EBA publishes response to draft Maystadt report

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19 Nov, 2013

Following the publication of the final Maystadt report, the European Banking Authority (EBA) has made available its response to the draft of the report. As with the ESMA response to the draft report published last week, the core points remain applicable even though the final Maystadt report has undergone some changes vis-à-vis the draft version.

EBA believes that financial stability and prudence considerations should be given appropriate weight in standard-setting and that a wider engagement of prudential and financial stability authorities in the standard-setting process would therefore be advisable. (The suggestion to make EBA one of the contributing actors was taken up in the final version of the report.)

The main three points EBA raises in the comment letter concern endorsement advice, member states and stakeholders, and independence.

On endorsement advice, EBA believes that this "should be provided with the objective to respect the public interest according to the IAS Regulation and, therefore, the body entrusted with this mission should serve the needs of the public interest". EBA is not convinced that the recommended transformation of EFRAG with a Supervisory Board composed of both, members representing public and private interest, will achieve this objective. EBA is especially sceptical regarding the ability of such a body to make decisions on a consensus basis and has concerns that situations might arise where the public authorities are outvoted by the other members. Therefore, EBA suggests either leaving decisions on the endorsement advice to the public authorities represented in the body alone or to install a separate independent body responsible for providing the endorsement advice (which would be a public authority).

On member states and stakeholders EBA requests that "the body representing the EU voice should have the capacity to encompass all member states' interest and should also be able to consider the view of all stakeholders with an interest in financial reporting", and on independence the response simply states that "the independence of the members of this body should be ensured".

Please click for access to the full letter on the EBA website. (Please keep in mind that this is a response to the draft report and some of the concerns were addressed in the final report.)

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