Banking supervision – constantly changing

Financial institutions in Germany have been subject to some form of government supervision for almost 90 years now. During this time, there has been only one constant – change. And, with it, the need to adapt to the current circumstances. The German Banking Act (Kreditwesengesetz), which was drafted after the banking crisis of 1931 and adopted for the first time in 1934, has been amended six times to date. Each time, supervisory practices and legislation have been adapted to the prevailing situation. The last change took place after the financial crisis of 2007, when the Basel III regime was introduced in 2010. The establishment of the Single Supervisory Mechanism (SSM) in 2014 was another key milestone. Banking supervisors are currently facing a new challenge – dealing with the coronavirus pandemic and its impact on institutions’ performance and activities.

Marcus Haas – Expert for “operational risk”

Marcus Haas has spent nearly 15 years watching these changes take place. He has been  the advisor on banking supervision at the Centre for International Central Bank Dialogue since October 2019. As a specialist for “operational risk”, he was involved in a topic that has changed enormously within a short period of time – from the introduction of the advanced measurement approach under Basel II in 2007 to its abandonment in December 2017 brought about by the finalisation of Basel III. Having spent many years working in the Bundesbank’s Directorate General Banking Supervision, besides his technical knowledge, he has also built up a huge network of contacts. This comes in handy in his new role: “In order to share the latest developments in banking supervision with our partner central banks, I rely on the expertise of my colleagues in the business unit,” explains Mr Haas. “Knowledge of supervisory topics generally becomes outdated within a year.”

Up-to-date specialist knowledge thanks to a huge network

The twinning projects with North Macedonia, Montenegro and Albania, in particular, require up-to-date knowledge of the regulatory environment since the ultimate aim is to implement the latest EU regulations wherever possible. Generally speaking, current trends and developments in banking supervision are a sought-after topic when it comes to bilateral and international cooperation. The CIC is receiving more queries about topics such as green finance, fintech firms, the leverage ratio and, most recently, the coronavirus pandemic. At the end of April, for example, a videoconference on monitoring traders in their home offices was held with the Bank of Israel.

Home office instead of business trips

Marcus Haas on the PC ©Marcus Haas

The fact that coronavirus is putting a stop to international meetings and travel is something which Mr Haas is taking in his stride: “We asked our partner central banks what they thought about holding events as web-seminars or video conferences, and the feedback we received was almost entirely positive”. As a result, the first web-seminars about on-site inspections, capital requirements, IT supervision and remuneration are already scheduled for May and June. Montenegro and the  Ukraine will be the first countries to participate in events hosted exclusively in electronic form. To this end, the CIC has purchased a licence to use the web-seminar software “YuLinc”. In addition, WebEx is available as a videoconferencing tool.

The medium-term plan is to provide web-seminars for parts of the international central banking courses, in particular, kicking off with the course “Introduction to the Basel III framework”, which is to be split into several modules and provided on a weekly basis. Mr Haas has settled into his new routine of working from home and is looking forward to the challenge of hosting courses in front of a camera rather than a live audience. One of his hobbies will stand him in good stead here – he runs a YouTube channel presenting historical cookbooks.

Text: Marcus Haas
Photos: Alexandra Lechner, Marcus Haas