Recently, in a Boardroom in Frankfurt

06/04/2018

CEO's Notes



 

I wasn’t hibernating these past few months! It’s been an incredibly busy time so this blog took the back-burner. But some weeks ago I had the privilege to attend, on behalf of the Malta Bankers’ Association, the Boardroom Dialogue between the ECB’s Single Supervisory Board and the European Banking Federation. This annual event, hosted by Commerzbank in Frankfurt, brings together senior bank regulators and bankers in discussing important themes of mutual interest.

It was heartening to hear Daniele Nouy, Chair of the Single Supervisory Board, pronounce that the medicine seems to be working. With Basel 3 in its final implementation and economies showing sure signs of recovery, she was now looking at some stability with no particular new supervisory measures. She warned banks to use this time well, keep to disciplined NPL reduction plans, raise credit assessment standards and invest in stronger risk management, compliance and cyber security - remarking, ‘if not now, when?’

But it was the increasing threat to cyber security that attracted particular attention at this high profile event. One of two breakout sessions had Steven Wilson, Head of Cyber Crime at Europol, opining that a cyber-incident, when it happens, will trigger the next financial crisis. And it will bring banks and the financial system on their knees. It was not even a question of ‘if’ or ‘when’, warning banks that ‘failure to prepare is preparing for failure’. Bankers in the room added their concern about this ‘dark hole’ noting that digital transformation programmes are actually opening up a Pandora’s Box of risks which can barely be identified or measured.

The other breakout session tackled Brexit. At the closing we were told that only 20% of those present attended this session, the vast majority filling up the room for the Cyber Crime session. Kind of shows where bankers are particularly concerned!

 

 

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