios in the first place is also important for LSI's and we can also then foster integration by having comparability across all banks in the markets. What is important here is as in all work that we carry out regarding LSI's that we apply the principle of proportionality. We should maybe say that we apply the practice of proportionality because we put the principle in practice. And this means that we are not taking the approach that has been agreed for the significant institutions directly to the LSI's, but we consider what is the appropriate approach and take into account the fact that the banks are smaller and there are many specificities in their business models. And we follow this approach also here. We conducted with the national authorities a thorough review of all these options one by one and then considered whether this would be applied as such to the LSI's or whether we should have a specific different approach. And this discussion was then based on this question about whether it's proportionate to apply the same approach or not. And then we then came up with this proposal how to apply the harmonisation of the O&Ds for LSI's. And we have basically three categories of the options and national discresions that you will find in the documentation. We have first of all the category of the options where the same approach was considered as appropriate for also LSI's. These are sort of basic hard rules for capital and liquidity, etc. where there's no reason to deviate from the same rules that should be applied by all banks. And we have here 50 options that fall into this category. Then we have the second category of the options and national discresions where we considered that we should have indeed the different approach, LSI specific approach, and we have eight options in that category. And then we have the final third category where we considered that we don't need to, at this stage, anymore harmonise these options either because there have been further developments or there are transitional arrangements that result in the exploration of these options or that there is further work that is needed. And we have 25 options in the category where the harmonisation was not considered needed anymore. And then 17 options that are waiting for further future developments. If I go a little bit more in detail, and then I think it's best to leave this for the discussion, so I will not go through each of the options one by one. It would take quite a long time. But to give a little bit of flavour of the different categories. So the first category where we apply the same approach as for the SIs and we have the 50 options, what I mentioned. Here we have indeed the sort of, if we can say, hard rules such as the definition of default, which is now based on the 90-day past due criterion which should be also used for LSIs in order to have a uniform definition for default and also the non-performing loans. And then a second important rule that we have now considered for the LSIs as well is the phase in of the major elements in the CT1. For instance, deferred tax assets, so these deferred tax assets VTH should be faced in from the capital base in the same way as in the case of SIs. So this is one example, one significant example where we consider that we should apply the same approach as for the SIs. And then one other example of this category which is highly significant for LSIs is the decision not to apply the possibility of asking banks to report for potential purposes using IFRS. And the banks are still allowed to report under the national accounting rules. In Germany and Austria, for instance, the use of national accounting rules is very widespread and practically all of the LSIs are not reporting under IFRS. So we will not change this state of affairs in the LSIs and not also in SIs or for SIs, but here then the treatment is equalised for SIs and LSIs. Then the second category of the O&Ds where we have a specific LSI approach. These are not very many, these are eight, but this can be quite significant because these relate to issues where due to proportionality it's not appropriate or relevant to ask the same approach as for the SIs. For instance, we are allowing the LSIs not to have a separate risk and audit committee of the board, but they can have only one committee that is combining these functions. So this is an example of this category of the options. And then there are also some options that relate to the fact that the direct supervisory responsibility for LSIs is still with the NCA's, so therefore we need to have coordination between ECB and NCA's which is not present for significant institutions and this can result in a different application of the national option. And then finally the category where we consider that we don't have to at this stage to have a harmonisation to reach the objectives of the exercise to have consistent supervision and the level playing field. We have first of all the options which are subject to transitional arrangements in 2017 and we consider that given the time that is needed to finalise the approach, it doesn't make sense to do it in this case because these options will expire at the end of next year in any case. So we leave those unharmonised. And then there are some cases where the IBA has progressed in providing harmonisation and we don't have to include those options into our package. And then finally, what I mentioned already, we have 17 options that are waiting for further work inside the ECB or at the level of the IBA. Regarding the legal implementation of this work we have in the consultation two draft legal acts. First of all we have a guideline which is a binding legal instrument according to the SSM regulation which the ECB can use for the supervision of LSIs according to its mandates. And this is an instrument that then harmonises the approach by the NCA's. And in this guideline we have those options that represent the hard rules what I mentioned or the other term that we use for these options are general rules that are applied to all banks. They are sort of regulatory options that are immediately then applicable to all institutions. And then we have a recommendation which is another instrument at our disposal which is non-binding to NCA's but of course we expect that the NCA's are following the recommendations. And these recommendations also give some flexibility to the NCA's how to implement their approach while keeping the objective there of common approach. And we use this instrument for those options that require the case-by-case assessment by the supervisors. So this is the logic behind the use of the two different legal instruments. And then finally the timeline we are here 17 November public hearing and then we still continue with the consultation until 5 January. So there is quite a lot of time for you to submit still comments after this hearing and other participants of the consultation. This is an open consultation and then after the ending of the consultation we will move forward to finalize the package taking into account the comments that have been received. And we have further details on how to submit the comments which can take place either by email or by traditional email. You have the further information in this website what is mentioned here. So I will stop here and open the floor for your possible comments. I hope you will have many comments and questions and I have the colleagues here to respond to your questions. So please, the floor is yours. Thank you. Martin Sutaskie with the German Savings Banks Association. Overall I'd say we appreciate the ECB's efforts to O&D's and to also harmonize the exercise of O&D's with regard to the SIs and now to the LSIs. With regard to the LSI O&D's we particularly support the draft on 76.3 CRD, the combination of the committees which is a practice that is often the case in German Savings Banks and also with regard to 24.1 the information that the ECB will not apply or request IFRS calculations from banks from LSIs. Let me say as a minor suggestion perhaps for future endeavors perhaps the ECB could consider to consult SIs and LSIs recommendations or rules in parallel to avoid having a situation where you are basically copying or applying the SIs exercise with regard to the LSIs. So perhaps that might be something to consider for future consultations depending on the topics depending on whether it's appropriate or not. Then I have a question with regard to O&D's where the ECB decided to leave the exercise to the discretion of the NCA. For example in the explanatory memorandum we noticed that for example on article 395.1 CRR the large exposure limit for very very small credit institution to have a higher visibility of the ECB's stance on this topic or was it a deliberate decision or is there any other reason behind this? Thank you. Okay so thank you Martin very much and also for the support. The point you raised about the process to have the SIs and LSIs consulted at the same time and until now we have been following in many of the topics, the sequence where we have first the discussion for the SIs in order to also to keep it more manageable and it has been of course the urgent task for the ECB to have a common approach for the supervision of the SIs that is conducted by the joint supervisor teams and we have a somewhat more relaxed timeline for the work on LSIs supervision and we have been following this plan here as well and also in other major projects like the work on the LSIs trip where we have then a longer timeline currently until 2018 to have this common system implemented and it also gives us the possibility to consider with some time the LSIs specific issues to be able to exercise the concept of proportionality and we need to then have this approach. So this is the way that we have been approaching the LSIs issues and I think it has worked quite well until now. Of course we take into account everything that has been said regarding the SIs when we then make the consultation and the proposals regarding LSIs issues. Regarding the large exposures I think here the flexibility that was left to the NCA relates first of all to the possibility to have a lower large exposure limit than 150 million because we have many very small LSIs and for them if the total balance sheet is not much larger than 150 million then the large exposure limit of 150 million doesn't make sense so we need to have flexibility here because we have many LSIs that are quite small so it's not so uncommon to have banks that have balance sheet less than 500 million or even significantly smaller than that so we need to have flexibility here. But Esther or the others if you have something more on this. So I mean when we decided on which options to include in the different instruments we always had a look to which extent in the O&D guide or the regulation their further specifications for the assessment are provided and where there's really a policy guidance that should be also followed by the NCA's and in the case of article 395 on the large exposure limits for SIs the ECB decided not to make use of its option for this option because it's just not relevant for the large institutions but we did not provide further guidance on how the NCA's should decide to make use of this possibility and therefore we did not include it in the package but this is also why we mentioned it in the explanatory memorandum because it's rather important and should be noticed and clear to everyone that NCA's will have the possibility to make use of this option. Yes, Inas Bicula, Italian Creative Co-operative Banks. Thank you very much for this hearing and opportunity to interact with our supervisor. So I would like somehow to find a relationship between this initiative and others, mainly the ADIS file on the site, ADIS, European Deposit Insurance Game. So my question is as following. Do you consider this ECB initiative as one of those intent to reduce risk in the banking union trying to make more harmonisation between less significant institution and significant institution so that the overall risk in the banking system may come more harmonised and so institution at the European level can go forward for example with the ADIS file. Thank you. Yes, thank you. Certainly the objective here is also to make sure that the bank's capitalisation is strengthened and we have adequately conservative approach to this exercise of the options. And in this regard I think it's quite important that we harmonise the use of the transitional arrangements, what I mentioned about deferred tax assets so that we have the same time now until 2019 for all banks in the SSM to face out or to be facing, sorry, the DTAs from the common equity tier one capital that this is then strengthening also the quality of capital. So certainly we have this objective of risk reduction as well. The other objective that I emphasised is the level playing field to have the same definitions so that is of course also very important. We don't have inside this consultation anything that relates to deposit insurance. Deposit insurance is also not a task for the ECB or the SSM to supervise. We have however been working on the article 137 which are the criteria in the CRR when an institutional protection scheme can be recognised where there is an arrangement to protect the solvency and liquidity of the member institutions and we have already consulted and finalised the common approach to this IPS. This is not deposit insurance but in some cases the IPS arrangements and IPS funds can also act as deposit insurance funds. So the issues are closely related but there our perspective is to harmonise the approach inside the SSM so that when there are new applications to have IPS they assess according to the common criteria and then there can be this regulatory privileges inside the IPS and that we have consistent monitoring whether the IPS continuously meets the criteria that exist and here the perspective is the protection of individual members against the capital liquidity issues and not deposit insurance but the issues are linked. So I hope this clarifies the landscape vis-a-vis IPS and deposit insurance. Sebastian Stodolka, European Savings and Retail Banking Group. Thank you very much for organising this hearing also from my end. You mentioned before that there are 17 ONDs that wait for further work and in this regard you mentioned the ECB and the EBA and my question would be whether you also consider it necessary that adaptions or reforms are made at level one? So let's say that principle European decision makers make some amendments maybe in the upcoming reform of the CRR and CRD4, would you appreciate that? Would you expect something in this regard? Thank you. This question is a bit maybe difficult to answer directly. I mean these options that we have been leaving for further work they of course are options that are for the supervisor to decide for the competent authority in the current regulation and we are working in terms of the current regulation and there are these 17 options where we don't have an approach in the SSM not for significant, not for LSIs and these options are then waiting for the further work. The options cover issues like liquidity waivers in terms of pillar two requirements, some issues regarding consolidation, then credit risk issues regarding the standardized approach and the IRB approach, some details there. Also of course then based on the current regulation and the options that are there regarding some of the details and then also CVA adjustments and market risk. So these are I would say rather detailed issues that can be relevant for some institutions but they are not major issues regarding the regulatory framework as there are others like that. I mean these options that require a follow-up they were already mentioned also in the package for the significant institutions in the guide. I mean for some of those we are just waiting for cases to first get a feeling on how to assess these individual decisions and the applications and others for example are also related to structural separation. So at the moment it's too early to do anything on this topic and as Yoka already mentioned there's also work of EBA going on for example related to the consolidation. So therefore we need to wait. Do you want to add anything? Perhaps just in terms of future amendments of the single rule book as you also mentioned the possibility to what we would like to see in the future package to be presented by the commission. Well of course for us more harmonisation would be better for sure because it would make our life easier in the sense that we don't have to apply 19 different national legislation but just one coming from the revelation so this should be also welcome. And as regards completely the case of ONDs for us it's important to whenever ONDs are recognised to have the possibility for the competent authorities to exercise these ONDs because this also gives us the possibility to harmonise at least within the SSM the practice that has been followed so far by competent authorities. Anybody else with a question? That doesn't seem to be the case. So we answered everything that you wanted to know. We thank you all for coming and have a safe trip home. Thank you very much and we look forward to the comments during further comments during the consultation. Thank you very much. Who still has safety comments from the webcast?