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Czech Banking Association: How We Work and Take on New Challenges...

Czech Banking Association: How We Work and Take on New Challenges. EBF Seminar Skopje. 19th September 2011. Banking Sector and CBA Membership. Membership on a voluntary basis; CBA generally represents interests of the entire banking sector (more than 99 % of all assets );

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Czech Banking Association: How We Work and Take on New Challenges...

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  1. Czech Banking Association: How We Work and Take on New Challenges... EBF Seminar Skopje 19th September 2011

  2. Banking Sector and CBA Membership • Membership on a voluntary basis; • CBA generally represents interests of the entire banking sector (more than 99 % of all assets); • Non-member banks: either newly licensed (most become members sooner or later) or very small and/or regional branches of foreign banks.

  3. Organizational Chart Assembly of Members (full + associates) Supervisory Board Ethical Committee Executive Board Scientific Council Secretariat Komise pro bankovní regulaci Daňová komise Právní komise Commission for Banking Regulation Commission for Taxation Issues Legal Commission Komise pro finanční a bankovní bezpečnost Komise pro hypoteční obchody Commission for Banking/ Financial Security Commission for Mortgage Banking Financial Market Commission Komise pro finanční trh Komise pro účetnictví a reporting Komise pro platební styk Komise pro vnitřní audit Commission for Accounting and Reporting Commission for Payment Systems Commission for Internal Audit Pracovní skupina pro oceňování majetku Komise pro spotřebitelské otázky Pracovní skupina pro exportní financování Property Valuation Working Group Consumer Affairs Commission Export Finance Working Group Komise pro komunikaci a CSR Commission for Communication and CSR

  4. Main CBA Bodies: a couple of comments... Assembly of Members • 38 members, 1 member bank = 1 vote; • regular meeting annually (can be twice a year); • approves general guidelines, documents (budget etc.), elects the (Executive) Board and Supervisory Board (both for 3-year periods). Executive Board • 5-9 members (3 years) –CEOs of major banks (but not exclusively) • meets approx. 6 times per year, now shifting more focus towards strategic issues and questions (from operative); • consensus approval (voting exceptional); • still takes active part in the (especially high-level) day-to-day business of the Association (meetings with CNB Board Members, Ministers and their Deputies, representatives of the (national) Parliament, EU, IMF, WB, European Parliament, etc.; • priorities set in the Action Plan (3 years, with annual updates).

  5. Main CBA Bodies: a few comments cont... Supervisory Board • currently 4 members (3 years), meets 4 times a year; • controlling (checks accounts, costs, budget), assuring that day-to-day business life of the Association is in line with the tasks from the Board and Statutes. CBA Secretariat • Day-to-day running of the Association; • headed by the Managing Director + permanent staff of 13; • coordinators of the commissions and working groups (meeting organization, co-ordination of the work, reports and memos, drafting CBA positions, communication with the state bodies, etc.); • PR and communication, analytical work; • prepares and coordinates meetings of the Board, Supervisory Board and Assembly of the Members; • creates and implements strategy for further development of the Association.

  6. CBA: Key Objectives/ Tasks • represent and promote common interests of our members in the Parliament, Government, Czech National Bank and towards other legal entities; • present the role and the interests of the banking sector to the public and vis-a-vis abroad; • participate in the standardisation of the banking practices and support the harmonisation of the banking laws with the EU legislation.

  7. What we do: more specifically... • Active involvement in the preparation of laws and other regulations in all stages of the legislative process (directly or indirectly affecting the banking industry). • We monitor, look at (and comment upon) banking regulation, legislation affecting capital markets, securities, mortgage banking, accounting and taxes, retail banking (consumer protection and others), internal audit, payment systems, legislation aimed at prevention of the financial criminality and AML legalisation, national and international regulation of export credits. • We organise seminars (educational, good-practice, etc.) for our members. • We do look at the national level and do our best to look at the EU level too (EBF is of great help). • We also participate in self-regulating projects (client mobility, mortgages, fees, etc.). • In 2004 we became full members of the EBF. We do our best to support the EBF work as actively as possible. We are also members of the European Payments Council. • We do talk to other stakeholders (common and diverse interests).

  8. This Is How We Do It... • We do our best to maintain good working contacts (both at the high and lower levels) with the Ministry of Finance, Czech national bank and other state bodies. • Regular meetings of the members of the Board and/or Managing Director (or his deputy) with the Finance Minister, his deputies; members of the Board of the CNB; parliamentary deputies. Regular meetings of the Board with the PM. • Officially the Association is externally represented by: President, Vice-President, Managing Director (and his deputy). • Representation in EBF: President (Board), Managing Director (Executive Committee), chairmen of the commissions or coordinators or designated commission members (EBF committees and working groups). • The Board approves the strategic guidelines and major operative positions.

  9. Work in Commissions • Most of the day-to-day business is done in the commissions and working groups: experts from the banks (active and motivated, management needs to give them space and time) • Members of the working groups (10 – 30) are nominated by banks ad personae, i.e. they do not represent the position of the bank. • Members of the commissions elect a chairman (and one or more vice-chairmen) from within to chair the meetings, represent the commission externally and manage its work (in co-ordination with the staff coordinators). • Commissions meet regularly and also ad hoc; meeting is chaired by the chairman (or coordinator), minutes are taken, positions discussed and taken. Quite often (outside and inside) guests are invited.

  10. Work in Commissions cont. • Commissions (and especially chairman with coordinatorsand CBA managing director) meet regularly with the representatives of the ministries (deputy ministers, department level and lower) – explain positions, provide arguments, feedback, etc. • Special working teams and task forces within the commissions and working groups (e.g. IMU Task Force, syndicated loan contract template task force). • Close co-operation among working groups (co-ordinators play important role) – e.g. Legal and Banking Regulation; Legal and Consumer Affairs; Export Credit and Taxes; and many others; usually ad-hoc. • Many other permanent and ad hoc working groups (building savings, workout, etc.)

  11. Current Priorities • Banking Regulation • Legal • Retail Banking - Mortgages • Payment Systems (SEPA) • Relations with the Government and Parliament • Many European Initiatives • Pro-active: Better regulation and supervision of non-bank credit institutions/providers.

  12. Other Major Topical Agenda • Taxes, Accounting, Reporting • Security • Deposit Guarantee Insurance System • Export Finance • Corporate Issues (SMEs, insolvency issues, etc.) • Financial Education/Literacy • FATCA

  13. Further Development • more focus on strategic issues and topics; • strategy to become a centre of knowledge excellence on banking issues and an opinion-maker; • more focus on analytical work, greater involvement in discussing national macroeconomic topics, Scientific Council total restructuring in 2010, etc.; • greater focus on internal (newsletters, seminars) and external communication (PR), image of the banking sector; • greater involvement in the financial literacy activities and projects; • new fields of activities, new projects (corporates and SMEs, workout, syndicated loans contract templates, etc.); • more active involvement in the EBF work.

  14. Total Revamp of Scientific Council (SC) • one of the examples of very recent changes in the work of CBA • prior to change Scientific Council: • was a social discussion club of ex-bankers and academics; • met approx. twice a year; • had very little value added; • in April 2010 it was decided to: • abolish the Economic and Monetary Affairs Working Group • restructure the member base and appoint L. Niedermayer (ex-vicegovernor of CNB) as a new SC chairman • totally change the work and value-added of the Council • Vision • SC is to become the centre of strategic inputs for the Board, the centre where strategic issues are identified, discussed and analyzed (with concrete outcomes) • work at two levels: • Broad SC: identify and discuss new topics • Project- team level: work on topics, analyze, publish outcomes • outputs both internally and externally; cooperation with CBA commissions

  15. Scientific Council Revamp: Outcomes • Outcomes • a first list of strategic topics was identified in 2010 (and approved by the Board), several project teams established • June 2010: analysis of the Impact of New Banking Regulation on Czech Banking Sector (with update in September 2010) - internal • November 2010: analysis of the Czech Labour Market Issues (external) • January 2011: analysis of the New Remuneration Legislation and its impact on banks (internal) • June 2011: Comments on the Pension Reform Proposals (external) • currently work on: Financial Sector and Competitiveness (nearly finalized); Fiscal Situation and Strategy of CZ • plus: ad hoc analyses and CBA supporting materialand comments; • since 2011: regular quarterly CBA macroeconomic forecasts • guests are invited for discussions

  16. A Couple of Recommendations... • activize the banking experts for the work for the association (top-down approach) • maintain good and regular contacts with state bodies; • search for natural allies (ad hoc); • be constructive (comments) and offer solutions; • explain your position, provide data supporting your arguments; • try to become an official obligatory “consultation point” (that must be consulted) at least for the legislation directly affecting or aimed at banks; • work on your PR and reputation (as a centre of knowledge excellence) – your comments will be more respected and more requested (both from authorities and media); • follow and monitor work of the EBF (and if possible contribute actively);

  17. Many Thanks for your Attention. Space for Discussion... Questions and Comments Welcome... If you need any assistance please feel free to email me: busek@czech-ba.cz Jiří Bušek, chief economist Czech Banking Association

  18. We Are Living in Turbulent Times...

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