European Union (EU) flags fly in front of the headquarters of the European Central Bank (ECB) in Frankfurt, Germany, July 8, 2020.
REUTERS/Ralph Orlowski/File Photo Acquire Licensing RightsFRANKFURT, Nov 28 (Reuters) - The European Central Bank may need to take on a bigger role in supervising shadow banks as they are now bigger than conventional lenders and may be sitting on elevated risk, the outgoing head of the ECB's supervision arm told European newspapers.
"These are different animals to banks, so we shouldn’t expect to supervise them in the same way as we supervise banks."
Taking on oversight of shadow banks would require legislative changes, a time consuming process even under the best of circumstances, and requiring broad political agreement.
But some have argued that such a change could ease liquidity stress, particularly if shadow banks gained access to the ECB lending operations.
Persons:
Ralph Orlowski, Andrea Enria, Expansión, Enria, Balazs Koranyi, Tomasz Janowski
Organizations:
Union, European Central Bank, REUTERS, Rights, prudential, ECB, Thomson
Locations:
Frankfurt, Germany