interview
ECB banking supervision: Banks must strengthen their resilience
According to the ECB, the major banks in the euro area are in a better position overall today than they were ten years ago. But the supervisory authority sees no reason to give the all-clear.
The ECB banking supervisory authority is warning financial institutions in the euro area to rest on their recently increased profits. “It is good news that banks are more profitable, but we urge them to use this opportunity to strengthen their resilience,” European Central Bank (ECB) banking supervision chief Claudia Buch told the newspapers. Handelsblatt”, “Expansión”, “Il Sole 24 Ore” and “Les Echos” in a joint interview.
“For example, the cyber resilience stress tests we conducted this year showed that banks are generally well prepared, but they also need to improve their cyber resilience – which is very costly,” said Buch. “Balancing short-term shareholder dividend expectations with investments in resilience is critical to sustainable growth.”
Concerns about foreign banks are unfounded
Buch did not comment directly on a possible takeover of Commerzbank by the major Italian bank Unicredit. Indirectly, she addressed the concerns of German entrepreneurs who fear that Commerzbank might grant fewer loans to German medium-sized businesses if it were swallowed up by Unicredit.
“During crises, foreign banks sometimes have more stable lending patterns than domestic banks because they have a diversified business model,” Buch said. “The concerns I sometimes hear are not well founded.” Buch emphasized that her statements did not refer to specific banks.
ECB banking supervision was created ten years ago as a lesson from the banking and financial crisis. Since November 4, 2014, the European Central Bank has been the central banking supervisory authority for the euro area. According to the latest information, the ECB banking supervisory authority directly monitors 113 banks, which together represent 82 percent of the banking market in the currency area. The aim of the joint supervision is to ensure greater stability in the financial system with uniform rules for the largest financial institutions in the euro area.
Information on ECB banking supervision Supervisory body ECB banking supervision List of banks supervised by the ECB Book interview November 5th, 2024
dpa
Source: Stern
