matthew elderfield : european banking regulation and the eurozone crisis address by mr matthew elderfield, deputy governor of the central bank of ireland and alternate chairman of the european banking authority, to the 4th cdu / csu congress in the bundestag, berlin, 26 march 2012. * * * these remarks are the authors personal views and do not necessarily reflect those of the eba or of the esrb, of which mr elderfield is a member of the general council. thank you for the invitation to join you today to discuss european banking regulation. in my brief time for opening remarks i would like to do three things : explain the actions the european banking authority ( eba ) has taken to address the eurozone financial crisis ; discuss the limits of regulatory action due to the feedback loop characteristics of the crisis and suggest two or three areas to explore to improve the current policy response to the crisis. the formation of the eba at the start of 2011 was a very significant milestone in the development of european regulation and the single market in banking. the eba is different from its predecessors in three important ways. first, its actions as policy - maker will mean that a single european rule book will become a reality and be directly binding on all eu banks. second, its remit for supervisory convergence and direct operational responsibilities – such as its role in colleges of supervisors – will make it increasingly influential in how supervision works on the ground in national authorities. and third, its responsibilities for crisis management mean that it will be at the forefront of the most important regulatory challenges of the day. this has, of course, been the case with the current eurozone financial crisis, first through a series of stress tests and, more recently, with its recommendation to create a temporary capital buffer to strengthen the european banking system. it is important to remember that the eba ’ s actions on capital were taken in response to not only market concerns but also calls for strengthening of capital from leading international and european policy makers. last autumn both the new managing director of the imf and the european systemic risk board, comprising the eu ’ s central banks and regulators, made strong calls for increased capital levels at europe ’ s banks. eba ’ s chairman, andrea enria, showed strong leadership to respond to those concerns by crafting a new initiative on capital which was adopted by the eba ’ s members. constructing correctly calibrated regulatory measures involving bank capital is extremely challenging in the current financial crisis. this is principally because of

the general board of the esrb to adopt in december 2021 a recommendation to establish a pan - european systemic cyber incident coordination framework ( eu - scicf ). 11 the aim of this recommendation is to see, for example, macroprudential policy beyond banking : an esrb strategy paper, esrb, 2016. see letter to members of the european parliament on the aifmd review, esrb, 23 march 2022 ; letter to the council working party on the aifmd review, esrb, 23 march 2022 ; letter to members of the european parliament on the review of solvency ii, esrb, 2 february 2022 ; letter to the council working party on the review of solvency ii, esrb, 2 february 2022 ; letter to members of the european parliament on the solvency ii review and liquidity risk management, esrb, 16 november 2022 ; letter to the council working party on the solvency ii review and liquidity risk management, esrb, 16 november 2022 ; letter to members of the european parliament on emir review, esrb, 20 march 2023 ; letter to the council working party on emir review, esrb, 20 march 2023. see making macroprudential policy fit for the next decade, keynote speech by pablo hernandez de cos, governor of the banco de espana and chair of the advisory technical committee of the european systemic risk board, at the 6th dnb - riksbank - bundesbank macroprudential conference, june 2022. recommendation of the european systemic risk board of 2 december 2021 on a pan - european systemic cyber incident coordination framework for relevant authorities ( esrb / 2021 / 17 ). strengthen coordination between financial authorities in the eu as well as coordination between other authorities in the eu and at international level, including the bank of england. earlier this year, in february, the esrb released a report on macroprudential policy for cyberresilience. 12 the document encourages authorities across the eu to make progress on three elements : ( i ) cyber - resilience scenario testing ; ( ii ) systemic impact tolerance objectives and ( iii ) financial crisis management tools to deal with system - wide cyber incidents. this area is still work in progress – it is still in its infancy, if i may put it that way – and for this reason the esrb continues to work on an eu - wide strategy to help mitigate systemic cyber risk. the esrb aims to act as