European Central Bank's Sharon Donnery advocates for harmonised banking rules

by@ecb

Summary

In an interview with banko.ro, ECB Supervisory Board member Sharon Donnery emphasized the necessity of harmonized banking rules to achieve a truly integrated EU Single Market, pointing out that a common rulebook would facilitate cross-border investments and reduce national barriers. She noted that the completion of the banking union is vital for this endeavor, as it would involve creating robust safeguards such as a common deposit insurance scheme, essential for financial stability across Member States. Donnery also addressed the role of the ECB's next-level supervision initiative in streamlining processes while maintaining high capital requirements, ensuring that banks can support sustainable economic growth through resilience and confidence in their operations.

Analysis

Sharon Donnery: Sharon Donnery is a member of the Supervisory Board of the European Central Bank, where she contributes to banking supervision policy and previously led the ECB's High-Level Task Force on Non-performing Loans. The interview features her perspectives on reconciling national barriers with a harmonised EU rulebook, managing geopolitical risks, and ensuring resilience amid structural changes in European banking. European Central Bank: The European Central Bank serves as the central bank for the euro area, overseeing monetary policy and prudential supervision of banks through the Single Supervisory Mechanism. In this interview, ECB Supervisory Board member Sharon Donnery discusses the institution's efforts to streamline supervision while upholding capital standards and advancing initiatives like the digital euro. Digital Euro: The digital euro is being designed as a means of payment that complements cash, with safeguards such as holding limits and a reverse waterfall mechanism intended to limit deposit disintermediation risks for commercial banks. Banking Union: Completing the banking union with harmonised rules and safeguards like a common deposit insurance scheme would reduce the need for national capital and liquidity ring-fencing across EU Member States. Supervisory Priorities: The ECB has formally included geopolitical risk management among its supervisory priorities for 2025-27, prompting banks to enhance forward-looking scenario analyses beyond direct exposures.

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macropolitics
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