A superordinate credit institution is an important component of the supervision of credit institution groups.
It serves as the central steering body and is responsible for coordinating and monitoring the activities of the group's credit institutions. The parent credit institution must ensure that the group as a whole operates in a stable and safe manner and complies with the applicable supervisory requirements.
An important task of the parent credit institution is to identify and assess the risks of the group. This includes monitoring the group's liquidity and capital resources. Another important objective is to avoid conflicts of interest between the credit institutions belonging to the group.
In the event of the insolvency of a credit institution belonging to the group, the parent credit institution is obliged to take appropriate measures to prevent the crisis from spreading to other parts of the group. In doing so, it must ensure that the credit institutions concerned are wound up in an orderly manner and do not pose a threat to the stability of the entire financial system.
The superordinate credit institution is itself subject to increased supervision and examination by the competent supervisory authorities. It must ensure that it is sufficiently solvent and has an appropriate risk management strategy. In addition, all relevant information about the credit institutions belonging to the group and their activities must be regularly forwarded to the supervisory authorities.
