Nouy Says ECB on Track With Unprecedented Bank Oversight TaskJeff Black and Joe Brennan
European Central Bank Supervisory Board Chair Daniele Nouy said preparations to assume oversight of euro-area lenders are going according to plan.
“We are working very intensely to meet the objectives and we are well on track with achieving them,” Nouy said during a speech in Dublin today. “For the first time in the history of the European Union, we will have a supervisor with a truly European mandate. It will reduce regulatory arbitrage and remove national biases. As a result, we will enhance confidence in the supervision of banks and in the whole financial system.”
The Single Supervisory Mechanism will start wielding power over banks on Nov. 4. as the first pillar of the nascent European “banking union” that was conceived to prevent future crises. In the meantime, the ECB is conducting an unprecedented health check on the region’s lenders, including a stress test, which is scheduled to deliver results in October.
“In addition to the Comprehensive Assessment of the significant banks required by the SSM regulation, an exercise of unprecedented magnitude, we are working on establishing the basis of a fully functioning mechanism,” Nouy said. “You can imagine the challenges we are currently facing to get our ‘start-up’ fully running.”
Nouy said the tasks that must be completed in time include harmonized practices for supervision of banks, hiring and training, and setting up of new computer systems.
As around 6,000 auditors and supervisors conduct the asset review, the ECB is pressing on with hiring the approximately 1,000 new staff required to conduct oversight from Frankfurt. Nouy said recruiting campaigns should be concluded before the end of the summer.
“We are looking for the best possible candidates,” she said. “This has raised much interest, as we have received so far over 14,000 SSM-specific applications.”