The European Court of Auditors criticizes the work of the ECB Banking Supervision in monitoring the credit risks of financial institutions. ECB supervisors need to do more to ensure EU banks adequately manage their credit risks, the European Court of Auditors said in a report published today.
Despite increased efforts to monitor credit risks and problem loans, the supervisory authorities have not made any correspondingly stricter requirements for banks with greater risks. In some cases, supervisory measures were not sufficiently tightened even when individual institutions showed persistent deficiencies in the handling of their credit risks. Overall, however, the control of credit risks by the ECB supervisors is of good quality.
They also criticized the lack of staffing in the ECB Banking Supervision
ECB against transfer of personnel sovereignty
The ECB addressed several recommendations in its response to the report. However, she rejected, as suggested by the Court of Auditors, that the ECB supervisor should decide on its own staffing independently of the monetary policy arm of the central bank.
The ECB has been responsible for controlling the big banks in the euro zone since autumn 2014, while the smaller banks are monitored by the national supervisors of the euro countries.
