Banking Supervision Needs to be Proactive, Asserts ECB’s Donnery
The banking system needs to be prepared for an increasingly intricate risk landscape, according to Sharon Donnery, a member of the European Central Bank’s supervisory board. In a recent address at a meeting in London, Donnery elucidated her views on the future of banking supervision, advocating for a proactive approach.
Sharon Donnery
Resilience is Key
Donnery emphasized the need for resilience in the banking system to navigate the complex risk landscape. She argued that the role of banks is akin to the critical infrastructure on which societies depend – a role that cannot be underestimated or overlooked.
Forward-Looking Supervision
Donnery believes that banking supervision needs to be forward-looking. This means that supervision should not be watered down to promote growth but should instead anticipate future risks and challenges. This proactive approach is crucial for maintaining the stability and integrity of the banking system.
ECB’s Stance
The European Central Bank (ECB) has been a strong advocate for rigorous and forward-looking supervision. This is in line with its role in maintaining the financial stability of the Eurozone. Donnery’s comments reinforce the ECB’s position, highlighting the importance of robust supervision in the face of growing complexity in the financial landscape.
Banking supervision is a critical aspect of the financial system. It ensures that banks operate in a safe and sound manner, protecting depositors and maintaining confidence in the financial system. A proactive approach to supervision, as advocated by Donnery, can help anticipate and mitigate potential risks, contributing to the overall resilience of the banking system.
The full details of Sharon Donnery’s keynote speech can be found Here.
