The assessment that resilience is currently the absolute priority of European banking supervision was expressed by Martin Neisen, Partner, Financial Services, Governance, Risk, and Compliance at PwC Germany, addressing the audience of the 13th Banking, Payments and Fintech Forum and Expo, presented by Logicom.
As he stated, “the ECB’s key priority is resilience – both in the face of macroeconomic and geopolitical risks, as well as in terms of operational resilience, cyber risks and IT governance.” In this context, he underlined that increased supervisory requirements and extensive standardisation of processes come at a cost for banks, noting that compliance, such as in significant risk transfer (SRT) approvals, requires significant investments in data and systems. “Where there is light, there is also shadow,” he noted, referring to the consequences of stricter supervision.
Neisan made particular reference to the €30 billion limit for direct supervision by the ECB, underlining that, despite the discussions and understanding expressed by institutions and market players, the limit has remained unchanged since 2013. As he explained, the current political situation is not conducive to revising the framework, as opening up the regulations could lead to broader and difficult-to-manage changes.
At the same time, he pointed out that credit risk is dynamically returning to the ECB's agenda, with non-performing loan ratios showing increasing trends in some countries, which intensifies the need to maintain strong capital reserves. In closing, he focused on geopolitical risks, emphasising that international developments can directly and substantially affect the risk profile of banks.
(Source: InBusinessnews)
