If there is no surprise in the processing of the appointment, the vice president of the Bundesbank, Claudia Buch, will be the replacement of Andrea Enria, whose mandate at the head of the supervision of European banks, known as SUS (Single Supervisory Mechanism) ends this December. Buch, which has a much more political profile, also has a reputation for being tough and intrusive among financial circles, so Euro Augura Bank will be mandated with a tough supervision policy and whose first steps will be conditioned by Andrea Enria’s program.
It was on Wednesday when it became known that Buch’s candidacy would be the one chosen to be sent to the European Parliament. Although the German will still have to solve several procedures until they finally become the head of European supervision. To begin with, the European body will invite her to an appearance before the Committee on Economic and Monetary Affairs and then will put her election to a vote in a plenary session. Subsequently, her appointment will have to be finally confirmed by the Council of the European Union.
However, and due to its fame, the sector expects tougher and more invasive supervision over the next five years. Despite this fame, it also arouses certain suspicions among European banks that are related to German banks, both the small savings banks and the two large banks (Deutsche Bank was again in the spotlight when the events of March) and how appropriate it may be for these entities to have a supervisor of the same nationality.
For now, as the new supervisor, she will have to meet with the Committee of Experts, an initiative of the banks themselves, and the European Court of Auditors and launch a series of recommendations. She will also have to advance the revolution in the way of supervising European financial entities that Enria advanced, and which she will not have time to conclude, since she only has a little more than three and a half months left in the position.
In that sense, the Italian spoke of a new supervisory review and evaluation process that aimed to focus on what really matters, but that did not mean that it implied lower capital requirements, but rather a greater number of executable qualitative measures. “For example, in the area of ESG risks we have this debate about whether to act via capital, but we could also use other tools such as periodic fines until these gaps are resolved,” Enria explained.
And that would be the path set for Buch, who recently said that potentially lowering regulatory standards to achieve climate policy goals would fall outside the scope of the supervisory mandate after opposing relaxing financial rules to stimulate green investment.
Another challenge that will be faced, and that Enria has marked, is related to internal risk measurement models, where banks are provided with what is called temporary tolerance (in which they operate with models approved by the authority of origin). . In that sense, he is awaiting approval in the near future, although “the process is already very advanced,” highlighted the Italian. Finally, he will have to define how to manage the episodes of March, when the crisis of confidence broke out in the financial sector caused by the bankruptcy of banks in the United States and how a flight of deposits can be triggered at the click of a button.
Some disappointment with the non-appointment of Margarita Delgado
All in all, Buch prevailed over the Spanish Margarita Delgado, deputy governor of the Bank of Spain and with extensive experience in banking supervision and a deep knowledge of Spanish banks, and the Irish Sharon Donney, despite the fact that she has only been there for a few months, since April . il of this year, within the supervisory board of the European Central Bank. The first was a favorite among banks due to its technical nature.
Here sources from the financial sector are disappointed because they consider that an opportunity has been lost for there to be a closer relationship between the supervisor and the banks. In this decision, the excessive weight that Spain had within the European financial institutions could have taken its toll (such as José Manuel Campa at the head of the EBA, Luis de Guindos, as vice president of the ECB, Fernando Restoy, at the helm of the Financial Stability Institute and the possible presidency of Nadia Calviño of the EIB).
