Member of the European Central Bank (ECB) Executive Board Frank Elderson noted on Wednesday that the European banking system is resilient and stressed the importance of ensuring it remains so as that would solidify the Eurozone's competitiveness and economic expansion.
Speaking at the European Financials Conference organized by Morgan Stanley in London, Elderson attributed that strength to "robust regulatory guardrails and rigorous supervision" that has resulted in "higher capital and liquidity buffers, improved risk management and better governance." Still, he also warned about the risks embodied in geopolitical crises, tariffs, and climate change.
"A completed banking union, including the establishment of a European deposit insurance scheme and a fully integrated capital markets union, would help eliminate barriers that still hinder market integration and would ensure that the financial system fosters both stability and growth. The path to greater competitiveness does not therefore lie in deregulation but in further European integration," he concluded.
