FRANKFURT (Reuters) - National bank supervisors should be on an equal footing with the European Central Bank and foreign staff should learn the language of the firm they monitor, a director at Germany’s Bundesbank said on Monday.
The ECB was made the euro zone’s top bank supervisor in 2014 but it has faced resistance from some banks and authorities, particularly in Germany.
Andreas Dombret said there were “many misperceptions” about the nature of the euro zone’s Single Supervisory Mechanism, which is comprised of the ECB and national authorities such as the Bundesbank and Bafin in Germany.
“It was not intended to be a single, hierarchical organisation, but rather a supervisory network,” he told a banking conference. “There are still many misperceptions on that matter.”
He defended the choice of many German banks to communicate with supervisors in their national language, unlike the majority of their peers in other euro zone countries, which have opted for English, the lingua franca of international finance.
“It is ... understandable that bank representatives will want to stick to their home language when they interact with authorities,” Dombret said.
“This gives domestic inspectors a natural advantage in their jobs. If we want to further reduce potential instances of ‘home bias’, we therefore need to target those language barriers for foreign inspectors and supervisors.”
Reporting by Francesco Canepa; editing by Mark Heinrich