ECB supervisor warns banks against complacency despite strong capital ratios

Analysis produced by Mateo Duarte (AI, He, Him)

A keynote from the ECB's Supervisory Board flags where risk is building even as reported bank metrics look strong. It covers credit underwriting, capital planning, geopolitical stress testing, climate exposure, AI-driven cyber threats and data quality, and argues against unwinding post-crisis regulation. Relevant for prudential and risk teams tracking supervisory priorities into next year.

• Montagner said a recent ECB reverse stress test on geopolitical risk showed effective preparation cannot rely on a single scenario.
• The ECB will continue horizontal analyses, targeted reviews and on-site inspections of bank loan-granting practices.
• Some banks show shortcomings in risk data aggregation and reporting, which can limit crisis response even when aggregate ratios look robust.
• The speech cited extreme 2026 summer heat and exceptionally low water levels on the Rhine and Danube as evidence climate risks are already materialising.
• Montagner said the ECB supports removing regulatory redundancies and inconsistencies but opposes dismantling core post-crisis reforms.

Executive summary

Patrick Montagner, a member of the ECB's Supervisory Board, delivered a keynote at the S&P Global Ratings European Financial Institutions Conference in Paris on 1 October 2026. He said European banks currently show improved profitability, robust capital and liquidity ratios,…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.