• Abstract and Figures
• Public Full-text

Annual Report of the Federal Financial Supervisory Authority Financial of the Federal Annual Report ’08 ’08 ISSN 1611-910X Annual Report Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht –BaFin) President’s Statement BaFin’s image is primarily defined by its logo, a mixed figurative and word mark which – we hope – benefits from a high level of recognition. We could have complemented it with a catchy slogan but have so far lacked the time to look for the right kind of words that might provide a succinct and appropriate description highlighting the essence of the German financial supervisory authority. The current state of affairs, however, might force our hand in terms of imposing on us a watchword which, while sounding rather light-hearted, nevertheless carries a serious meaning for us: “Things remain exciting!” Three words which not only describe BaFin’s situation but also that of the international financial system over recent months: Things kept coming to a head which simply could not have been foreseen by anyone. To date, the fall of the house of Lehman in September 2008, which nearly triggered a global catastrophe, represented the nadir. At the last minute, the governments of the world’s major industrialised nations avoided disaster by preventing the collapse of other financial institutions crucial to the system. Consequently, in Germany the Hypo Real Estate Group was rescued. Since Lehman, the financial markets have been gripped by a deep sense of mistrust which has yet to be dispelled. The crisis has become some kind of normality. Things will indeed remain exciting, given that nobody can know whether a new storm is brewing somewhere. The financial crisis has triggered a deep global recession which in turn may have repercussions for financial markets. One alarming scenario would be if banks still burdened with toxic assets were forced to carry out major value adjustments which could worsen the crisis again. These toxic assets must therefore be removed from the international financial system. Irrespective of the technique used to safeguard the banks against another loss of value regarding their toxic assets, the main point is that it must be adopted soon so as not to jeopardise the supply of credit to the economy. A national economy can quickly run into trouble if its banking industry is unable to operate. However, the big easy is going to cost the taxpayer money. But this money represents a sound investment given that it will serve to strengthen key institutions. This is our only chance to overcome the recession more rapidly than is currently forecast. It would be nice if we could gradually return to a state of affairs deserving of the description “normality”. A long time ago, the Nobel Prize Winner for Literature, Samuel Beckett, remarked that we live in such exciting times that the only thing left capable of actually shocking people is boredom. Such words could only come from somebody who did not have to live through the financial crisis. I believe that at present the world would like nothing better than a bit of boredom. For the time being, however, this is unfortunately no more than a pious hope. Bonn and Frankfurt am Main | April 2009 Jochen Sanio President Table of Contents I Introduction 9 II Economic environment 11 1 From a financial to an economic crisis .......................... 11 2 Financial markets ...................................................... 21 3 Banks ...................................................................... 25 4 Insurers .................................................................... 30 III International 35 1 International harmonisation ........................................ 35 1.1 Financial stability and market transparency ............ 37 1.2 Risk management and capital .............................. 49 1.3 Occupational pension schemes .............................. 52 2 Amendment to the Capital Adequacy Directive .............. 54 3 Solvency II .............................................................. 58 4 Accounting ..............................................................62 5 International cooperation ............................................ 66 5.1 Cross-border collaboration .................................... 66 5.2 Memoranda of Understanding .............................. 68 5.3 Technical cooperation .......................................... 70 IV Supervision of insurance undertakings and pension funds 71 1 Basis for supervision .................................................. 71 1.1 Implementation of the Acquisition Directive ............ 71 1.2 Ordinances ........................................................ 72 1.3 MaRisk VA .......................................................... 74 2 Ongoing supervision .................................................. 75 2.1 Authorised insurance undertakings and pension funds ................................................ 75 2.2 Interim reporting ................................................ 78 2.2.1 Financial market crisis.................................. 78 2.2.2 Business development.................................. 79 2.2.3 Investments................................................ 81 2.3 Solvency ............................................................ 83 2.4 Stress testing .................................................... 84 2.5 Composition of the risk asset ratio ........................ 85 2.6 Risk-oriented supervision ...................................... 88 2.7 Risk and audit reports .......................................... 92 2.7.1 Risk reports ................................................ 92 2.7.2 Audit reports .............................................. 96 2.8 Performance in the individual sectors .................... 97 V Supervision of banks and financial services institutions 105 1 Basis for supervision ................................................ 105 1.1 Implementation of the Payment Services Directive 105 1.2 Implementation of the Acquisition Directive .......... 106 1.3 Holder Control Regulation.................................... 108 1.4 New leasing and factoring permits........................ 109 1.5 Further changes in supervisory legislation ............ 110 1.6 Further development of MaRisk............................ 111 1.7 Circular on the Act implementing the Markets in Financial Instruments Directive ...................... 112 2 Ongoing solvency supervision .................................... 113 2.1 Authorised banks .............................................. 113 2.2 Economic development ...................................... 117 2.3 Risk classification .............................................. 125 2.4 Supervisory actions ............................................ 126 2.5 IRBA and AMA application procedures .................. 131 2.6 Non-performing loans ........................................ 134 2.7 Financial services institutions .............................. 135 3 Market supervision .................................................. 140 3.1 Credit institutions and financial services institutions 140 3.2 Rules of conduct in analysing financial instruments 144 VI Supervision of securities trading and investment business 147 1 Basis for supervision ................................................ 147 1.1 Short-selling ban................................................ 147 1.2 Risk Limitation Act ............................................ 149 1.3 Venture Capital Investment Act............................ 149 1.4 Investment Audit Report Ordinance ...................... 150 1.5 Supervisory practice .......................................... 150 2 Monitoring of market transparency and integrity .......... 152 2.1 Trading platforms .............................................. 152 2.2 Market analysis.................................................. 154 2.3 Insider trading .................................................. 157 2.4 Market manipulation .......................................... 161 2.5 Ad hoc disclosure and directors’ dealings .............. 164 2.6 Voting rights and obligations to provide information to securities holders .......................................... 167 3 Prospectuses .......................................................... 170 3.1 Securities prospectuses ...................................... 170 3.2 Non-securities investment prospectuses .............. 173 4 Company takeovers .................................................. 175 4.1 Takeover bid procedures .................................... 176 4.2 Prohibitions ...................................................... 182 4.3 Exemption procedures ........................................ 183 5 Financial reporting enforcement ................................ 186 5.1 Monitoring of corporate financial statements.......... 186 5.2 Publication of financial reports ............................ 189 6 Supervision of investment business ............................ 191 6.1 German asset management companies ................ 191 6.2 Investment funds .............................................. 193 6.3 Real estate funds .............................................. 194 6.4 Hedge funds ...................................................... 196 6.5 Foreign investment funds .................................... 197 VII Cross-sectoral responsibilities 199 1 Deposit guarantee, investor compensation and protection funds ......................................................199 2 Licensing/authorisation requirements and prosecution

Load more

  271

Copy Link