Financial Regulator Bafin to Re-examine Supervisory Framework of Banks Following a Series of Problems at Regional Banks
The German financial regulator, Bafin, plans to scrutinize the control mechanisms of financial institutions more closely in the wake of a series of issues at regional banks, according to its top banking supervisor, Raimund Röseler, speaking to the Handelsblatt. “Good supervisory board members are very important” Röseler said, adding that the topic of supervisory boards would be a key focus in 2025. He emphasized that the crucial factor is that the board members have a healthy skepticism towards the work of the management board. This, he stressed, is not something that can be learned in training sessions.
The Bafin executive director noted that three regional banks had recently required support from the cooperative risk management institution and that the extent to which risks had been concealed at individual institutions in the previous year was concerning. The cases had also been more costly than usual, he said.
In 2024, Röseler had criticized the fact that many problem banks had been led by “old white men” who had overestimated their abilities. The Bafin had therefore examined all banks with management and supervisory board chiefs who had been in office for more than 15 years, Röseler said. “We have taken notice of two institutions, which we will now take a closer look at. However, no trend was discernible that such institutions are inherently worse run than others” he added.
Röseler’s conclusion was that “many old white men are doing a good job.