SSM Speeches of the Board Members
- Ignazio Angeloni: How real is Europe’s banking union? (Slides from the presentation)Presentation by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Peterson Institute for International Economics, Washington D.C., 19 April 2018
- Pentti Hakkarainen: Financial Integration, Competition, and Efficiency Speech by Pentti Hakkarainen, Member of the Supervisory Board of the ECB, at the European Bank Executive Committee Forum organised by BNP Paribas, Brussels, 11 April 2018
- Ignazio Angeloni: Another look at proportionality in banking supervisionRemarks by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the Thirteenth Asia-Pacific High Level Meeting on Banking Supervision, Singapore, 28 February 2018
- Ignazio Angeloni: Exchange of views before the Italian ParliamentIntroductory statement by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Rome, 20 December 2017
- Pentti Hakkarainen: Internal Auditors – Key figures within a stable European banking sectorSpeech by Pentti Hakkarainen, Member of the Supervisory Board of the ECB, at the ECIIA Conference, Frankfurt am Main, 21 November 2017
- Ignazio Angeloni: The ECB and national supervisory authorities: cooperation and common challengesSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the XXXI Convegno “Adolfo Beria di Argentine”, Courmayeur, 22 September 2017
- Pentti Hakkarainen: The challenges and future of banking in the EUDiscussant Remarks by Pentti Hakkarainen, Member of the Supervisory Board of the ECB, at the ESRB Annual Conference, Frankfurt, 22 September 2017
- Pentti Hakkarainen: Restructuring, resolution and insolvency: shift of tasks from judicial to administrative authoritiesDiscussant Remarks by Pentti Hakkarainen, Member of the Supervisory Board of the ECB, at the ECB Legal Conference, Frankfurt, 5 September 2017
- Ignazio Angeloni: Crisis management in the banking union: overview and early experienceSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the European University Institute “Financing Banking Resolution” Executive Seminar, Florence, 29 June 2017
- Ignazio Angeloni: Exchange of views on the banking reform package with the Finance and Treasury Standing Committee of the Senate of the Republic of ItalyIntroductory statement by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Finance and Treasury Standing Committee of the Senate of the Republic of Italy, Rome, 28 June 2017
- Pentti Hakkarainen: Enhancing the environment for banking competitionKeynote address by Pentti Hakkarainen, Member of the Supervisory Board of the ECB, at the FIBI International Banking Conference 2017, Dublin, 22 June 2017
- Pentti Hakkarainen: Banking union in 2017 – How to supervise a €27tn banking sector?Speech by Pentti Hakkarainen, Member of the Supervisory Board of the ECB, at the CIRSF Annual International Conference, Lisbon, 1 June 2017
- Ignazio Angeloni: Common challenges for banks, regulators and supervisorsSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the Adam Smith Society, Milan, 15 May 2017
- Ignazio Angeloni: ECB Banking Supervision achievements and challenges (slides from the presentation)Presentation by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the Prometeia conference “Europe: risks and opportunities”, Bologna, 31 March 2017
- Ignazio Angeloni: 60 years on: promoting European integration in the banking unionSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the Università Bocconi, Milan, 24 March 2017
- Ignazio Angeloni: Systemic risk mitigation: the roles of capital and corporate governanceSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Conference on “Banks, Systemic Risk, Measurement and Mitigation”, Panel on: “Systemic risk mitigation; is capital enough? The crucial role of corporate governance”, Università La Sapienza, Rome, 17 March 2017
- Julie Dickson: International and European Experience on Regulation, Supervision, and Resolution of Cross-Border Banks (slides from presentation)Speech by Julie Dickson, Member of the Supervisory Board of the ECB, in a session at a high-level conference on Cross-Border Banking and Regulatory Reforms: What Africa Can Learn from International Experience jointly organised by the IMF/BCS and AfDB, Mauritius, 2 February 2017
- Ignazio Angeloni: Faraway or close? Supervisors and central bankersSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Halle Institute for Economic Research (IWH), Halle, 2 February 2017
- Julie Dickson: Dealing with diversity - the European banking sectorSpeech by Julie Dickson, Member of the Supervisory Board of the ECB, at the 17th Handelsblatt Annual Conference on European Banking Regulation, Frankfurt am Main, 28 November 2016
- Ignazio Angeloni: A trans-Atlantic banking divide? (slides from the presentation)Speech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the 19th Annual International Banking Conference, Chicago, 4 November 2016
- Ignazio Angeloni: Challenges facing the Single Supervisory MechanismSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at De Nederlandsche Bank's ‘Netherlands Day', Amsterdam, 6 October 2016
- Ignazio Angeloni: Euro area banks after the 2016 Stress Test (slides from the presentation)Speech by Ignazio Angeloni, member of the Supervisory Board of the European Central Bank, at the Conference on “The Strengths and Weaknesses of European Banking”, Imperial College, London, 26 September 2016
- Ignazio Angeloni: Bank Competition and Bank SupervisionSpeech by Ignazio Angeloni, Member of the ECB Supervisory Board, at CaixaBank, Barcelona, 4 July 2016
- Ignazio Angeloni: European banks and the banking unionRemarks by Ignazio Angeloni, Member of the ECB's Supervisory Board, at the European American Economic Forum organised by Euronext and the European American Chamber of Commerce, New York, 7 June 2016
- Ignazio Angeloni: The Single Supervisory Mechanism - the fast-changing landscape of traditional banking modelsRemarks by Ignazio Angeloni, Member of the ECB's Supervisory Board, FinanceMalta 9th Annual Conference 2016, Malta, 26 May 2016
- Ignazio Angeloni: Introductory remarksSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Fact-finding inquiry into the conditions of the Italian banking and financial system and the safeguarding of savings, also with reference to supervision, crisis management and European deposit insurance, Rome, 3 May 2016
- Ignazio Angeloni: Banking union and the United Kingdom in the Single MarketSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Barclays Annual Bank Capital Conference, London, 9 March 2016
- Ignazio Angeloni: Macroprudential policies to contain systemic risksKeynote speech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, SUERF/Deutsche Bundesbank/IMFS Conference on “The SSM at 1”, Deutsche Bundesbank, Frankfurt am Main, 4 February 2016
- Luc Coene: Supervisory reforms in Europe (slides from the presentation)Speech by Luc Coene, ECB Member of the Supervisory Board, at the event “Impact of regulatory and supervisory reform on the banking sector” organised by Bruegel in Brussels, 28 January 2016
- Ignazio Angeloni: Challenges and priorities for the ECB banking supervisionRemarks by Ignazio Angeloni, Member of the Supervisory Board of the European Central Bank, Banking Union Conference, Banking & Payments Federation Ireland/Mazars, Dublin, 27 November 2015
In its first year in operation ECB Banking Supervision exceeded expectations, but work is underway to bring the single supervisor of the euro area to ever higher standards. Mr Angeloni emphasises that harmonisation of the way supervision is conducted across the euro area is key. Otherwise there cannot be a level playing field which enables fair competition, a precondition for growth and prosperity. In this context the ECB Supervisory Board has identified around 120 “options and national discretions” in Union law which can be exercised by a supervisor, for which a single approach has been agreed upon. In a public consultation ECB Banking Supervision is currently seeking comments from stakeholders on two documents, a Guide and a Regulation, in which this agreement is spelled out. Mr Angeloni encourages the banking community to submit questions and suggestions during this consultation, which ends on 16 December, using the contacts on the website of ECB Banking Supervision.
Regarding day-to-day supervision, Mr Angeloni explains that business models and profitability will be key priorities in 2016. Another priority is credit risk, considering that a number of institutional credit segments exhibit a persistent high stock of non-performing loans (NPLs). Other objectives are the fostering of comparability and the quality of internal models as well as capital adequacy. Governance and risk propensity will remain a priority in 2016. These priority areas for the SSM will be further refined and will eventually be published.
Mr Angeloni underscores the importance of transparency in the way supervision is conducted. Investor decisions need to be supported by adequate information on the returns and risks involved. Some knowledge of supervisory requirements can help in this respect. To that end, an appropriate degree of disclosure on the annual supervisory exercise known as Supervisory Review and Evaluation Process (SREP) could be helpful. So far, the SSM has disclosed a broad description of a common methodology for the SREP in its Guide to Banking Supervision. Going forward, as the SREP methodology becomes more established, steps towards greater transparency will be possible.
- Ignazio Angeloni: Intervention at the opening of the Frankfurt office of the EBFIntervention by Ignazio Angeloni, Frankfurt am Main, 14 October 2015
- Ignazio Angeloni: Banking supervision and the SSM: five questions on which research can helpSpeech by Ignazio Angeloni, Member of the Supervisory Board of the European Central Bank, at the Centre for Economic Policy Research's Financial Regulation Initiative Conference organised by Imperial College Business School/CEPR, Panel 1 “Banking Supervision and Regulation”, London, 30 September 2015
The SSM has been operating for 11 months and all national authorities contribute, but none is predominant. Three features of the SSM receive less attention than others: with the SSM the ECB has been given both micro- and macroprudential responsibilities; the coexistence of national and European components in the legal basis of the SSM is a source of asymmetry, which conflicts at times with a level-playing field; and the founding regulation of the SSM – the SSM Regulation – gives it extensive powers over the banks under its direct responsibility, covering all supervisory tasks.
Mr Angeloni then highlights five areas in which research could benefit supervisors. The first area concerns financial stability – how to define it and how to measure it. Good measures of financial stability remain elusive. In contrast to monetary policy, where an extensive literature on the definition and measurement of price stability exists, no quantified objective is available for supervisors. Financial stability is multidimensional and hard to enshrine in a single notion or measure.
The second area relates to how much capital should banks hold. Answers are required for how much capital is needed in “normal” conditions, how it depends on preferences and other factors, at what point capital should be considered excessive, and why. These dilemmas are routine for banking supervisors because of their responsibility in setting Pillar 2 requirements.
The third area concerns the diversification and optimal mix of capital. As hybrid instruments are inherently complex, their use may add uncertainty to the financial system. The question is whether the additional complexity is outweighed by benefits in terms of added flexibility, better incentive structure, or lower costs.
Another question relates to what role there is for other prudential requirements. A framework is needed on how liquidity and capital requirements interact. In principle, the distinction between insolvency and temporary cash shortages is clear; but in practice, it is blurred because temporary illiquidity may lead to premature asset liquidation in stressed market conditions, and hence to losses.
A final question has to do with where – specifically, in which sub-entity of a banking group – should capital and liquidity be located. For the SSM, the problem is important because of the presence of large cross-border groups. The SSM has launched a project on harmonising national options and discretions in the CRD IV and CRR, which will increase the flexibility to manage capital and liquidity for banking groups, while still respecting basic prudential requirements.
Mr Angeloni concludes that some of these issues are very complex, and that understanding is still incomplete and evolving; which is why more research is needed.
- Luc Coene: The future of regulation in EuropeSpeech by Luc Coene, ECB representative to the Supervisory Board of the ECB, at the Deloitte Global Financial Services Networking Meeting, Dublin, 29 September 2015
- Julie Dickson: The relevance of the supervision of behaviour and culture to the SSMSpeech by Julie Dickson, Member of the Supervisory Board of the European Central Bank, at the conference "Looking forward: effective supervision of behaviour and culture at financial institutions" in the Tropenmuseum and organised by De Nederlandsche Bank, Amsterdam, 24 September 2015
Julie Dickson gives a keynote address at De Nederlandsche Bank (DNB) in Amsterdam. At a conference focussed on supervision of behaviour and culture at financial institutions, she says that DNB has taken a leading role in emphasising the role of behaviour and culture in financial institutions.
Ms Dickson then explains the importance the Single Supervisory Mechanism (SSM) places on corporate governance, noting that a key priority in 2015 was a thematic review on risk governance and risk appetite in the 123 banks directly supervised by the SSM which, she confirms, is now close to completion. She says the review is providing valuable insights, which are important for this year’s Supervisory Review and Evaluation Process process; and also for providing a basis for planning next year’s supervisory cycle.
She points out that the review has been a new experience for many banks, some of which are not used to answering the kind of questions the SSM is asking, such as why boards believe their risk appetite framework is appropriate, or why they believe the information they are getting from their management teams is appropriate. She says the review also touches on incentives, by asking questions regarding the consequences for employees within an institution of not respecting the risk appetite framework and by exploring whether the risk appetite framework encouraged the desired risk-taking behaviour.
She says that though the review is an initial one, over time, as its knowledge of each bank grows, it is to be expected that such assessments by the SSM will go deeper.
She then underlines the huge opportunities that bringing together supervisors of 19 different countries can offer and notes that the SSM is consulting the DNB to explore how to make optimum use of their staff and to better understand their approach.
She also speaks about the ECB’s position on supervisory participation in regular bank board meetings. She says that the ECB’s current view is that supervisors should meet with boards as needed to deliver supervisory messages, and may also attend part of a board meeting from time to time to watch and to see what information is being provided and what questions are being asked; but that it will not attend as a general rule.
Finally, she touches upon the challenges confronting the ECB in its work to harmonise differing transpositions of the Capital Requirements Directive. She says that when the ECB has to assess the suitability of new bank board members, it is confronted with very diverse national rules and practices. And that although it can go some way towards harmonising rules on suitability of the management body, it cannot harmonise specific items laid down in national law. She says that in areas like fit and proper assessments, it is therefore not easy to spread best practices across the 19 SSM countries. And that the ECB is seeking more changes to bank regulation in Europe.
- Julie Dickson: Will the Eurozone caucus on financial regulation?Speech by Julie Dickson, Member of the Supervisory Board of the European Central Bank, at a lunch discussion organised by the Centre for European Reform, Morgan Stanley, London, 1 September 2015
The implementation of rules by supervisors matters just as much as the rules themselves, Julie Dickson, member of the Supervisory Board of the ECB, tells an audience in London at an event organised by the Centre for European Reform.
She highlights that the emphasis being placed by the ECB on the quality of supervision in Europe is refreshing and that the day to day efforts of supervisors in addressing bank risks are key to contributing to the safety and soundness of credit institutions and the stability of the financial system.
She points to four key areas of focus: the ECB’s aim for consistent supervisory practice in the area of non performing loan recognition, coverage and write-offs; conducting a public consultation in the autumn to work towards harmonising over 150 options and national discretions available at national level; the unified application of the 2015 supervisory review and evaluation process methodology which she says, will become more robust over time as the ECB’s knowledge of the banks it supervises increases; and finally a targeted review of internal models at banks that will aim to ensure that capital held reflects underlying risks - a task she says is complex and will take several years to complete.
Ms Dickson also acknowledges that improving the quality and consistency of supervision requires not just supervisory convergence but also convergence on European bank regulation. She identifies areas where harmonising some approaches hold more challenges than others. In the area of consistently applying fit and proper requirements for members of the banks’ boards and senior management, she says the ECB is confronted with very different national rules and practices. She also cites a German draft law on banking regulation that delegates to the German Federal Ministry of Finance certain competences to issue regulations which would replace the administrative guidelines issued by the competent German authority, BaFin. She emphasises that if such practices increase, the harmonisation and the establishment of uniform conditions would be hampered significantly.
She concludes that through the Single Supervisory Mechanism, Europe is moving quickly to harmonise supervisory approaches. ‘The ECB is taking banking supervision very seriously’, she concludes. ‘It’s a challenging, full time job and we’re doing everything possible to make banking union a success.’
- Ignazio Angeloni: Exchange of views on supervisory issues with the Finance and Treasury Committee of the Senate of the Republic of ItalySpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Rome, 23 June 2015
- Ignazio Angeloni: Rethinking banking supervision and the SSM perspectiveSpeech by Ignazio Angeloni, Member of the Supervisory Board of the European Central Bank, Conference on “The new financial architecture in the Eurozone”, European University Institute, Fiesole, 23 April 2015
- Ignazio Angeloni: Towards a macro-prudential framework for the single supervisory areaRemarks by Ignazio Angeloni, Member of the Supervisory Board of the European Central Bank, Belgium Financial Forum, Brussels, 20 April 2015
- Ignazio Angeloni: The SSM and international supervisory cooperationRemarks by Ignazio Angeloni, Member of the Supervisory Board of the European Central Bank, at the Symposium on “Building the Financial System of the 21st Century: an Agenda for Europe and the US”, Eltville, 16 April 2015
- Ignazio Angeloni: Transparency and banking supervisionRemarks by Ignazio Angeloni, Member of the Supervisory Board of the European Central Bank at the ICMA Capital Market Lecture Series, Frankfurt am Main, 27 January 2015
- Ignazio Angeloni: The SSM sails past the starting line: Seeking high-quality supervision and level playing fieldRemarks by Ignazio Angeloni, Member of the Supervisory Board of the European Central Bank, International conference on “Start of European Banking Union: Perspectives and Challenges” London School of Economics and Political Science, London, 10 November 2014
- Ignazio Angeloni: Countdown to the start of the SSMSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Conference on “El comienzo de la Supervisión Bancaria Europea” - Organised by KPMG and CUNEF - Collegio Universitario de Estudios Financieros, Madrid, 31 October 2014
- Ignazio Angeloni: Ethics in finance: a banking supervisory perspectiveRemarks by Ignazio Angeloni, Member of the Supervisory Board of the ECB, Conference on “The New Financial Regulatory System: Challenges and Consequences for the Financial Sector”, Venice, 26 September 2014
- Ignazio Angeloni: Stress-testing banks: are econometric models growing young again?Speech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the Inaugural Conference for the Program on Financial Stability, School of Management, Yale University, 1 August 2014
- Ignazio Angeloni: Savings banks in the European banking landscapeSpeech by Ignazio Angeloni, Member of the Supervisory Board of the ECB, at the Financial Meeting of the Confederación Española de Cajas de Ahorros, Madrid, 18 June 2014