Interview with Die Presse

Banks frequently cite high regulatory costs, but the ECB argues these expenses are outweighed by the broader economic damage avoided since the 2008 financial crisis. European banks are now better capitalised and more resilient, though the supervisory framework has grown complex due to diverse risks including geopolitical tensions, cyber threats and climate change. The ECB acknowledges the need to simplify rules without compromising stability, pointing to measures already taken such as reduced reporting obligations and streamlined processes.

Fragmentation within the EU banking market remains the biggest obstacle to competitiveness, according to the ECB, as cross-border activities remain limited and banks cannot fully exploit economies of scale. The ECB emphasises that integration—not deregulation—is the solution, calling for completion of the Single Market, savings and investments union, and banking union, including a European deposit insurance scheme. It stresses that simplification and integration must advance simultaneously to enhance competitiveness.

The ECB highlights that a fully integrated banking market would foster greater competition, better products and improved risk sharing, enabling banks to fund future-oriented investments. It notes that differences in legal frameworks, insolvency regimes and consumer protection rules unnecessarily complicate cross-border banking. The ECB urges urgent removal of these obstacles, warning that Europe cannot afford delays given the scale of investment challenges ahead.

On artificial intelligence, the ECB recognises AI’s potential to improve risk management, fraud detection and efficiency but warns of heightened cyber risks. It has instructed banks to reassess cybersecurity measures and submit action plans by the end of October. The ECB also cautions against over-reliance on AI models, stressing that banks must maintain sound governance and risk management despite technological advancements.