Several top European Central Bank (ECB) officials have advocated for scaling back the central bank's supervisory role to reduce regulatory burdens on Europe's lenders, as reported by Bloomberg.
These officials have urged a newly formed ECB Task Force to revisit the criteria that determine whether a bank is "significant" and should fall under direct ECB oversight. A "meaningful reduction" in the number of banks supervised would mark the most substantial change since the ECB's Single Supervisory Mechanism was created after the global financial crisis.
Currently, 114 major banks are directly supervised by the ECB. Banks exceeding thresholds like €30 billion in assets face intensive scrutiny, which some argue places a disproportionate burden on smaller institutions. Options under discussion include raising those thresholds or excluding banks from smaller countries.
Among the members of the task force are ECB Supervisory Board member Sharon Donnery and Bank of Finland Governor Olli Rehn. Donnery has insisted that "the hard-won resilience after the financial crisis must be protected," while Rehn has emphasized the need to balance "financial stability and innovation." ECB Vice President Luis de Guindos stressed that the Task Force "should not be confused with deregulation."
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