ECB Overhauls Watchdog to Give Banks Long-Sought Transparency

(Bloomberg) -- The European Central Bank said it will shake up its oversight arm to help lenders take account of regulatory demands when planning their business, a key demand for some bankers.

Starting in the fourth quarter, euro-area banks will be grouped together according to business model rather than by size. The ECB will establish dedicated units for conducting on-site investigations and setting supervisory strategy and governance.

ECB President Christine Lagarde has promised more transparency at the central bank since taking over in November, as has Andrea Enria, who has led the oversight arm since the start of 2019. While some European bankers have faulted the watchdog for not giving them sufficient disclosure, former officials at the supervisor argued that banks could exploit a surplus of information.

The overhaul will be “headcount-neutral and cost-neutral,” the ECB said in a statement on Wednesday. It named the following five people as heads of business areas:

• Patrick Amis for specialized and smaller banks
• Korbinian Ibel for universal and diversified banks
• Ramon Quintana for systemic and international banks
• Pedro Teixeira for governance and operations
• Stefan Walter for horizontal line supervision

The managers for the on-site and internal models inspections as well as supervisory strategy and risk business areas will be appointed and announced later, the ECB said.

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