Supervision Newsletter - August 2022
"One has to be prepared for the unexpected"
Anneli Tuominen, Member of the ECB’s Supervisory Board, shares the lessons we learned from the war in Ukraine and reflects on the efficiency of data reporting. She stresses that a constructive dialogue with banks is key for keeping the European banking sector stable.Full interview
Commercial real estate: connecting the dots
The commercial real estate sector has been hit hard by the pandemic. Reviews show that banks should improve their collateral valuation practices and still struggle to collect accurate data for climate risk effects. However, they also revealed some good practices had been applied.Full article
Are banks prepared for interest rate and credit spread shocks?
As we exit the low interest rate environment, banks are becoming more sensitive to interest rate and credit spread risks. The preliminary results of a targeted review show that trading book-related risks are limited, but some banking book exposures could lead to losses.Full article
Licensing of crypto-asset activities
Some banks need a licence to conduct crypto-related activities and we have taken steps to harmonise the assessment of related requests. Supervisors will focus on business models, internal governance and the level of experience of managers or board members.Full article
Supervisory expectations for prime brokerage services
The ECB stresses that banks should have sound risk management, strong governance and a proper risk culture if engaging in prime brokerage services. This can help them face risks in a highly competitive and somewhat opaque business environment.Full article
Has banking union stood the test of time?
The joint ECB and SRB conference discussed the achievements of the banking union and what steps could be taken to strengthen the crisis management framework. We also explored the future of banking and debated steeling banks against tomorrow’s challenges.Full article
Banks’ capital ratios and liquidity coverage ratios down in Q1 2022
Capital and leverage ratios were lower in Q1 2022 compared to in Q4 2021. The CET1 ratio decreased to 14.98% from 15.57%, while the leverage ratio declined to 5.68% from 6.03%. The falls were driven by a surge of €1.37 trillion in assets. The liquidity coverage ratio stood at 167.5% in Q1 2022, compared to 173.5% in Q4 2021.Supervisory banking statistics
Did you know...
… that you can find all you need to know about climate change and banking supervision in one place on our website? Whether you’re an expert or a beginner, take a look and learn all about our work in that area. How are banks managing climate-related risks and how are we helping them prepare for the future? Come back for regular updates on analyses and supervisory guidance, including insights and comments from ECB decision makers.Climate change and banking supervision
- 13 September 2022
Elizabeth McCaul at Barclays Global Financial Conference
ECB representative to the Supervisory Board will provide insights on banks’ risk outlook, digitalisation as well as environmental, social and governance (ESG) risk management.
- 14 September 2022
Elizabeth McCaul at ECB’s Supervision innovators conference
ECB representative to the Supervisory Board will speak about the impact of suptech on European banking supervision.Conference programme
- 19 September 2022
Andrea Enria at Single Resolution Board Annual Conference 2022
The Chair of the Supervisory Board will take part in the panel discussion “Testing times: building up crisis management”.
- 22 September 2022
Anneli Tuominen at Institute for Law and Finance’s Banking Union Conference
ECB representative to the Supervisory Board will discuss regulation and ESG principles.
- 29 September 2022
Frank Elderson at OMFIF Conference
The Vice-Chair of the Supervisory Board will speak about integrating biodiversity into financial markets.
- 29 September 2022
Elizabeth McCaul at The Future of Central Banking conference by Bank of Lithuania and BIS
ECB representative to the Supervisory Board will elaborate on regtech and innovation.
- 11 October 2022
Andrea Enria at Institute of International Finance
In a fireside chat, the Chair of the Supervisory Board will discuss the risk outlook for banks.
- 8 August 2022
Interview with Edouard Fernandez-Bollo in Euromoney
The ECB supports further European integration and sees room for banks to improve resilience and profitability through consolidation.Interview
- 26 July 2022
Interview with Elizabeth McCaul in Börsen-Zeitung
Leveraged loans remain in focus, and European supervisors are discussing how to recognise dynamic balance sheet implications in stress testing.Interview
- 8 July 2022
Press release on climate risk stress test results
Climate stress test results show banks still have a lot to do. We will guide banks through the green transition, helping them to boost climate resilience while moving towards a net-zero economy.Press release
- 7 July 2022
Speech by Andrea Enria on war and interest rate normalisation
The supervisory priorities we set out last year are still key, although circumstances have changed dramatically. Our business-as-usual policy on bank-specific distributions is also discussed.Speech
- 22 June 2022
Speech by Frank Elderson on climate risk
A look at the progress on both the international agenda and the ECB’s own supervisory agenda on climate-related and environmental risks.Speech
- 14 June 2022
Speech by Elizabeth McCaul on supervisory priorities and securitisation
Our supervisory priorities are more relevant than ever. Securitisation can help manage the investment needed for the green and digital transitions, bridging gaps between banks and capital markets.Speech
- 11 June 2022
Speech by Frank Elderson on behaviour and culture in banks
Behaviour and culture influence banks’ decision-making. Banks are well advised to identify harmful behavioural patterns and act upon them.Speech
- 8 June 2022
Interview with Andrea Enria in Expansión
It’s possible for banks to provide good customer service while improving cost efficiency by closing branches and enhancing digitalisation. Digitalisation frees up resources to help those who are less tech-savvy.Speech
- 24 May 2022
Blog post by Elizabeth McCaul and Edouard Fernandez-Bollo on anti-money laundering
Anti-money laundering authorities and banking supervisors need to work closely with one another. The new European anti-money laundering authority will play a key role in this effort.The Supervision Blog
- 20 May 2022
Interview with Kerstin af Jochnick in Dagens industri
We must closely monitor the effects of the war in Ukraine on European banks. Also, if interest rates rise, it will probably be positive for banks provided there is growth – but higher rates would also hit borrowers in some sectors.Interview
- 19 May 2022
Blog post by Andrea Enria on the desk-mapping review
Banks relocating to the EU after Brexit need adequate local governance and risk management capabilities. Our review shows these banks don’t yet have full control over their balance sheets.The Supervision Blog