(Finance) – “The hard work carried out in recent years to make euro area banks more resilient has borne fruit. Banks have maintained solid capital positions, with an aggregate Cet1 ratio of 15.6%, close to its historical highs. This helped protect the sector from external shocks and allowed banks to efficiently transmit the ECB’s monetary policy tightening to the economy. But several challenges remain”.President of the ECB, Christine Lagarde in the introduction to the annual report of the institution’s Banking Supervision branch, which is presented to the European Parliament this morning. The costs that banks have to bear in terms of increases in customer deposit rates are rising, as are non-performing loans.
“The supervisory authorities will continue to monitor these risks, in particular they will keep an eye on exposures to vulnerable sectors, such as real estate, and address risks in banks’ governance and internal control systems,” he continues. “Resilience and adaptability they will be crucial to deal with the structural challenges posed by digitalisation and climate change – says the ECB president -. And as the use of AI becomes more widespread, authorities will continue to track banks’ digitalization strategies and their resilience to attacks.”
Lagarde: the resilience of euro area banks among successes, challenges and future strategies
