ECB’s Buch Calls for Accountability in Bank Supervision

In a speech delivered earlier this week, Claudia Buch, Chair of the Supervisory Board of the European Central Bank (ECB), called for greater accountability in banking supervision and more comprehensive evaluation of its real-world outcomes.

Buch noted that because supervisors exercise public powers independently, their actions demand rigorous accountability and transparency. While bank-specific decisions are subject to administrative and judicial review, she argued that the broader societal effects of regulation and supervision require deeper analysis. Assessing these impacts — and potential unintended side effects — demands detailed data, robust analytical frameworks, and a broader community of “watchers” to monitor supervisory actions, Buch said.

To achieve this, she stressed the importance of building the right tools, data centers, and repositories for policy evaluation. “We need to further develop the infrastructure that supports an informed debate,” Buch said. Highlighting the role of modern technology, she added, “In the age of artificial intelligence (AI), we must harness advancements in terms of computing power and analytical capabilities to advance welfare.”

Buch observed that current public debates on regulation are often disproportionately dominated by the banking industry, which tends to focus on measures that affect it directly, including the cost of capital requirements. She called for a more balanced discourse that includes the perspectives of academics, the public, savers, and society at large, who ultimately benefit from a functioning banking system but also bear the costs of financial crises.

She said evaluations of regulation and supervision must be more comprehensive. While banks are the first to feel the direct effects of supervisory decisions, the transmission channels affect society much more broadly. As such, evaluations should assess not only the direct impacts on institutions but also the broader effects on policy objectives that society cares about, such as growth, integration, financial stability, and resilience. Buch pointed to the European Commission’s recently published report on banking sector competitiveness as an opportunity to adopt this approach.

“Banks affect everyday life,” Buch said. “We therefore need to have an informed societal debate about the effects of regulation and supervision, based on evidence that can withstand serious scrutiny. This debate is needed to maintain resilience in the financial system in an environment of heightened geopolitical risks and rapid structural change due to the digitalisation of financial services.”