Emerging external risks for banks

How safe are our banks in the euro area? The world around us is changing – geopolitical tensions , AI and climate change can all pose risks to banks. So how can banks best manage their risks? What are supervisors focusing on in the coming year? And what measures are they taking to make supervision less complex? Our host Stefania Secola speaks to Supervisory Board Chair Claudia Buch to find out. The views expressed are those of the speakers and not necessarily those of the European Central Bank. Recorded on 4 February 2026 and published on 17 February 2026. In this episode: 00:57 How safe is your bank? How are euro area banks doing? How does the ECB – together with national supervisors – examine their health? 03:51 What risks should banks be focusing on? How is the external environment in which banks operate changing? How can risks from geopolitical uncertainty, digitalisation and climate change feed through to banks? 06:02 How is supervision evolving? In a changing external environment, we need new strategies to properly manage new risks. How is European supervision adapting to become more efficient, effective and risk-focused? 08:57 Why is supervision so complex? Modern banks are complex, operating across borders and with different business models. How can we reduce undue complexity in supervision? 10:54 Let’s talk about competitiveness Do regulation and supervision hinder the competitiveness of euro area banks? What does the banking sector need to do to stay competitive, and how can European banking supervision help? 13:02 Our guest’s hot tips Claudia Buch shares her hot tips. Streamlining supervision, safeguarding resilience: https://www.bankingsupervision.europa.eu/framework/approach/html/simplification.en.html Governing Council proposes simplification of EU banking rules: https://www.ecb.europa.eu/press/pr/date/2025/html/ecb.pr251211~aa5c9271b8.en.html Banking supervision explained https://www.bankingsupervision.europa.eu/about/banking-supervision-explained/html/index.en.html Espresso Economics https://www.youtube.com/@Espresso_Economics ECB Instagram https://www.instagram.com/europeancentralbank/