Central Bank publishes policy on information exchange for bank branches abroad

The Central Bank of Cyprus published its policy on Thursday on the exchange and collection of information for macroprudential purposes on branches of credit institutions whose head office is in another EU member state or a third country.

The definition of its policy comes following a Recommendation of the European Systemic Risk Board (ESRB/2019/18) issued on 26 September 2019, the Cyprus Central Bank says in a press release.

“Under recommendation A, relevant authorities are recommended to exchange information deemed necessary for macro-prudential purposes,” it adds.
 
According to the recommendation relevant authorities should exchange information “deemed necessary for the discharge of their tasks related to the adoption and/or activation of macroprudential policy measures or for other financial stability tasks, in an effective and efficient manner, as regards branches in a host Member State of credit institutions having their head office in another Member State or in a third country.”

The exchange of information should take place “upon receipt of a reasoned request for information in relation to such branches submitted by a relevant authority of the host Member State entrusted with the adoption and/or activation of macroprudential policy measures or with other financial stability tasks, taking into account any guidelines issued by the European Banking Authority.”

“The information to be exchanged should be proportionate to the relevance of the branches to financial stability in the host Member State,” the recommendation reads.

Relevant authorities are also recommended to “establish memoranda of understanding or other forms of voluntary arrangements for cooperation and exchange of information among themselves — or with a relevant authority of a third country — regarding branches in the host Member State of credit institutions having their head office in another Member State or in a third country, where considered necessary and appropriate by all parties involved to facilitate the exchange of information.”