Wednesday , October 5 2022

Andrea Enria has become the highest banking supervisor


FrankfurtThe Council of the European Central Bank on Wednesday made an important decision that, in exceptional cases, had nothing to do with monetary policy. The committee voted in secret by electing Andrea Enri as the future ECB supervisor.

The race between the two was completely open at the run. Enriu spoke many years of European experience and the Proporz nationality. 57-year-old Eba for seven years and sets technical standards for bank regulation.

In addition, Italy will lose some European top positions this year, ending the term of ECB head Mario Draghi, EU foreign policy chief Federica Mogherini and President of the European Parliament Antonio Tajani.

Sharon Donnery gained points with her experience at the Irish Central Bank. Moreover, only a few important ECB posts are occupied by women. For example, 23 out of 25 members of the Governing Council are men. The European Parliament and the ECB itself have long advocated a higher proportion of women in managerial positions.

Donnery also manages the ECB's working group for troubled loans. Manipulating with him will probably be one of the key issues of banking supervision over the coming years – and there has also been a heated debate about the choice between Donnery and Enriah.

"The high number of default lows in Europe is a problem that we have not yet resolved," said Bafin, Federal Finance Court President Felix Hufeld, in an interview with Handelsblatt in September. This is a "big mortgage". Loans are considered to be at risk if repayments or interest are payable for at least 90 days.

Banks in the euro area still carry bad loans totaling € 657 billion, mainly as a result of the financial crisis in 2008 and 2009. Heavily affected are southern European countries – especially Italy. A high rate of bad credit is seen as a major brake on growth, as it means that the banks concerned tend to provide more hesitant loans.

To address this problem, the ECB wants to agree with banks on individual plans to determine how quickly they need to reduce bad credit. In terms of Hufeld, it is now important that the adopted rules are consistently applied and not diluted.

The German Financial Supervisory Authority has clearly stated before deciding to live with both candidates. Sharon Donnery's hard attitude towards reducing bad loans is meeting with approval in the Federal Republic. However, Enria trusts bank supervisors to resolve this issue.

Concerns of some critics, Italian Enria might be somewhat lenient on the subject, insiders do not share it. They point out that Enria has shown a strong attitude towards bad credit during its time in Ebe.

In addition, German regulators also worked well as Andrea Enria as Eba's chief. They felt Enria was acting independently of Eba, focusing on EU interests – not on his native Italy. Some even considered that the Italian government did not support his candidacy as a recommendation for him.

Following the vote in the ECB Council, the Italian Enria must now be endorsed by the European Parliament and endorsed by EU leaders. However, this is considered a formality.

The Economic Committee of the European Parliament has already consulted the candidates and then recommended Donnery and Enriu. However, French driver Robert Ophèle failed.

Enria's choice could also have an impact on other personnel decisions. For example, the head of Irish central bank Philip Lane is considered a promising candidate for the post of chief economist Petra Praeta, whose mandate ends in May 2019. His chances are likely to increase by selecting Enrias.

Ireland is the only founding member of the euro, which has never had a representative of the Central Bank's board of directors. If Donnery was elected as Newy's successor, it would probably reduce Lane's chances, as it could be difficult to get two Iranians to the highest positions in the ECB.

Lane probably has a chance to get up. At the end of a personal trip, Sharon Donnery could continue to benefit from it and inherit Lane, head of the Irish Central Bank.

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