It should be a tool of last resort, to be used only when there is a clear risk of deflation. With a long-lasting, very accommodative monetary policy, side effects and risks emerge. And while pursuing price stability is the main objective, we also have to keep in mind the costs – and not only the benefits – of our monetary policy measures. What danger does the row between Rome and Brussels over the Italian budget present for the country’s banking system? As a banking supervisor it’s not our task to comment on political discussions or decisions with regard to the budgets and fiscal stances of individual countries. Banks have to acknowledge changes and risks in the macroeconomic environment they operate in. And if these changes are relevant, we as supervisors adapt our assessment of banks’ risk profiles, too. Overall, the Italian banking system has become more resilient and banks are better equipped to deal with uncertainties than they were before. What do you see as the top priority for banking supervision in the coming months and years, in Italy and elsewhere? Among other topics, there is still further work to do on non-performing loans. They will keep us busy for the coming years. The cleaning up of banks’ balance sheets should be pushed through as quickly as possible. This is not specific to Italy. All banks should do their utmost to improve their resilience in sunny times when the economic cycle is on the upside.
Not all banks have done all of the work we would like them to do. Some are well under way, and some still need to do much more. Some observers are disappointed that a male candidate – Italy’s Andrea Enria – will take over as head of ECB Banking Supervision from Danièle Nouy next year, rather than Irishwoman Sharon Donnery. How did you feel about the news? I hope that our ratio of women in central banking, as well as in banking supervision, will increase. I’m convinced that diversity in management positions is an intelligent idea to pursue. 2/2  BIS central bankers' speeches