Frank Elderson, ECB Vice-Chair, outlined the resilience of European banks during recent shocks and detailed plans for simplifying supervision and strengthening financial stability through 2028.
Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board, addressed the Committee on Economic and Monetary Affairs of the European Parliament. He highlighted the resilience of European banks during recent crises, including the COVID-19 pandemic, the war in Ukraine, and inflationary pressures.
He emphasized that proactive risk management and supervisory measures have helped banks absorb shocks and continue supporting the economy. The ECB plans to further simplify and streamline supervision to enhance efficiency and effectiveness, focusing on material risks and reducing unnecessary compliance burdens.
Key priorities for 2026-28 include strengthening resilience against geopolitical and macro-financial shocks, assessing risks related to climate and physical risks, and ensuring operational resilience amid digital transformation. The ECB also aims to incorporate risks from artificial intelligence and crypto-assets into risk management frameworks.
Recent reforms, including the implementation of the SREP reform, aim to improve supervisory effectiveness without lowering standards. The ECB advocates for completing banking union, including a European deposit insurance scheme, to enhance resilience and reduce fragmentation. It also supports initiatives to deepen financial integration and strengthen competitiveness through a single market and integrated capital markets.
Mr. Elderson concluded by stressing the importance of early risk identification, decisive action, and maintaining a risk-based, proportionate, and simplified supervisory framework. He expressed willingness to continue working with the Parliament to safeguard Europe’s financial stability.
