HANDELSBLATT EXCLUSIVE

German Auditors Sound Alarm on ECB Oversight

  • Why it matters

    Why it matters

    Without independent auditing, there’s no way to know whether or not the ECB is fulfilling its new role overseeing the euro zone’s big banks.

  • Facts

    Facts

    • In 2015, the responsibility for overseeing the 120 largest banks in the euro zone shifted from national regulators to the ECB.
    • The Federal Court of Auditors, an independent German body, said its European counterpart, the European Court of Auditors, is currently unable to review the ECB’s regulatory activities.
    • There are concerns that the ECB may not being keeping close enough tabs on the euro zone’s big banks, and that the central bank might face a conflict of interest due to its dual role as a regulator and a monetary policymaker.
  • Audio

    Audio

  • Pdf
Europäische Zentralbank
Germany is worried about the lack of accountability at the ECB. Source: DPA.

Germany’s federal auditor is concerned that the European Central Bank lacks accountability in its oversight role in the banking sector, according to a parliamentary report obtained by Handelsblatt.

In a report submitted to the German parliament’s budget committee, The Federal Court of Auditors, an independent body, says its E.U. counterpart, the European Court of Auditors, is unable to perform “an extensive review of the bank supervisory functions” at the ECB.

In its report, the federal auditor says bank oversight is an important public function that does not fall under the rubric of central bank independence, noting that national banking regulators like Germany’s had previously been fully audited before the ECB took over the responsibility in 2015.

The federal government should explore all options for closing this oversight gap,” the report said.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.