(Bloomberg) — Bundesbank Vice President Claudia Buch’s bid to become the continent’s top banking regulator won the backing of a key group of European lawmakers.
(Bloomberg) — Bundesbank Vice President Claudia Buch’s bid to become the continent’s top banking regulator won the backing of a key group of European lawmakers.
The European Parliament’s Economic and Monetary Affairs Committee voted to approve Buch as chair of the European Central Bank’s Supervisory Board. Buch received 29 votes with 23 voting against her appointment.
The appointment must still be confirmed by the parliament’s plenary and signed off by European Union governments.
Buch wasn’t Parliament’s first choice. Earlier Wednesday, lawmakers expressed concern that her nomination by the ECB’s Governing Council disregarded their own endorsement of a Spanish competitor for the job. In a hearing in Brussels, the German defended her credentials and dedication to the prospective role, adding that it wasn’t for her to comment on the appointment process.
In her testimony, the Bundesbank vice president said she’d continue reforms kicked off by the ECB’s current head of banking supervision and focus on adapting to new risks and an unpredictable economic environment.
Banks, she said, don’t take sufficient account of the potential fallout from geopolitical and macroeconomic developments as well as climate change. She also cited pressure on lenders to take “excessive risks” as digital technology allows competitors from outside traditional banking to eat into their profits.
The Bundesbank executive said she’s committed to ensuring the financial health of European lenders, telling lawmakers that “strong supervision must ensure that banks are well governed and have sufficient capital and liquidity buffers.”
Buch said she’d continue efforts that the ECB has begun to overhaul its banking-supervision arm, known as the Single Supervisory Mechanism.
Supervisory Board Chair Andrea Enria will step down at year-end. In an interview this month with Bloomberg, he outlined plans to ease the burden of banks’ annual risk reviews and move away from higher capital requirements as the default tool for pushing lenders to fix problems.
Buch said digital technology can also make the watchdog more efficient and that she’ll work to simplify risk reviews — a process that’s been faulted by banks and regulators alike as cumbersome.
“We can build on a culture in the SSM that promotes intrusive supervision,” she said. A new approach being kicked off by Enria to focus on the most relevant issues facing banks “sets the focus on relevant risks,” Buch said.
–With assistance from Alonso Soto.
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