Bundesbank symposium: Focus on geopolitical risks and simplifying regulation

This year’s Bundesbank symposium “Banking supervision in dialogue” focused on geopolitical risks, artificial intelligence and streamlining bureaucracy. Corinna Egerer and Philipp Otto were the hosts of the event, which was held in Frankfurt and attended by around 450 supervisors and banking industry representatives. In his speech, Bundesbank Executive Board member Michael Theurer addressed both the burden on banks caused by regulation and bureaucracy as well as the benefits. He saw regulation as being necessary to ensure confidence and stability in the business sector even though it generates costs. He believed it to be important to have a nuanced debate on regulation in order to increase efficiency and reduce red tape” without lowering standards. “Banking regulation and supervision naturally create costs for institutions, Mr Theurer said. However, their benefits for society and the economy exceed the costs. Mr Theurer also addressed criticism in his speech, mentioning, amongst other things, how regulation and supervision could be optimised, such as by simplifying capital requirements.  He made it clear that the burden of compliance needed to be reduced, yet without watering down standards.  He also said that he could envision a regulatory regime which simplified various EBA guidelines. “We are calling for the CRR and CRD to be made more principles-based rather than rules-based in future.” The Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR)...