Mr. Branson, Silicon Valley Bank has collapsed in the United States, stoking fears of a new banking crisis. What are the issues that worry you the most right now?
Markus Frühauf
Editor in business.
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Inken Schönauer
Editor in economics, responsible for the financial market.
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The risks of a rapid rise in interest rates, especially for certain smaller banks, have long been on our radar. Recent developments in the US show that the issue is not a chimera. For the German financial market, however, we do not see any direct risk of contagion from the problems in the USA. In addition, it shows that the German banking system has so far been able to digest the effects of the jump in interest rates well. And in principle, higher interest rates are good for banking. We also focus on the real estate markets. Especially in the case of commercial real estate, we are dealing with high financing volumes, if something goes wrong, it arrives in the banking system. We must identify such developments as early as possible and take countermeasures. Which we have already done with the two macroprudential capital buffers. But the ever-increasing cyber risks should not go unmentioned.
Are you worried about the banks?
The tightened capital and liquidity requirements following the great financial crisis have helped a lot. We have seen this more strongly in the last few years: the banks have been able to withstand the pandemic and the consequences of the Ukraine war.
There are bank executives who perceive regulation as excessive.
This discussion is as old as banking regulation itself. I see no need for action on calibration, which is not overly harsh in Europe. Rather, I see a possible need for action in the complexity of European regulation. There doesn't have to be a new rule for every new problem. There is also the question of proportionality: small institutions operating only in their regions suffer particularly from complexity. This is a competitive factor because the complexity of regulation increases fixed costs. But again, there is no time to talk about weakening the level of security.
Could a European banking and capital markets union reduce complexity?
You have to want them. It sometimes strikes me that in Europe more energy is put into competition between financial centres than into the effort to create a larger European capital market. In any case, the banks have benefited from common European supervision. In Europe, there are common rules for the big banks, a level playing field, and that is a good thing.
What about the grey capital market? Here, the Bafin has long retreated to not being responsible for it, but at the same time awarded the sales brochures as in the container rental P&R their seal?
We only check such prospectuses for completeness, not for associated risks. Such an unregulated market for financial investments, such as the grey capital market in Germany, is unique in Europe. The providers of such products have a lot of freedom without corresponding intervention possibilities of the supervisory authorities.
Would you like to see the grey capital market abolished?
This can only be a political decision.
How can the success of a financial supervisory authority be measured?
This is actually difficult to measure and sometimes not made visible, because good supervision must act preventively. It is intended to prevent damage before it occurs. This means that we do not know what could have happened without our intervention. But everyone can see what happens anyway. "There is no glory in prevention".