FRANKFURT (Reuters) - Bank supervisors need to retain their flexibility in interpreting rules and assessing risk to avoid having to enforce a rigid, one-size-fits-all approach for distinctly different lenders, European Central Bank supervisor Daniele Nouy says on Monday.
“That’s why I am worried about some legislative proposals that are being discussed,” Nouy told a conference. “They would put too tight a frame around supervisors’ assessment of ‘Pillar 2’ risks by means of a regulatory technical standard and would restrict supervisors’ ability to collect ad hoc reports.”
She said that under such inflexible rules, supervisors would no longer be able to adequately differentiate between risks, thus hurting the safest banks rather than the riskiest ones.
Reporting by Balazs Koranyi; Editing by Toby Chopra