Donnery cites resilience as foundation of bank competitiveness

European banks enter this period of uncertainty from a position of strength, supported by marked improvements in capital, liquidity, and profitability.

However, Supervisory Board member Sharon Donnery warned that resilience must be built before a crisis hits, pointing to cross-cutting geopolitical tensions as a primary risk driver.

ECB Banking Supervision is conducting reverse stress tests to assess how geopolitical shocks could impact financial institutions, with results scheduled for publication shortly.

At the same time, supervisors are streamlining reporting frameworks and internal models to make oversight smarter without compromising prudential standards.

Beyond geopolitical vulnerabilities, supervisory focus increasingly centers on artificial intelligence governance and cyber resilience.

Donnery stressed that banks cannot outsource algorithmic accountability and must submit actionable plans by October.

Furthermore, she argued that regulatory fragmentation, rather than robust supervision, remains the primary barrier to European banking competitiveness.

Completing the banking union and integrating capital markets are essential economic necessities to support cross-border investment and sustainable growth.