European Commission's draft report calls for 'cultural shift' by the EU's banks, regulators, and auditors
The European Commission will call on the EU’s financial institutions and supervisors to take on more risk, according to a draft report, as Brussels steps up efforts to boost the competitiveness of the bloc’s banking sector.
A draft of the EU executive’s much-anticipated report on banking competitiveness, seen by Euractiv, states that revitalising Europe’s financial sector will require a “cultural shift” away from the current “zero-risk tolerance” of bank managers, regulators, and auditors.
“Improving the competitiveness of the EU single market for banking can foster the competitiveness of the EU economy,” states the report, which is set to be officially released in July. “Yet, this also requires a cultural shift by all stakeholders in the banking market.”
“Regulators and supervisory authorities should focus on material risks that matter most for overall financial stability, avoiding a zero-risk tolerance as this could hinder banks in supporting the economic activity and investments necessary for Europe’s competitiveness,” it adds.
