Patrick Montagner: Banking supervision in a fragmented credit market: interconnections matter

AI Analysis

In an interview published on 24 March 2026, ECB Supervisory Board member Patrick Montagner outlined evolving supervisory expectations regarding risk management in a fragmented credit market. The focus is on the heightened importance of understanding and managing interconnections within the financial system, as emphasized through the MaRisk framework. This signals a shift in supervisory priorities, not a change to the written rules themselves.

This guidance is primarily directed at significant institutions directly supervised by the ECB, as well as less significant institutions overseen by national authorities. All banks operating within the Eurozone should consider the implications, particularly those with complex exposures to non-bank financial intermediaries or those operating in markets with concentrated counterparty risk.

Compliance and risk management teams should immediately review this supervisory communication. They must assess their institution's exposure to interconnectedness risks, ensuring their internal MaRisk-compliant frameworks adequately identify, monitor, and manage these risks. Proactive engagement with supervisors on this topic is advisable to demonstrate alignment with these heightened expectations.