Risk reduction measures in the EU banking sector

Published: 9/9/2018

The European Banking Union can only function if risk reduction and risk sharing measures are implemented hand in hand. Decision- and public policy-makers must agree on simultaneous measures for reducing risks faced by banks and private risk sharing via the banking channel. In addition to agreeing on a relationship between the two measures it is also important to agree on the speed of change. This was the conclusion of the Eurofi panel the Risk reduction measures in the EU banking sector in which Boris Vujčić, the Governor of the Croatian National Bank, took part.

The participants of the panel discussed, among other things, how far the reduction of bank risks should go in the sense of non-performing loans (NPLs), or should some additional measures be introduced in the European banking sector, before engaging in a risk sharing with the private sector via the banking channel. The participants of the round table also discussed whether the existing EU initiatives for risk reduction in bank operations were sufficient to encourage banks with high levels of NPLs to implement ambitious and realistic NPL strategies, that is, to strengthen the secondary markets for NPLs.

The panel was moderated by Mr Klaas Knoot, President of the De Nederlandsche Bank and in addition to the CNB Governor the participants included Sharon Donnery, Deputy Governor of the Central Bank of Ireland, Andrea Enria, the Chairperson of the European Banking Authority, Pablo Hernandez de Cos, the Governor of the Banco de España, Andrei Magasiner, Corporate Treasurer of the Bank of America, Fabrizio Saccomanni, Chairman of UniCredit S.p.A., and Tomas Varela, General Manager, Chief Financial Officer of the Banc Sabadell.

Eurofi – the European think tank dedicated to financial services held its this-year's forum, hosting the leaders of the regulatory and the commercial financial sectors, on 5 – 7 September in Vienna, in association with the Austrian EU Council Presidency.