CRD IV (Article 51) already sets out the notion of a ‘significant’ branch and the importance of establishing a college of supervisors. The proposed guidelines take this a step forward for ‘significant-plus’ branches – defined as a branch that is of sufficient significance to the banking group as a whole, or is of sufficient systemic importance in the host Member State.

One clear driver of these guidelines is recovery planning, where the host supervisors of locally important branches have been pushing hard to ensure that their interests are taken sufficiently into account in the construction of group recovery plans, and in the assessment of these plans by the home supervisor.

The proposed guidelines recommend more intensive supervision and closer cooperation between home and host supervisors for a ‘significant-plus’ branch, including:

• A separate branch risk assessment as part of the supervisory review and evaluation programme (SREP);
• Specific focus on the branch at the college of supervisors;
• Regular on-site checks and inspections of the branch;
• Careful application of supervisory and macro-prudential measures to the branch; and
• Proper reflection of the position of the branch in group recovery planning.

Where dissenting views arise between home and host supervisors in these areas, the authorities are encouraged to seek (and follow) the EBA’s opinion.