In charge of the European banking system: Danièle Nouy and Sabine Lautenschläger visit Frankfurt School

She permanently deals with bureaucracy of different European countries. However, she does not get bored. Quite to the contrary, sometimes she even wishes for more boredom, said Danièle Nouy, Chair of the Supervisory Board of the Single Supervisory Mechanism at the European Central Bank, during the ECB Youth Dialogue at Frankfurt School of Finance & Management last Monday. The French banking expert knows that there are not so many jobs with this much variety. She learns every day – more than she has ever imagined. Therefore, being Chair of the Supervisory Board at the ECB is something really special, she emphasised. Also, Sabine Lautenschläger, Vice-Chair of the Supervisory Board, attended the business school´s panel. Andreas Horchler, Director of Corporate Communications at Frankfurt School, presented the talk.

Designing the mechanism in less than a year

Both, Danièle Nouy as well as Sabine Lautenschläger joined the ECB in early 2014. Because of an urgent need to foster the financial stability in the euro area, there was only a limited time frame to set up ECB Banking Supervision. “We had less than a year – it was a tough deadline. The biggest challenge was to build up the new team. In the first weeks we were only 12 people. Now, we have a team of 1.000 experts. We received 26.000 applications from lawyers, economists, mathematicians and even historians”, said Sabine Lautenschläger. However, the existing sturctures at ECB with a lot of computer scientists and HR professionals helped to start the body. Crucial for starting to work within the supervision was especially a solid academic background. A lot could be learned on the job, emphasised Danièle Nouy. Many of the new colleagues joined from the national supervisory authorities. Meanwhile, there are 28 different nationalities working for the ECB Supervisory Mechanism. The only language all of them understand is English.

Foresight: How disruption affects banking supervision

Traditional banks get more and more competitors because of an increase of FinTechs. Because of being less regulated, the business models of the start-ups are more flexible than those of the conventional banks. This brings grey areas, emphasised Sabine Lautenschläger. “FinTechs are competitors that are not so much regulated. Hence, they do not have the costs which are a side effect of regulation and supervision. Because of that, the start-ups have competitive advantages. However, I believe that a lot of FinTechs will have to decide about their portfolio. A bigger portfolio brings more regulation”, said Sabine Lautenschläger. In general, the ECB Supervisory Mechanism always has to evolve. However, that does not mean that the body does not set standards. “We design the future of European banking”, emphasised Sabine Lautenschläger.

Youth Dialogue: Students ask experts

In the second part of the event the attendees got the chance to ask questions. In addition to students and alumni, FS employees as well as journalists joined the talk. For example, the audience was interested if Europe needs a common fiscal policy. Moreover, one student asked to what extent cryptocurrencies affect the regulations of the ECB Supervisory Mechanism. “Until now it did not really affect our work. Also, they are not currencies – they are digital assets”, said Sabine Lautenschläger.

Watch the full event here.