ECB’s Elderson: Despite Improvement, European Banks Still Face Structural Weaknesses

24 July 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Executive Board member Frank Elderson on Wednesday said that while there had been progress in European banks’ governance in the past decade, there was still more to be done to strengthen the banking system.

In a blog post on the website of the ECB, Elderson said, ‘Worryingly, there are some persistent structural weaknesses in the effectiveness of management bodies and in the quality of oversight.’

Good governance and risk culture were fundamental to keep banks safe and were thus something that supervisors strived for, he said.

‘This is even more important in the current environment, in which banks are facing economic, competitive and geopolitical headwinds, while at the same time having to manage climate and nature-related risks’, he said.

The Single Supervisory Mechanism would continue to monitor progress made by European banks to guarantee that issues were duly remediated, he said.   

‘If we see that critical findings are not remediated in a timely manner, we will use all the measures in our supervisory toolkit to ensure compliance’, he said.