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Erscheinung:14.01.2015 BaFin President’s address at the 2015 New Year press reception

On 13 January 2015, BaFin held its annual New Year press reception in Frankfurt am Main. BaFin President Dr Elke König spoke of the Single Supervisory Mechanism (SSM) and the European Single Resolution Mechanism (SRM) as well as the planned Capital Market Union. Among the other subjects she discussed were collective consumer protection and the impact of the low interest rate environment.

The Single Supervisory Mechanism (SSM)’s common standards of supervision made sense, she said, but the standardisation of regulation and supervision must not degenerate into a levelling down. Only the European Single Resolution Mechanism (SRM) would make European Banking Union complete and ensure that it would in future be possible to organise the orderly resolution of systemically important banks as well. “With its resolution regime the European Union has taken the only sensible path for the euro zone and opted for a cross-border approach. But such is the nature of the problem that we also need a global resolution regime and common resolution practices that apply internationally.”

König also spoke of the European Commission’s planned Capital Market Union. “From a German perspective this is in principle a good idea, but one which should be approached with a sense of proportion.” One question that had to be asked, for example, was what reforms were actually needed.

König also discussed BaFin’s position with regard to the Retail Investor Protection Act (Kleinanlegerschutzgesetz), which will in future enshrine collective investor protection in law as another supervisory objective for BaFin. “The lawmakers are thus giving us even more to do and are at the same time strengthening our hand.” The State had to make it possible for consumers “to obtain sufficient information to be able to make their investment decisions.” But consumers did also have a responsibility to acquire at least some basic knowledge.

König closed by talking of the challenges of the low interest rate environment, which was impacting on life insurance companies and Bausparkassen (building and loan associations) in particular, but was by now also one of the biggest challenges facing the banks. However, she warned banks against incurring excessive risks in the search for new sources of earnings.

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