How healthy are Europe’s banks two years into the pandemic?

Each year we look at the risks banks face and how well-equipped they are to deal with them. What are our latest findings? And what are supervisors most concerned about?

In this episode of The ECB Podcast, our host Katie Ranger explores these questions with Supervisory Board Chair Andrea Enria and Vice-Chair Frank Elderson.

The views expressed are those of the speakers and not necessarily those of the European Central Bank.

Published on 12 February 2022 and recorded on 10 February 2022.

In this episode:

00:58 - What are the results of our latest assessment of banks?

How Europe’s banks are faring two years into the pandemic and whether the crisis phase is over for them.

07:18 – How are banks doing on credit risk?

How prepared banks are to manage credit risk and the issues our supervisors ask them to fix.

11:21 – The big risk on the horizon: the climate crisis

How 2022 will be a big year for our work supervising climate risks and the extent to which banks are taking them into account.

15:30– Are banks’ business models sustainable?

How the digital transformation can make banks’ business models more sustainable.

18:34 – Improving banks’ internal governance

Internal governance is a weak spot for banks and the role diversity can play in ensuring sound decision-making.

23:06 – Our guest's “hot tip” for our listeners

A book recommendation related to the challenges banks are currently facing.

Additional material:

Press release: ECB requires banks to hold marginally more capital in 2022, 10 February 2022

https://www.bankingsupervision.europa.eu/press/pr/date/2022/html/ssm.pr220210~6455538b07.en.html

Press release: ECB will not extend capital and leverage relief for banks, 10 February 2022

https://www.bankingsupervision.europa.eu/press/pr/date/2022/html/ssm.pr220210_1~ea3dd0cd51.en.html

Aggregated results of SREP 2021, 10 February 2022

https://www.bankingsupervision.europa.eu/banking/srep/2022/html/ssm.srepaggregateresults2022.en.html

Speech by Andrea Enria, Chair of the Supervisory Board of the ECB, at the press conference on the results of the 2021 SREP cycle, 10 February 2022

https://www.bankingsupervision.europa.eu/press/speeches/date/2022/html/ssm.sp220210~b95041902b.en.html

The ECB Podcast: Making sure banks are run by the right people

https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod211210_episode24.en.html

The ECB Podcast: What lies on the horizon for Europe’s bank? https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod211116_episode23.en.html

Banking Supervision website

www.bankingsupervision.europa.eu

European Central Bank website

www.ecb.europa.eu