Changes from report parliamentary committee draft to plenary report

21. What are your views on the completion of the Banking Union and the need for structural reforms?

The most important step to strengthen the competitiveness and resilience of the European banking sector is to allow European banks to fully reap the benefits of our single market. Completing the Banking Union is therefore essential. A complete Banking Union would also increase resilience and help safeguard against geopolitical shocks, market fragmentation, and other threats to financial stability, while also thereby strengthening confidence in the euro area financial system as a whole.

Born out of the lessons of the Global Financial Crisis and the following European debt crisis, the Banking Union was envisaged with three pillars: common supervision, common resolution and a common deposit insurance scheme. The first two pillars were introduced in record time with the creation of the Single Supervisory Mechanism and the Single Resolution Mechanism. I would describe them as success stories, which were instrumental in keeping our financial system stable during more recent crisis episodes like the 2023 banking turmoil.

However, progress on the third pillar, a European deposit insurance Scheme (EDIS), has been stalled for over a decade. In my view, this gap should be addressed promptly, as it would help a truly single banking market in Europe. EDIS is of the essence to ensure that one euro deposited at a bank in a Member States enjoys the same level of actual protection as one euro deposited at a bank in another Member State. Despite the harmonisation of coverage level and rules for national Deposit Guarantee Schemes (DGSs), the actual and perceived protection of deposits is still linked to the fiscal strength of the Member State.

Available DGS resources are a small fraction of insured deposits in a banking system and may be exhausted quickly. EDIS would allow to pool resources at the European level, reducing the risk that funds are not available when needed. EDIS would also contribute to mitigate the bank-sovereign nexus, by avoiding the risk of a national DGS having to turn to its Member State. As shown by ECB staff analysis in 2018, EDIS will bring these benefits without any substantial risk of systematic unwarranted cross-subsidisation across Member States, meaning there is limited risk that some countries end up paying the bill for banking crises in other countries in the Banking Union.

The agreement reached in 2025 by co-legislators on the reform of the Crisis Management and Deposit Insurance framework (CMDI) is a welcome step, particularly for improving management of crises of small and medium-sized banks, but this reform does not take away the urgency of completing the Banking Union with the introduction of an EDIS. Therefore, we need to reach a consensus on the timing and conditions for EDIS, and put its legislative proposal on the fast track.

Further elements are also needed to reinforce credibility of the bank resolution framework. Two key backstops remain missing: a common backstop to the Single Resolution Fund and an effective and sufficiently large public liquidity backstop for banks in resolution. I hope that progress on these backstops may be achieved soon.

Beyond the Banking Union, fostering a single market for banking would help support the competitiveness of our financial system, and I look forward to the Commission’s efforts to this end. The Single Market is a crucial lever that the EU has at its disposal.

22. What priorities would you set in addressing long-term structural risks (such as demographic ageing, climate transition and digitalisation) that impact price dynamics and financial stability?

Ongoing structural changes related to demographics, climate change, digitalisation and geopolitics contribute to an uncertain and potentially more volatile inflation environment. They could also affect the inflation trend, price formation and the relative prices of different products. In the real economy, it is too early to say whether, on balance, those structural changes will affect productivity positively or negatively. In my view, these developments must systematically be taken into account by monetary policy. Strengthening the ECB’s analytical capacity in these areas is therefore essential.

From a financial stability perspective, the ECB’s latest Financial Stability Review (November 2025) highlights three main vulnerabilities, which are also influenced by structural changes and the uncertainty over geoeconomic trends and tariff impacts: high asset valuations carrying the risk of sharp and correlated adjustments, fiscal challenges, possibly testing investors’ confidence, and banks’ exposures to tariff-sensitive sectors and their growing links to non-bank sector.

In this evolving environment, deepening the Single Market via the Savings and Investments Union, thereby advancing capital market integration, is key for European competitiveness. Anchoring our monetary sovereignty by preserving the role of the euro in the digital age will also be essential. Therefore, introducing a digital euro and the ECB’s work to enable settling distributed ledger technology (DLT) transactions using central bank money via a dual track-approach (Pontes and Appia) are key policy priorities. Taken together, these European initiatives have the potential to strengthen the competitiveness and resilience of the euro area, in particular by reducing regulatory fragmentation, unlocking venture capital and enhancing strategic autonomy.

In addition, sound structural policies are needed to boost innovation and productivity. In particular, regulatory simplification and improved conditions for start-ups could act as a catalyst for business dynamism. Strengthened education and training policies, along with increased work incentives, would help to make euro area labour markets fit for the age of Artificial Intelligence.

23. How do you assess the dependencies of the European financial system on non-EU digital service providers and how does the ECB intend to address such dependencies?

The European financial system relies on non-EU digital service providers in several areas, including cloud services, operating systems, or common infrastructures. The EU took a major step forward with the entry into force of the Digital Operational Resilience Act (DORA), which will strengthen the digital resilience of financial entities, by ensuring that they can withstand, respond to, and recover from ICT (Information and Communication Technology) disruptions, such as cyberattacks or system failures, but also including third-party risk management.

From a financial stability perspective, the ECB pays close attention to risks stemming from these dependencies. Cyber risks, in particular, have grown significantly, affecting not only banks but also insurers, pension funds and market infrastructures, driven by geopolitical tensions and growing digital interdependencies. The increasing use of AI may amplify these risks further, also depending on supplier concentration and technological penetration, given the potential for more sophisticated cyberattacks. These concerns were highlighted in the ECB’s latest Financial Stability Review and underline the importance of strong oversight through DORA.

The ECB also addresses these dependencies through its oversight of financial entities. The Eurosystem oversees different types of financial market infrastructures and other entities, as well as electronic payment instruments, schemes and arrangements, to promote the safety and efficiency of payment, clearing and settlement systems. These oversight responsibilities also entail managing risks and ensuring resilience as regards such dependencies. Moreover, on the banking supervision side, strengthening banks’ operational resilience is one of the two key Supervisory Priorities for 2026-28, and the ECB does report on these specific dependencies.

More broadly, Europe’s payment ecosystem still relies heavily on non-EU providers, especially in retail payments. The ECB's 2025 report on card schemes and processors highlights the heavy reliance on international card schemes while none of the processors operating across EU borders can be identified as fully EU-owned. In addition, there is no home-grown electronic payment solution covering the whole euro area. This is why the Eurosystem's retail payments strategy, last updated in November 2023, aims to foster the development of EU-governed pan-European solution for point-of-interaction payments, i.e. at the physical point of sale and in e-commerce. This is complementary to the digital euro project, which will rely on European infrastructure. This would allow Europe to regain ownership of the rails on which its payment system runs and thereby strengthen our autonomy.

In my view, the ECB should continue to strengthen its analytical, supervisory and oversight tools to address the risks associated with technological dependencies, working closely with EU legislators and national authorities.

24. What are your views regarding the simplification agenda in general, and the recommendations of the ECB High Level Task Force (HLTF) for simplifying the European prudential regulatory, supervisory and reporting framework, while fully preserving financial stability and prudential standards? How do you plan to follow-up on those HLTF recommendations?

The simplification discourse is both timely and necessary. The European prudential and supervisory framework has been developed drawing major lessons from the Great Financial Crisis and the European debt crisis. It served us well and helped strengthen financial stability. At the same time, it became increasingly complex over the past decade and contains some duplication and unnecessary burdens. I therefore welcome the work of the ECB High Level Task Force (HLTF) as an important contribution to identifying where simplification is possible without diluting prudential standards or weakening the resilience of the banking system.

I subscribe to the HLTF recommendations and key principles, which are:

Resilience should be maintained – this is crucial, as only a resilient financial system is able to serve the European economy. Hence, simplification is not deregulation. Importantly, our current capital requirements do not constrain private funding. Looking at the bank lending survey, balance sheet constraints have been negligible in determining changes in credit standards in 2024 and 2025. Instead, banks’ risk perceptions and their risk tolerance have been key drivers for credit standards. A stable and well-functioning banking system provides a strong foundation for economic growth. Resilient banks have a stronger capacity to lend and thus to support the real economy. Well-regulated and appropriately supervised banks can perform their roles without taking undue risks or threatening financial stability, ensuring the sustainable provision of financing. Well-capitalised banks are better able to absorb losses while continuing to lend to the real sector during economic downturns, reducing the risk of a systemic banking crisis, which would present severe consequences for the real economy.

Effectiveness in meeting prudential objectives needs to be maintained – microprudential, macroprudential and resolution authorities have to be able to effectively deliver on their mandates, capturing all relevant dimensions of risk.

European harmonisation and financial integration should be fostered – a European perspective and harmonisation across Member States will help us where a lack of harmonisation is a source of complexity or inconsistency. Being able to reap the benefits of a truly Single Market is key for banks' competitiveness.

International cooperation should be upheld – notably, being faithful to the Basel standards was rightly a red line for the Governing Council in the HLTF report. International standards and multilateral cooperation are crucial for a stable global financial system.

The ECB High Level Task Force delivered its report to the Commission in December. It is now up to the Commission to consider it as input for its own report on the banking system in the Single Market. The ECB flagged it stands happily ready to provide more detail to the Commission colleagues and the co-legislators. I consider it important to maintain this availability and, if appointed, I would proactively engage with co-legislators, including with this Committee, as also the current Vice-President did, when explaining the conclusions of the HLTF report to you.

25. The ECB HLTF report on simplification recommends a greater reliance on directly applicable regulations, with a view to reducing heterogeneity in national transposition and strengthening supervisory convergence across the Union. How would you cooperate with EU legislators and national competent authorities to ensure that this shift does not undermine local flexibility and the principle of proportionality, including in areas where key supervisory powers remain governed by national law? Which national specificities should, in your view, be explicitly safeguarded in the design of future EU regulatory frameworks?

The HLTF’s recommendation to shift EU prudential legislation from directives toward directly applicable regulations is, in my view, wellmotivated. Relying too heavily on directives can create heterogeneity in the applicable law and disparities in how institutions are supervised across the EU. The need to transpose directives into national law can lead to heterogeneity in how the law concretely applies. This can complicate cross-border banking. By contrast, directly applicable regulations do prevent such heterogeneous transposition into national law and facilitate uniform supervision, because they form a harmonised legal basis for supervisory guidance and expectations. This notably benefits banks that operate across jurisdictions and their investors, helps them reap the benefits of a truly single market, and facilitates broader economic growth, benefitting the entire EU.

This recommendation is in line with the principle of the HLTF to foster European harmonisation and financial integration. Relative to other jurisdictions, the EU faces a competitive disadvantage owing to the lack of scale that results from a still incomplete single market in banking. Banks face obstacles with regard to market integration and cross-border consolidation, and the share of European banks that are active on a European scale remains low. This also hampers EU competitiveness in a digitalised world, as it results in unexploited potential in terms of economies of scale and cross-border business. Breaking down national barriers would simplify business within the EU and foster growth, benefitting EU citizens at large.

At the same time, greater reliance on regulations must not come at the expense of national specificities where they remain relevant. Close cooperation between EU legislators, the ECB and national competent authorities (NCAs) is essential. It is important to have robust and transparent consultations with national authorities and stakeholders during the drafting of new regulations. This would ensure that national practical implementation challenges are considered at an early stage. In order to address unintended consequences, regular feedback loops between the ECB, the European Commission and NCAs are necessary, to monitor and assess the impact of directly applicable regulations. This will help us to reduce national barriers and foster European competitiveness and growth, while accounting for national needs as well.

Overall, I believe that shifting toward directly applicable regulations – accompanied by structured cooperation and careful safeguards for proportionality – offers a powerful way to strengthen supervisory convergence, reduce fragmentation and enhance the competitiveness of the European banking sector. If appointed, I would actively support this process and work closely with EU colegislators and NCAs to ensure that the transition delivers its intended benefits.

26. What are your views on the current regulation of non-banking financial institutions (NBFIs) and how should it be reformed?

Size and importance of the nonbank financial sector in the euro area have increased substantially over the past decade. Total assets of euro area non-bank financial institutions have more than doubled since 2009, and they now provide around 30% of debt financing to non-financial corporations (NFCs). This diversification of financing sources brings benefits to the real economy, but the growing interconnectedness between NBFIs, banks and global markets has also created new vulnerabilities that require a stronger and more coherent regulatory framework. In my view, addressing these vulnerabilities, notably via a more robust macroprudential approach, must be a priority if we are to preserve financial stability in an increasingly marketbased financial system.

Liquidity and leverage vulnerabilities remain elevated in the non-bank financial sector, increasing the likelihood of amplifying potential shocks. NBFIs remain vulnerable to asset price corrections, and stress in the NBFI sector may spill over to banks through funding linkages and derivative exposures. The investment fund sector faces vulnerabilities from liquidity mismatches and pockets of significant leverage. Combined with insufficient liquidity preparedness for spikes in margin calls, these factors can trigger procyclical behaviour. As for private credit markets in the euro area, they are characterised by limited transparency. Its rapid growth, complex and nontransparent structures, and strong crossborder linkages heighten the potential for hidden vulnerabilities, underscoring the need for international efforts to close data gaps and enhance risk monitoring.

An important lesson from past episodes of market stress is the need to enhance the policy framework for non-banks to ensure their resilience. The existing framework is predominantly microprudential and focused on investor protection, and it needs to be complemented by a more robust macroprudential approach.

Internationally agreed reforms to NBFI should be implemented in the EU fully and without delay. This includes measures agreed by the Financial Stability Board to address liquidity mismatches in money market and open-ended funds, improve liquidity preparedness for margin and collateral calls, mitigate systemic risk from NBFl leverage, and BCBS guidelines on counterparty credit risk management.

As the NBFI sector grows, and the EU takes steps to further integrate capital markets, we need more integrated EU-level supervision of funds and asset managers. This should be accompanied by a review of the EU macroprudential framework for the funds sector, enabling sector-wide monitoring, forward-looking risk assessments and, where necessary, the activation of preventive measures. To this end it will be important to strengthen ESMA’s role, by conferring macroprudential functions on it.

As reforms will take time to be agreed and implemented, supervisory authorities should proactively strengthen the resilience of non-bank financial institutions, making full use of their existing mandates and the current regulatory framework.

D. Payments and digitalisation

27. How do you assess the interactions between payment systems and monetary policy?

Emerging technologies such as DLT, tokenised assets and new settlement architectures are reshaping the interaction between payment systems and monetary policy, creating both opportunities and challenges for central banks. Combined with regulatory developments such as MiCAR and the EU DLT Pilot Regime, they can foster efficient and integrated digital capital markets in Europe. At the same time, they may affect the transmission of monetary policy by changing how liquidity circulates, how quickly positions are margined and settled, and which settlement assets dominate in key market segments. In my view, the ECB should actively enable innovation in payments and settlement while ensuring that these changes preserve the primacy of central bank money as the riskfree anchor of the system.

Stablecoins illustrate both the opportunities and risks inherent in this transformation. They aim to have a stable value, potentially – depending on their design and the soundness of the issuer – rendering them a convenient form of settlement asset. Today, crypto trading constitutes by far the most important use case for stablecoins and other use cases play a minor role, which helps contain shortterm risks. However, their rapid growth justifies close monitoring. A broader use of stablecoins in the future, especially if not denominated in euro, could weaken the role of central bank money as anchor of the monetary system, potentially compromising its ability to control the unit of account. If widespread use of stablecoins were to significantly increase, this could reduce retail deposits in commercial banks, banks' liquidity risk and their role in credit intermediation could be affected. Banks play a fundamental role in financing the euro area economy.

It is of crucial importance to maintain the two-tier monetary system without disrupting monetary policy implementation or transmission. This would ensure that banks are not disintermediated, maintaining their crucial role in financing the euro area economy and facilitating the transmission of monetary policy. Tokenised deposits are a way to reap the benefits of tokenisation while avoiding bank disintermediation and remaining within the well-regulated perimeter of the banking system. But for tokenised deposits they need to be transferable across banks.

Providing tokenised central bank money can enable this and will also be instrumental to supporting an integrated European market for digital assets. It will allow us to reap the benefits of the technology behind tokenisation, like reduced reconciliation costs, shorter settlement chains, atomic delivery-versus-payment and near-continuous trading and settlement. And it will be the trusted anchor of our – partially digital – monetary system of the future, serving as common, risk-free settlement asset, and hence as the backbone of our economy. It will also allow us to build on European infrastructures, euro settlement and EU-wide rules. The rapid evolution of technologies requires central banks to adapt their policy frameworks and regulatory approaches. Policymakers must balance support for innovation in payment systems with safeguards for monetary and financial stability.

28. Do you see risks to monetary stability related to the development of digital assets and which role should the ECB play in this context?

As I remarked in the answer to the previous question, the cryptoasset market has expanded significantly in recent years, reaching several trillion euros in value. Different crypto-assets present different characteristics and risks, whether it is unbacked crypto-assets such as Bitcoin, or stablecoins such as Tether which aims at maintaining a one-to-one peg with the US dollar. The risks from crypto-assets appear contained for now, but rising interconnectedness with the traditional financial system warrant attention, as they can lead to contagion risks.

Among digital assets, the rise of stablecoins has received particular prominence. While their use in the euro area remains limited and circumscribed to activities related to the trading of crypto-assets, an increased use of stablecoins can lead to a reduction in banks’ retail deposits. This will alter banks’ funding costs, liquidity risks and their intermediation role and consequently impact monetary policy transmission. In my view, these developments underline the need for the ECB to continue to take a proactive and forwardlooking stance.

The EU established MiCAR to enable the safe development of this market, in a way that safeguards monetary sovereignty, financial stability and the smooth operation of payments. The ECB was granted some responsibilities in these regards, by MiCAR, and it will be important that it continues to fulfil them alongside the national competent authorities.

Digital finance entails opportunities and Europe needs to be open and constructive so as to reap the associated benefits. There is a way to achieve this while also maintaining a well-functioning monetary system, which is for the central bank to innovate in the way it provides central bank money to the economy. Beyond the digital euro project, the Eurosystem has expanded its initiative to settle distributed ledger technology (DLT) based transactions in central bank money with a programme consisting of two complementary and mutually reinforcing tracks: Pontes and Appia. Pontes will provide a single Eurosystem solution by the end of the third quarter of 2026 (with the start of a pilot) linking DLT platforms and TARGET services incorporating features used in the Eurosystem's exploratory work on DLT in 2024. Appia complements this by aiming to foster an innovative and integrated ecosystem in Europe through collaboration with both public and private stakeholders. Together, these initiatives will help ensure that central bank money remains the trusted settlement asset in an increasingly digital financial system.

29. Digital assets and tokenised bonds are increasingly part of the financial landscape. How should eligibility for tokenised assets in the collateral framework be calibrated?

Digital innovation is transforming financial market infrastructures for securities issuance, settlement and servicing. The use of tokenisation in financial assets is increasing and has the potential to make financial services more efficient by automating, integrating and simplifying processes, and by enhancing transparency. Central Banks need to adjust to these technological developments, including with adjustments to their collateral framework.

In fact, the Eurosystem has taken a first step and is going to enable the use of marketable assets issued in central security depositories using DLT-based services as eligible Eurosystem collateral starting from 30 March 2026. These assets will need to be available for settlement in TARGET2-Securities (T2S) and are required to comply with the same Eurosystem eligibility rules as any other marketable asset accepted so far by the Eurosystem.

In addition to this first step, the ECB also announced that it has launched an ambitious work plan to explore how and under what criteria assets issued and settled entirely on DLT networks could become eligible and be mobilised as Eurosystem collateral in the future. This work will need to address a broad range of policy, legal and operational questions, including the criteria for issuance, settlement finality, the legal substantiation of ownership, and the operational modalities for mobilisation.

I believe this is just the beginning of an important area of exploration. There is the plan to further examine how legal and risk management considerations can be carefully balanced while maintaining key principles such as adequacy of collateral, safety, efficiency, and fairness in the system. I see this as an essential and meaningful endeavour that closely interacts with the mentioned other work on further developing the ECB’s role in payments and settlement systems.

30. How do you assess the risks and opportunities of the use of artificial intelligence, both from a macroeconomic perspective and in the ECB’s daily work?

The macro-financial implications of AI remain highly uncertain. For example, current estimates of AI’s impact on productivity growth range from near zero to over 2 percentage points annually. In an optimistic scenario, AI has substantial opportunities for productivity growth and living standards. At the same time, AI also entails macro-financial risks. Labour market disruption may increase inequality, depending on the balance between job creation and job replacement as well as wage beneficiaries and wage losers. Market concentration could increase as scale advantages in data and computing power favour big tech firms, potentially dampening competition and slowing the diffusion of growth opportunities. Widespread use of similar algorithms in financial corporations could amplify herding behaviour and procyclicality, while concentration among few technology providers creates systemic dependencies. In my view, this mix of risks warrants a cautious, datadriven approach that distinguishes genuine productivity gains from euphoria, cyclical or oneoff effects and actively monitors new concentrations of risk.

For monetary policy, this has potentially significant implications. If AI substantially raises productivity growth, this could increase the economy’s “speed limit” and the equilibrium real interest rate. At the same time, widespread adoption of AI technology could accelerate firms’ price reactions to shocks. At the micro-level price algorithms could differentiate more drastically across consumers, while it remains an open issue to which extent they will compete or collude across firms. Finally, the transmission of monetary policy may be affected in multiple ways through the effects of AI on labour markets, distribution and the financial sector.

Also from a financial stability perspective, there are both benefits and risks which new generative AI tools will likely bring, depending on how data, model development and deployment are handled. Already existing risks can be amplified through high technological penetration and supplier concentration, also possibly leading to herding behaviour and market correlation. At the same time, AI can bring benefits by increasing resilience of the financial system via improved information processing, supporting decision making, and through efficiency gains when automatising tasks. For all these reasons, the ECB must monitor these developments closely.

From an operational perspective, the ECB is progressively integrating AI across the institution, while maintaining all necessary safeguards. In my view, this is a positive development that strengthens realtime analysis, improves efficiency and supports betterinformed decisionmaking. At every stage, however, the use of AI must remain transparent, explainable and secure, with humans firmly in the loop and fully accountable for policy-relevant decisions.