European Banking System's Resilience and Future Directions

Frank Elderson, a member of the European Central Bank (ECB) Executive Board, emphasized the resilience of the European banking system during his speech at the European Financials Conference in London. He attributed this strength to robust regulatory frameworks and rigorous supervision, which have led to higher capital and liquidity buffers, improved risk management, and better governance.

However, Elderson also pointed out the potential risks posed by geopolitical crises, tariffs, and climate change. He stressed the importance of a completed banking union, including the establishment of a European deposit insurance scheme and a fully integrated capital markets union, to eliminate barriers to market integration and ensure the financial system supports both stability and growth.

"The path to greater competitiveness does not lie in deregulation but in further European integration," Elderson concluded, highlighting the need for continued efforts towards integration to solidify the Eurozone's competitiveness and economic expansion.