In an interview from late last month, Andrea Enria, Chair of the Supervisory Board of the European Central Bank, argues that the emphasis on capital and liquidity requirements in the wake of this year's bank failures is misguided. Instead, he encourages a greater focus on the efficacy of supervision and banks' risk management.
"When there are banking crises, the usual reaction is to start thinking about regulatory reforms," he says. "I think that in this case the main lesson is about the effectiveness of supervision and banks' internal controls, rather than regulations."
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