04 May 2023

FT: Reading the ‘Assessment of the European Central Bank’s Supervisory Review and Evaluation Process’ so yo

If you ever want to start a fight with a bank supervisor (and who doesn’t), the epithet of choice is to call them a “box-ticker”. In context, it refers to their slightly lowly status within central banks, a presumed lack of imagination, less frequency of higher degrees in economics, and the repetitive and uncreative nature of their job.

 Like all the really deadly insults, it’s got a particle — but no more — of truth to it. The “b-word” only appears twice in the report of the experts’ group that the ECB commissioned to review its banking supervision practices. (They would never have used it as an epithet, of course — there’s one reference to “ticking all the boxes” on page 29 and one “risk of fostering a culture of box ticking” on page 55).

 But if you know how to read between the lines, it seems clear that the international experts found an absolute nest of box-tickers. It turns out that there’s a computer system at the ECB called IMAS which documents all their processes and provides boxes, forms and fields for everything. According to the experts: The design of the system dictates how [banking supervision] is executed in the field and any flexibility introduced to the process cannot become operational unless corresponding changes are made to IMAS. As supervisors spend a significant part of their time working with IMAS, its design directly affects the structure of . . . processes and may ultimately affect [the ECB’s] supervisory culture...

much more positive comment at FT

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