zeb continued its zeb Financial Market Roundtable series with another roundtable event in Frankfurt. At these events, renowned representatives from politics and financial institutions discuss current fiscal issues with a small, selected group of participants from executive boards of banks and insurance companies.

Felix Hufeld, President of the German Federal Financial Supervisory Authority (BaFin) since 2015, emphasized how difficult it was to reconcile European interests, national sensitivities, particular interests of individual institutions and political considerations of associations. According to him, maintaining commensurability, appropriateness and proportionality and exercising supervision with a sense of proportion was the prime directive. The economic quake ten years ago—triggering the collapse of the US investment bank Lehman Brothers, which until then had been regarded as an icon—but also the numerous bank bailouts revealed a regulatory crisis that in the meantime was largely resolved, at least institutionally. “The resolution system that has been installed in Germany and Europe can help prevent cases like Lehman”, Hufeld explained. However, it would not be wise to switch from a phase of hard regulation to a phase of soft regulation. Hufeld continued: “What we don't need is easy-going supervision.” In view of the fiscal disputes in the euro area, according to Hufeld, shaping structural policy was definitely not the purpose of financial supervision. Unfortunately, this different understanding of politics recently became en vogue again. In this context, the BaFin President clearly rejected the call for an industrial policy for the financial sector.

Impressions