ECB Strengthens Bank Resilience as Pillar of European Growth

Sharon Donnery, a member of the European Central Bank's Supervisory Board, stated that the strength of financial institutions is the foundation for funding the economy. These remarks were made during the Santander International Banking Conference. The focus of supervision remains on the ability of banks to withstand various economic cycles.

The executive affirmed that resilience is a prerequisite for the competitiveness of the banking sector. The role of supervisors involves ensuring that credit reaches the real economy during both prosperous periods and times of crisis. Operational stability is viewed as a fundamental requirement for the functioning of the bloc.

The debate over regulatory simplification in Europe is gaining momentum among regulators. Pedro Machado, another supervisor at the European Central Bank, emphasized that the capital requirements established after past crises must be maintained. There is no expectation that these financial protection rules will be relaxed.

Supervision aims to reduce the complexity of the current regulatory framework. Donnery believes it is possible to improve the performance of oversight bodies without the immediate need for new legislative changes. The ultimate goal is to strengthen the banking union and move toward a more efficient single market.

Maintaining strict capital standards for European banks may increase the perception of safety in the global financial system and reduce systemic risk during moments of market volatility.