ECB supervisors 'must learn German'
German authorities want equal status with European Central Bank (ECB) regulators when it comes to overseeing the country's banks, and say anyone assigned to monitor banks in the country should speak German.
Germany put up tough resistance to outright oversight of the country's lenders when the eurozone's single supervisory mechanism (SSM) was put in place in 2014.
National bank supervisors should be on an equal footing with the ECB and foreign staff should learn the language of the firm they monitor, a Bundesbank director has said.
Andreas Dombret said there were "many misperceptions" about the nature of the eurozone's SSM, which is comprised of the ECB and national authorities such as the Bundesbank and Bafin in Germany. "It was not intended to be a single, hierarchical organisation, but rather a supervisory network," he told a banking conference. "There are still many misperceptions on that matter."
He defended the choice of many German banks to communicate with supervisors in their national language, unlike the majority of their peers in other eurozone countries, which have opted for English, the language of international finance.
"It is ... understandable that bank representatives will want to stick to their home language when they interact with authorities," Dombret said.
"This gives domestic inspectors a natural advantage in their jobs. If we want to further reduce potential instances of 'home bias', we therefore need to target those language barriers for foreign inspectors and supervisors."
The ECB was made the eurozone's top bank supervisor in 2014 but it has faced resistance from some banks and authorities, particularly in Germany. (Reuters)