PwC Risk and Regulatory Roadshow: Managementul riscului devine din ce în ce mai important pentru băncile europene, în contextul tot mai multor reglementări, în efortul de a preveni apariția unei crize.

Even though they have significantly improved their financial position in 2022, the European Central Bank (ECB) recommends European banks to be cautious when it comes to distributing dividends or repurchasing shares, considering the risks arising from the geopolitical situation, high inflation, and rising interest rates, to avoid a crisis in the sector. The „Risk and Regulatory Roadshow” conference, organized by PwC Romania, addressed these issues and other regulatory and risk aspects that affect the banking sector.

Furthermore, over half of European institutions have outdated business models that could jeopardize their market position in the face of competition from neobanks or tech giants aiming to expand into this sector.

In this context, European regulatory authorities are making more recommendations and imposing more rules on banks to adapt to ongoing changes and mitigate risks. These topics were discussed at the „Risk and Regulatory Roadshow” conference, organized by PwC Romania and attended by various experts in the field.

Among the speakers at the conference were Dinu Bumbăcea, Country Managing Partner at PwC Romania, Ana-Maria Butucaru, FS Assurance Leader for Romania at PwC Romania, Martin Niesen, Global Basel IV Leader and Risk and Regulation Leader at PwC Germany, Stefan Röth, Regulatory Management Leader at PwC Germany, Mircea Bozga, Risk Assurance Leader for Romania at PwC Romania, Răzvan Cioc, Manager Risk Assurance at PwC Romania, Luminita Tatarici, Senior Economist at the National Bank of Romania (BNR), Stefania Tent, Executive Director of Risk Management at Banca Transilvania, and Ilinka Kajgana, Board Member, CRO, Risk Executive Vice President of BCR.

During the conference, several important declarations were made regarding the regulation and risk management in the banking sector. For more details, you can find the main statements on the PwC Romania blog.

It is evident that the banking sector is facing numerous challenges and risks, especially in the current economic and geopolitical climate. The ECB’s recommendation to be cautious in distributing dividends and repurchasing shares reflects their concerns about the potential impact of these actions on the stability of the banking system.

The geopolitical situation, including factors such as trade tensions, political instability, and the ongoing pandemic, has created an uncertain environment for the banking sector. These factors can affect the profitability and financial performance of banks, leading to increased risks.

Moreover, the high inflation and rising interest rates pose additional challenges for banks. Inflation erodes the purchasing power of consumers and can impact loan repayments, while rising interest rates can increase borrowing costs for individuals and businesses. These factors can result in higher credit risks and potential loan defaults, affecting the overall stability of the banking sector.

In addition to these external risks, European banks also face internal challenges related to their outdated business models. The emergence of neobanks and the increasing focus of tech giants on the financial sector pose a threat to traditional banks. These new players bring innovative business models and technologies that can disrupt the market and attract customers away from traditional banks.

To address these challenges, European regulatory authorities are implementing stricter regulations and requirements for banks. These regulations aim to enhance risk management practices, ensure financial stability, and protect the interests of customers and stakeholders.

The speakers at the conference emphasized the importance of banks adapting to these regulatory changes and embracing innovation to remain competitive in the evolving financial landscape. They highlighted the need for banks to invest in advanced technologies, such as artificial intelligence, data analytics, and cybersecurity, to improve risk management, efficiency, and customer experience.

The conference also discussed the role of central banks, such as the European Central Bank, in supervising and overseeing the banking sector. Central banks play a crucial role in maintaining financial stability, conducting monetary policy, and protecting the overall economy from systemic risks.

Overall, the „Risk and Regulatory Roadshow” conference provided valuable insights into the challenges and opportunities facing European banks. The recommendations and discussions at the conference emphasized the importance of proactive risk management, regulatory compliance, and embracing innovation to ensure the long-term viability and success of banks in the dynamic and competitive financial industry.

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