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Bundesbank Deputy Governor Claudia Buch will become the euro zone’s top financial regulator after the European Central Bank nominated her to be the next chair of the banking watchdog.

Bucher is one of two candidates, the other being Margarita Delgado, deputy governor of the Bank of Spain, to succeed Andrea Enria as president of the Single Supervisory Mechanism when she steps down early next year List.

Buch said in an interview with the Financial Times in July that a more “critical mindset” was needed when regulating the industry and warned that it still faced significant risks from recent macroeconomic turbulence, after which she could We will take a tougher approach to banking supervision.

The nomination of Germany’s deputy governor, who still needs to be approved by EU leaders and the European Parliament, is part of a series of appointments to top financial positions in the region this year.

The rejection of Delgado’s candidacy will increase the chances of Spanish Deputy Prime Minister Nadia Calvino running to be the next president of the European Investment Bank, the world’s largest multilateral bank.

Calvinho is already the frontrunner for the EIB job, according to diplomats and officials involved in the appointment discussions. Former EU competition commissioner Margrethe Vestager is Calvino’s most prominent rival. EU finance ministers will hold an informal meeting in Santiago de Compostela on Friday to discuss candidates for the European Investment Bank.

Spain holds key positions in other EU institutions, including European Central Bank Vice President Luis de Guindos and European Banking Authority President José Manuel Campa, although the latter’s term is set to expire next March .

At the same time, Klaus Regeling resigned as chairman of the European Stability Mechanism, the EU’s bailout fund, and Werner Hoyer’s term as chairman of the European Investment Bank expires at the end of this year, Germany’s share of top EU posts The proportion is declining.

The Single Supervisory Mechanism was established in 2014 to coordinate banking supervision across the currency bloc in response to the region’s sovereign debt crisis a decade ago. It oversees 110 of the euro area’s largest and most systemically important banks.

Enria, who angered many banks in 2020 by advising them not to pay dividends or buy back shares after the outbreak, has since acknowledged that the ECB overestimated the size of bad loans stemming from lockdowns imposed to contain the virus.

The eurozone banking system has so far proven more resilient to sharp rises in interest rates than the U.S. or Swiss banking systems, which have experienced multiple failures. But the EU’s external auditors have criticized the ECB for being too lax in supervising banks and not being aggressive enough in pushing to reduce the stock of bad loans left behind by the euro zone’s debt crisis a decade ago.


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