On 21 November, the Monegasque Association of Financial Activities invited Mr. Fernandez-Bollo to its last lunch conference-luncheon. The Secretary General of the Autorité de Contrôle Prudentiel et de Résolution (ACPR) spoke about the new regulatory measures.
Mr. Fernandez-Bollo emphasised that these developments regarding liquidity, solvency, rules of governance and internal supervision, in addition to those connected with Banking Union, will affect Monaco only indirectly. The Single Supervisory Mechanism (SSM) between the European Central Bank (ECB) and the national supervision authorities (ACPR for France and Monaco) allocates the supervision missions of European banks; it does not impact the Monegasque institutions directly but through their membership of these groups. Credit institutions are not under ECB control in Monaco today and this will apply in the future. The asset risk level is not the most important prudential supervision concern in the Monaco financial centre, and developments forcing the risk calculation should not have a strong impact there. However, there are two pressing needs: effective management of compliance costs, and management of costs connected with the institutions’ reputation risk. To sum up, the additional costs of managing the asset quality risk are low compared with the costs of compliance and the pressing need to maintain good cost-effectiveness in a highly competitive market.
The ACPR will undergo an internal reorganization in order to play its role in the European Union better: that of safeguarding the stability of the financial system, and the protection of customers and insured parties (organizations in the banking and insurance sectors). Monegasque banks will see some of their interlocutors change but relationships will continue to be built on the same basis, the overall framework of relations remaining essentially unchanged.
Issues related to the resolution of banking groups are another discernable development. The objective is to facilitate the handling of banking crises and to allow the potential shut down of a banking group while protecting its critical functions. The Single Resolution Mechanism (SRM) in place from 1 January 2015 should prevent states from being forced to bail out banking groups in difficulty. The Principality of Monaco can opt for a completely separate Resolution Plan or one connected with the French Plan, but this will be a Monegasque decision.
In conclusion, Mr. Edouard Fernandez-Bollo emphasised the very good relations established in Monaco with the French banking authorities, and stated that he is pleased about the strength of these relations.
