In a recent speech by Claudia Buch, chair of the Supervisory Board of the European Central Bank (ECB), she discussed laying the groundwork for the next decade of the banking union.
Among the needs for a banking union, she noted that the European Commission’s proposal to improve the crisis management framework is the right direction.
She added that the Single Resolution Board (SRB) needs sufficient resources to extend the resolution regime to cover medium-sized banks. Moreover, contrary to international standards, Europe currently lacks an effective public sector backstop mechanism to provide temporary liquidity funding in resolution.
“We will of course have to make supervision, regulation and reporting as efficient as possible. However, the hope that looser supervision and regulation would pay off in the form of more growth is likely to remain illusory,” she said.