Claudia Buch, head of banking supervision at the European Central Bank (ECB) since January 1st, is urging financial institutions to be vigilant in the face of an uncertain environment: Banks are “better capitalized and more resilient today than at the beginning of the banking union ten years ago,” she said, according to a previously published text of the speech on Monday. But: “There is no reason for complacency.”
Structural change in the real economy, emerging risks, digitalization and increased competition might call business models into question. There are signs that the asset quality of major institutions is beginning to deteriorate. Until the end of 2022, there was an almost continuous downward trend in the rate of loans that were no longer being serviced. This has increased slightly once more since 2023.
