Sabine Lautenschläger

ECB to Beef Up Banking Supervision Staff

Sabine Lautenschlaeger DPA MAArk tirl
Sabine Lautenschläger was vice president of the German Bundesbank from 2011 to 2013. Source DPA, Marc Tirl
  • Why it matters

    Why it matters

    • Supervision has been more demanding than expected, according to Ms. Lautenschläger, but plans to increase staff numbers should help in the coming year.
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  • Facts

    Facts

    • The ECB’s Single Supervisory Mechanism (SSM) was launched in November 2014. It gives the bank a key role in monitoring the financial stability of banks in the Eurozone.
    • The new European central credit register, Anacredit, will capture detailed data on any loan over €25,000.
    • The ECB’s banking supervisory arm is growing fast – next year alone, it will hire nearly 200 new staff.
  • Audio

    Audio

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Sabine Lautenschläger has been supervising banks for 20 years, first for the German authorities, now on a European level. Last year, she was appointed to the board of the European Central Bank, with responsibility for banking supervision.

She has been in charge of the Single Supervisory Mechanism, or SSM, since its launch in late 2014. The SSM is the mechanism by which the ECB monitors the financial health of Eurozone banks

Ms. Lautenschläger’s office in Frankfurt’s Japan Tower is piled high with folders. She has an ingenious system to deal with the mammoth task of bank monitoring, she explains before the interview. On the desk are pending cases, color-coded into urgent and less-urgent piles. More folders are stacked on the sideboard: key background information. Ms. Lautenschläger often moves between this office and the ECB’s other Frankfurt location, sometimes several times a week. When she does, she takes the piles of folders with her in a suitcase.

In her interview with Handelsblatt, Ms. Lautenschläger claims tighter financial surveillance is in everyone’s interest.

 

Handelsblatt: Ms. Lautenschläger, it’s almost a year since the European Central Bank began formally supervising the financial stability of European banks. How has it gone so far?

Sabine Lautenschläger: It has been a successful year, but a stressful one too. We have come a long way towards better supervision and increased stability for European banks, for example in risk analysis and capital requirements.

How does the new European supervisory system, the “Single Supervisory Mechanism” (SSM) cope with differences in national supervisory regimes?

Every day in my current position, I learn about how European law is being integrated into national legal frameworks, and about how national supervisory bodies are applying European rules alongside national ones. But the differences are larger than I had expected.

The German government has been criticized for its handling of European bank supervision requirements. Is Germany being stubborn on this?

I’ll give you a concrete example. Among other things, “MaRisk,” the “Minimum Requirements for Risk Management” laid out by the German financial regulatory authorities, sets out rules for banks’ internal controls and internal risk management procedures. The German finance ministry will probably reserve the right to convert what were administrative guidelines into German law. Unlike with national administrative practices, we are obliged to directly apply that law, with no leeway to change it. So what were previously just guidelines from the supervisory authorities will now become binding law, but only applicable to Germany. That could make it more difficult for the SSM to introduce a single supervisory regime across the whole euro zone. Things like that send a dangerous signal to other countries.

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