Remarks by the Senior Deputy Governor of the Bank of Italy and President of the Institute for the Supervision of Insurance (IVASS) Salvatore Rossi regarding experience with SSM and Banking Union and challenges ahead.
In an incredibly short timeframe:
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a comprehensive framework for banking supervision and crisis management in the euro area has been designed and put in place;
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thousands of experts are working together to achieve common goals;
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methodologies, tools and resources have been pooled in order to benefit from the best national practices;
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cooperation between the centralized hubs (in Frankfurt and Brussels) and the national authorities has been fruitful, even in the case of disagreement.
Last but not least, banks in the euro area are now stronger than 10 years ago.
This positive experience shows that the challenges ahead can be successfully addressed in a pragmatic way.
Banking supervision needs to be constructive, not destructive. This is always true, but in the euro area today it needs to be constantly remembered. Prudential rules and practices should be strict but proportionate, and they should always keep the playing field level. We should also take into account the competitive conditions between our banks and banks outside the euro area.
We live in times of rapid change in the way financial business is conducted around the world. The application of technology to banks and other financial companies is revolutionizing the market. Supervisors need to look forward as much as they can. European supervisors, and legislators behind them, need to be particularly forward-looking in their commitment to operate a brand new system of common banking supervision and crisis management. They have to adjust it as drawbacks and innovations emerge.
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