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

19th September 2011

EBF Seminar SkopjeEBF Seminar Skopje

• 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.

Banking Sector and CBA MembershipNumber of banks in the Czech Republic (at 1st September 2011) 44

Number of full CBA members (at 1st September 2011) 38

Organizational Chart

Supervisory Board

Assembly of Members (full + associates)

Executive Board

Secretariat

Komise pro finanční a bankovní bezpečnost

Komise pro platební styk

Komise pro spotřebitelské otázky

Komise pro komunikaci a CSR

Daňová komise

Komise pro hypoteční obchody

Komise pro účetnictví a reporting

Pracovní skupina pro exportní financování

Právní komiseKomise pro bankovní regulaci

Komise pro finanční trh

Komise pro vnitřní audit

Pracovní skupina pro oceňování majetku

Scientific Council

Ethical Committee

Commission for Banking/Financial Security

Commission forPayment Systems

Consumer Affairs Commission

Commission forCommunication and CSR

Commission for Taxation Issues

Commission for Mortgage Banking

Commission for Accounting and

Reporting

Export Finance Working Group

Legal CommissionCommission for Banking Regulation

Financial Market Commission

Commission for Internal Audit

Property Valuation Working Group

• 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).

Main CBA Bodies: a couple of comments...Assembly of Members

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).

• 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.

Main CBA Bodies: a few comments cont...Supervisory Board

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.

• 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.

CBA: Key Objectives/ Tasks

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).

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.

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.

Work in Commissions cont.• Commissions (and especially chairman with coordinators and 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.)

• 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.

Current Priorities

• Taxes, Accounting, Reporting

• Security

• Deposit Guarantee Insurance System

• Export Finance

• Corporate Issues (SMEs, insolvency issues, etc.)

• Financial Education/Literacy

• FATCA

Other Major Topical Agenda

• 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.

Further Development

• one of the examples of very recent changes in the work of CBA• prior to change Scientific Council:

o was a social discussion club of ex-bankers and academics;o met approx. twice a year;o had very little value added;

• in April 2010 it was decided to:o abolish the Economic and Monetary Affairs Working Group o restructure the member base and appoint L. Niedermayer (ex-vicegovernor

of CNB) as a new SC chairmano 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

Total Revamp of Scientific Council (SC)

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 material and comments;• since 2011: regular quarterly CBA macroeconomic forecasts• guests are invited for discussions

Scientific Council Revamp: Outcomes

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);

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 economistCzech Banking Association

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