Shortly after the Lehman Brothers bankruptcy helped spark the global financial crisis in 2008, Germany’s financial regulator Bafin put the country’s banks on a short leash.
From then on, high-ranking Bafin officials started regularly taking part in the supervisory board meetings of large German banks. Regulators shouldn’t merely inform themselves “about important strategic decisions by reading documents alone at their desks, but rather at the bank,” said former Bafin President Jochen Sanio at the time.
But now German bank managers can breathe a little easier: The new European banking supervision under the direction of France’s Danièle Nouy breaks with German tradition.
The European Central Bank has decided to take part in supervisory board meetings only sporadically when considered necessary, Handelsblatt has learned from regulatory sources.
“There’s guidelines about it for the director general level,” said a source familiar with the new procedure.
Since the near-collapse of Hypo Real Estate, German financial regulators have followed important lenders particularly closely. Bank watchdogs from Bafin and the Bundesbank have often visited the board meetings of Deutsche Bank and Commerzbank. But that constant supervision is now set to end.