Claudia Buch becomes the new head of the ECB Banking Supervision

Claudia Buch

According to insiders, the economist had the support of ECB President Christine Lagarde.

(Photo: imago images/IPON)

Frankfurt, Berlin Claudia Buch is likely to become the top bank controller in the euro zone. The majority of the Council of the European Central Bank (ECB) voted in favor of the Bundesbank Vice President in a secret vote, the central bank announced on Wednesday.

If the European Parliament and the Council of the EU approve the appointment as expected, Buch will take over as head of ECB banking supervision at the beginning of 2024. She succeeds the Italian Andrea Enria, who is stepping down at the end of December.

“I am very pleased about the trust of the Governing Council of the ECB and about the next steps in the process at European level,” said Buch.

The ECB Banking Supervision has been responsible for monitoring the largest banks in the euro zone since autumn 2014. In Germany, in cooperation with the Bundesbank and the financial regulator Bafin, it controls, among others, Deutsche Bank and Commerzbank.

Margarita Delgado, Vice President of the Spanish Central Bank, also applied for the head position at the ECB Banking Supervision. After an informal hearing before the Economic and Monetary Affairs Committee of the European Parliament (ECON), the political group coordinators spoke out in favor of Delgado in July. The decisive factor for this was Delgado’s long experience as a bank supervisor.

For the same reason, some financial managers also believe that Delgado would have been a better choice. Other decision-makers, however, found it positive that Buch is not only a supervisor but also a macroeconomist.

Book wants to further develop “critical supervisory culture”.

According to financial circles, ECB President Christine Lagarde also promoted Buch. After the decision in the ECB Council, Buch will now have a public hearing in the Economic and Monetary Affairs Committee of the EU Parliament.

“There is no question that Claudia Buch is an excellently qualified candidate,” said parliamentarian Markus Ferber from the EPP. Nevertheless, it is surprising that the ECB did not follow the Economic and Monetary Committee’s clear recommendation for filling the post.

Buch has been Vice President of the Bundesbank since 2014 and has dealt a lot with the issue of financial stability there. In April, the economist, who holds a doctorate, also took over responsibility for banking supervision on the board.

The 57-year-old attaches great importance to the precise evaluation of data. When you ask her questions, she often answers with references to scientific studies or data collection.

Buch believes it is important that the ECB banking supervisory authority not only denounces deficits in financial institutions, but also resolutely sanctions them. “The environment is changing, for banks, companies and society,” she said recently in an interview with Handelsblatt. “That’s why we need to further develop our critical supervisory culture. This includes using our supervisory tools as effectively as possible.”

Bundesbank needs a new vice president

It is a prestige success for the federal government that Buch, a German, is now the head of the ECB banking supervision. In addition, Finance Minister Christian Lindner (FDP) has the opportunity, together with his government partners, to nominate a successor for the position of Bundesbank Vice President.

However, there are also voices that are critical of Buch’s nomination. They argue this would diminish Germany’s chances of nominating a successor to ECB President Christine Lagarde, whose term ends in 2027.

Proportionality plays an important role in the allocation of posts at the European level. Due to the defeat of the Spaniard Delgado in the struggle for the top position at the ECB banking supervision, the chances of her compatriot Nadia Calviño are now increasing. The Spanish Minister of Economic Affairs would like to become head of the European Investment Bank (EIB) – and has already been considered the favorite.

However, Calviño has a prominent competitor in long-time EU Commissioner Margrethe Vestager. The Dane wants the EIB to become more involved in providing venture capital to promote the development of European start-ups and technology companies.

More: German banks perform rather poorly in stress tests

source site-13