ECB Must Double Its Manpower To Properly Supervise Banks: Study
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The European Central Bank has been advised to hire around 2,000 additional bank supervision staff, if it wishes to properly fulfil its new role as the bloc’s top banking watchdog, reported the Financial Times on Monday.
The recommendation was reportedly based on a consultancy study, submitted to ECB President Mario Draghi and the ECB executive board last month, that called on Frankfurt to rapidly expand its resources and clout in order to protect its own reputation.
The European Central Bank has been advised to hire around 2,000 additional bank supervision staff, if it wishes to properly fulfil its new role as the bloc’s top banking watchdog, reported the Financial Times on Monday.
The recommendation was reportedly based on a consultancy study, submitted to ECB President Mario Draghi and the ECB executive board last month, that called on Frankfurt to rapidly expand its resources and clout in order to protect its own reputation.
According to the study by Promontory Financial Group, and obtained by FT, 1,997 extra staff need to be hired by 2017, by which time the ECB will be supervising around 130 banks across the region directly.
Though the findings are believed to not be binding, they underlined the “colossal scale of the undertaking for the ECB when it assumes its new powers in early 2014,” said FT.
[quote]“Several recommendations in the blueprint, if adopted, would bolster Frankfurt’s sway over existing national supervisors. This is a highly sensitive issue given the risk of a power struggle erupting when the ECB takes over as the bloc’s top bank watchdog,” FT wrote.[/quote]Related: Draghi Promises to Increase Transparency of ECB
Related: EU Banking Supervisor Could Be Ready By Early 2013
ECB leaders last year set their sights on creating a banking union that would supervise and regulate financial institutions in the bloc. In September last year, EU financial services commissioner, Michel Barnier, announced that an ECB banking supervisor could be in place as early as 2013, with the ultimate goal of providing the ECB with supervisory power over 6,000 eurozone banks.
However, bank president Draghi also admitted last August that their current 1,600-strong staff were “overworked” – with more than 75 percent working regular overtime.
A survey by the IPSO union, who represent many ECB employees, also uncovered that many ECB staffers had been made to perform additional tasks of absent colleagues, who had all gone on long-term missions to crisis-struck countries such as Greece.
Related: ECB Employees “Overworked” From Handling Crisis: Report
Related: Europe’s Fate Rests In The Hands Of The ECB: Mario Blejer & Eduardo Levy Yeyati
Related: Europe Trapped In Economic War Of Attrition: Mohamed El-Erian
So far, according to FT, senior officials at Frankfurt have played down its expansion plans, saying in December that the bank would probably need just an extra 500-1000 employees.
[quote]“The figure of 2,000 is more or less what is needed, so it is worrying to hear the ECB talking about just 500,” told Sven Giegold, a German Member of the European Parliament to FT. “Having too few staff will create dangerous conflicts of interest and leave bank supervision under national control.”[/quote]
