Brussels, 31/03/2015 (Agence Europe) - The chair of the Single Supervisory Board (SSB) at the ECB, Danièle Nouy, says that any European legislation on the structure of banking should be concerned about market making. She was speaking at the European Parliament on Tuesday 31 March.
Market making (bank activity that help companies financing themselves on the markets to find suitable financing) must always be possible, Nouy told the economic and monetary affairs committee. She said that, as a supervisor, she would prefer borders to be written very clearly in law, but supervisors also need room for manoeuvre to decide on a case-by-case basis. She said she would be criticised, but that was a responsibility she had to take on board. She approved of the traffic-light system discussed at the Council, based on the risks run by banks, in order to decide whether action was needed to change the structure of a bank (see EUROPE 11241).
In response to Bernd Lucke (ECR, Germany), who asked about the solvency of Greek banks, Nouy (formerly head of bank supervision at Banque de France) acknowledged that solutions would need to be found rapidly to lift the current uncertainty about Greek banks. She said this was not the first time they had been under stress and she was certain that they had never been as well prepared for dealing with trouble as they are now. She said the ECB was monitoring the situation very closely through very frequent telephone conference calls on cash flow and withdrawal of deposits.
Presenting the SSB's activity report for 2014, Nouy described the introduction of the supervisory arm of banking union as an “unprecedented task”, for which they had had to be set up, recruit staff and define a supervision manual in order to standardise practices at EU level. She said the aim was to “deliver comprehensive and intrusive supervision for the benefit of citizens”, recommending a fostering of harmonisation of regulatory approaches and a harmonisation of the definition of capital in order to better absorb losses. In 2015, the SSB will continue very closely to monitor credit risks such as non-performing loans and leverage. (Mathieu Bion)