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The crisis has shown how important it is to do just that. How important it is to be aware of what’s going on elsewhere, of how closely markets and market participants are interconnected. After all, a crisis that breaks out on one side of the globe can quickly spread to the other.
So, being aware is one thing. But the crisis forced banks to go further; it forced to join forces – not only in overcoming problems as they arose, but also in revamping the regulatory and supervisory framework afterwards. This happened at the global level – Basel III – and at the regional level.
In Europe, policymakers went further than anywhere else. At the height of the crisis, they decided to set up a banking union. The first step was to take banking supervision from the national to the European level. So, in 2014, the ECB became responsible for supervising banks in the euro area.
There are plenty of risks that interact in complicated ways. Sabine Lautenschläger didn’t address all the risks that exist but focused on just a few. From risks from the outside - she focused on non-performing loans, Brexit, geopolitical uncertainties, market risks or technological progress risks.
From risks from the inside - she focused on misconduct, money laundering, governance risks or ethical behaviour.