Banks give positive assessment of European banking supervision
“All in all, it’s been a good first twelve months,” said Michael Kemmer, general manager of the Association of German Banks, looking back on one year of the Single Supervisory Mechanism (SSM). The European Central Bank (ECB) had faced a monumental challenge when it took over supervision of eurozone banks at the beginning of November 2014. “What has been achieved in this short time deserves the utmost credit and respect,” he commented. The ECB and the banks worked together closely and professionally. “Some banks are in touch with their supervisor every day,” Mr Kemmer added. The new supervisory mechanism for eurozone banks therefore meant a lot of work not only for the ECB but also for the supervised banks – yet it was worth this effort.
While full of praise for the SSM, the Association of German Banks also saw some room for improvement. “More transparency on one or two issues would be helpful. That goes, for example, for the business model analysis carried out by the ECB,” Mr Kemmer explained. The banks didn’t receive enough information on how and with whom they were compared and where their strengths or weaknesses lay.
At the same time, the amount of information, reports and data required under the SSM had greatly increased – and a further increase was already discernible. Some of this information was requested at short notice and without any further explanation, as well as in widely differing data formats. “I see this as a problematic trend, particularly for our smaller banks,” Mr Kemmer stressed. “The banks that aren’t directly supervised by the ECB shouldn’t be subject to the same high-level requirements as an internationally operating big bank, otherwise they may well be overburdened. So the principle of proportionality needs to be applied more in supervisors’ work.” Mr Kemmer was, however, confident that these teething problems would be identified and then gradually eliminated.
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