CELEX: 
Language: en
Date: 2013-12-11 00:00:00
Title: Memorandum of Understanding between the Council of the European Union and the ECB on the cooperation on procedures related to the Single Supervisory Mechanism (SSM)

Memorandum of Understanding
           between the Council of the European Union and the European Central Bank
      on the cooperation on procedures related to the Single Supervisory Mechanism (SSM)
THE COUNCIL OF THE EUROPEAN UNION AND THE EUROPEAN CENTRAL BANK,
-    having regard to the Treaty on European Union and the Treaty on the Functioning of the European
     Union (TFEU), in particular Article 127(6) thereof,
-    having regard to Regulation (EU) No 1024/2013 of the Council of 15 October 2013 conferring
     specific tasks on the European Central Bank concerning policies relating to the prudential
     supervision of credit institutions 1, and in particular to its Recitals (55) and (69), and its Articles
     20(1) to (4) and (6), 25(2), 26(3) and (4), 29(2), Article 32 and Article 33(2),
A.   whereas Regulation (EU) No 1024/2013 confers on the European Central Bank (ECB) specific
     tasks concerning policies relating to the prudential supervision of credit institutions, with a view to
     contributing to the safety and soundness of credit institutions and the stability of the financial
     system within the European Union and each Member State participating in the Single Supervisory
     Mechanism (SSM);
B.   whereas Articles 4 and 9 of Regulation (EU) No 1024/2013 establish that the ECB shall be
     considered, as appropriate, the competent authority or the designated authority for the exclusive
     purpose of carrying out the supervisory tasks conferred upon the ECB;
C.   whereas the conferral of supervisory tasks implies a significant responsibility for the ECB to
     contribute to financial stability in the Union, using its supervisory powers in the most effective and
     proportionate way;
D.   whereas any conferral of supervisory powers to the Union level should be balanced by appropriate
     accountability requirements; under Article 20 of Regulation (EU) No 1024/2013 the ECB is
     therefore accountable for the implementation of that Regulation to the European Parliament and the
     Council as democratically legitimised institutions representing the citizens of the Union and the
     Member States;
E.   whereas Recital 55 of Regulation (EU) No 1024/2013 specifies that any reporting obligations vis-à-
     vis the Council or the Euro Group should be subject to the relevant professional secrecy
     requirements; whereas Recital 74 and Article 27(1) of that Regulation provide that the members of
     the Supervisory Board, the steering committee, staff of the ECB and staff seconded by participating
     Member States carrying out supervisory duties shall be subject to the professional secrecy
     requirements set out in Article 37 of the Statute of the ESCB and the ECB (hereinafter referred to
1    OJ L 287, of 29.10.2013, p. 63.
 ---pagebreak---     as "ESCB Statute") and in relevant acts of Union law; whereas Article 339 TFEU and Article 37 of
    the ESCB Statute establish that the members of the governing bodies and the staff of the ECB and
    the national central banks are bound by the obligation of professional secrecy;
F.  whereas Article 27(2) of Regulation (EU) No 1024/2013 provides that for the purpose of carrying
    out the tasks conferred upon it, the ECB shall be authorised, within the limits and under the
    conditions set out in the relevant Union law, to exchange information with national or Union
    authorities and bodies where the relevant Union law allows national competent authorities to
    disclose information to those entities or where Member States may provide for such disclosure
    under the relevant Union law;
G.  whereas organisational separation of the ECB's staff involved in the execution of the ECB's
    supervisory tasks from staff involved in the execution of monetary policy tasks must be such that
    the Regulation (EU) No 1024/2013 is fully complied with;
H.  whereas for the performance of its tasks under Regulation (EU) No 1024/2013 with regard to the
    appointment of the Chair of the Supervisory Board, the Council receives personal data and is
    subject to Regulation (EC) 45/2001 of the European Parliament and of the Council of 18 December
    2000 on the protection of individuals with regard to the processing of personal data by the
    Community institutions and bodies and on the free movement of such data2;
I.  whereas this Memorandum only covers the accountability and reporting obligation of the ECB to
    the Council and the Euro Group under Regulation (EU) No 1024/2013;
AGREE AS FOLLOWS:
I.  ACCOUNTABILITY
1.  Reports
(1) The     ECB     shall    submit  the   draft  of   its  annual     report under    Article  20(2)  of
    Regulation (EU) No 1024/2013 (Annual Report) to the Council and the Euro Group on a
    confidential basis in one of the official languages of the EU Institutions at the same time it submits
    it to the EP. Translations in all official languages of the EU Institutions shall be made available
    subsequently. The Chair of the Supervisory Board shall present the Annual Report to the Euro
    Group in the presence of representatives from any participating Member State whose currency is
    not the euro. The Annual report shall cover, inter alia:
    (a)     execution of supervisory tasks
    (b)     sharing of tasks with the national supervisory authorities
    (c)     cooperation with other national/Union relevant authorities
2   OJ L 8, 12.1.2001, p. 1.
                                                    2
 ---pagebreak---       (d)    separation between monetary policy and supervisory tasks
      (e)    evolution of supervisory structure and staffing, including the number and the national
             composition of Seconded National Experts
      (f)    implementation of the Code of Conduct
      (g)    method of calculation and amount of supervisory fees.
      (h)    budget for supervisory tasks.
      (i)    Experience with reporting on the basis of Article 23 of Regulation (EU) No 1024/2013
             (Reporting of violations).
      (j)    An annex listing the legal instruments adopted by the ECB pursuant to Article 4(3) of
             Regulation (EU) No 1024/2013 and published on its website.
(2)   During the start-up phase referred to in Article 33(2) of Regulation (EU) No 1024/2013, the ECB
      shall transmit to the Council quarterly reports on progress in the operational implementation of the
      Regulation covering, inter alia:
      (a)    internal preparation, organisation and planning of work
      (b)    concrete arrangements made to comply with the requirement to separate monetary policy and
             supervisory functions
      (c)    cooperation with other national/Union competent authorities
      (d)    any obstacles encountered by the ECB in the preparation of its supervisory tasks
      (e)    any events of concern or changes to the Code of Conduct
      (f)    any other information deemed relevant in the start-up phase by the ECB
2.    Hearings and exchanges of views
(1)   The Chair of the Supervisory Board shall participate in two exchanges of views per year on the
      execution of the supervisory tasks conferred on the ECB by Regulation (EU) No 1024/2013 with
      the Euro Group in the presence of representatives from any participating Member State whose
      currency is not the euro.
(2)   At the invitation of the Euro Group, the Chair of the Supervisory Board shall participate in
      additional exchanges of views on the execution of the supervisory tasks conferred on the ECB by
      Regulation (EU) No 1024/2013 with the Euro Group in the presence of representatives from any
      participating Member State whose currency is not the euro.
(3)   The information exchanged during such hearings and exchanges of views shall be confidential.
(4)   The hearings and exchanges of views can cover all aspects of the activity and functioning of the
      SSM provided for in Regulation (EU) No 1024/2013.
3.    Responding to questions
The ECB shall reply orally or in writing to questions put to it by the Euro Group in accordance with its
own procedures and in the presence of representatives from any participating Member State whose
currency is not the euro. The ECB shall reply in writing to written questions put to it by the Euro Group,
which shall also be communicated to the representatives from any participating Member State whose
                                                     3
 ---pagebreak--- currency is not the euro. These questions should be channelled to the Chair of the Supervisory Board by
the President of the Euro Group. Questions shall be replied to as promptly as possible, and in any event
within five weeks of their transmission to the ECB.
II.   SELECTION AND APPOINTMENT PROCEDURES
(1)   The ECB shall specify and make public the criteria for the selection of the Chair of the Supervisory
      Board (Chair), including the balance of skills, knowledge of financial institutions and markets, and
      experience in financial supervision and macro-prudential oversight. In specifying the criteria, the
      ECB shall aim at the highest professional standards and take into account the need to safeguard the
      interest of the European Union as a whole.
(2)   The ECB shall inform the Council two weeks before the Governing Council publishes the vacancy
      notice of the details, including the selection criteria and the specific job profile, of the "open
      selection procedure" that it intends to apply for the selection of the Chair.
(3)   The Governing Council shall inform the Council of the composition of the pool of applicants for
      the position of Chair (number of applications, mix of professional skills, gender and nationality
      balance, etc.) as well as of the method through which the pool of applicants is screened in order to
      draw up a shortlist of at least two candidates and eventually determine the proposal by the ECB.
(4)   The ECB shall provide to the Council the shortlist of candidates for the position of the Chair at
      least three weeks before submitting its formal proposal for the appointment of the Chair to
      Parliament for its approval.
(5)   Following the proposal for the appointment of the chair by the ECB and the approval by
      Parliament, the Council appoints the Chair by adopting an implementing decision in accordance
      with Article 26(3) of Regulation (EU) No 1024/2013.
(6)   Where Parliament or the Council has informed the ECB that it considers the conditions for the
      removal of the Chair or the Vice-Chair to be fulfilled for the purposes of Article 26(4) of
      Regulation (EU) No 1024/2013, the ECB shall provide its considerations in writing within four
      weeks.
III.  FINAL PROVISIONS
(1)   The information exchanged under this Memorandum shall be subject to applicable confidentiality
      rules as well as the security rules for protecting EU classified information, which shall continue to
      apply after the termination of this Memorandum. The information shall only be used for the
      purpose for which it has been exchanged.
(2)   The practical implementation of this Memorandum shall be assessed by the ECB and the Council
      every three years.
                                                      4
 ---pagebreak--- (3)  This Memorandum shall enter into force on the day after the date on which this Memorandum has
     been signed by both the ECB and the Council.
                For the Council                           For the European Central Bank
                 The President                                     The President
                 R. ŠADŽIUS                                        M. DRAGHI
        [signed 11th December 2013]                        [signed 4th December 2013]
 ____________________________________             ____________________________________
      Brussels,          December 2013             Frankfurt am Main,           December 2013
                                                 5