Mr Röseler, the EBA and ECB stress tests showed a mixed picture for German institutions. Are German banks still stable?

Yes. The banking sector in the euro area – including of course German institutions – would be stable even in the event of a very severe economic downturn. That was the key finding from the two stress tests for significant institutions under ECB supervision. First of all, this is good news. And it is worth pointing out that the scenario used for Germany was particularly strict. Now we are looking at the results in detail.

And of course we are also examining what conclusions we can draw from this for the broad majority of German banks and savings banks, which are under BaFin’s direct supervision. These less significant institutions (LSIs) were not included in the stress tests. Separate stress testing is being planned for them in the coming year. The findings therefore cannot be directly applied to German LSIs.

Even in the very unlikely severe adverse scenario, the capital buffers of many banks – including German institutions – were more than sufficient. Are the supervisory requirements now too strict?

Capital requirements are an extremely important supervisory tool. And we must use this tool with flexibility, as we have done in the case of capital buffers for housing loans, for example. If a large number of institutions exceed the regulatory requirements, then to me that means they have done their job. And that is of course positive.

Conditions can change rapidly, as we have seen several times over the past few months and years. We must be prepared for that. Interest rate risk remains a real issue: many institutions have more or less used up their hidden reserves. And who knows whether interest rates will continue to increase, or whether some of the effects are still to be seen. Of course, capital buffers alone are not sufficient to mitigate this risk – this can be achieved only through holistic risk management.

What should banks pay particular attention to in their risk management?

I’ve already mentioned interest rates. Credit risks are also rising as a result of the higher number of insolvencies. Banks must identify and take into account credit default risks as early as possible. The MaRisk amendment sets out clear specifications for this, for example with regard to loan monitoring and – where necessary – the revaluation of collateral and credit quality.

Cyber risks are also on the rise. The financial sector is a particularly appealing target, and the number of attacks has increased significantly. Small and medium-sized institutions can also be affected. This is why we have been conducting more targeted IT inspections at institutions and service providers for some time now. As part of our ongoing operational supervision we are also more closely examining whether companies comply with our IT requirements. This is not only a task for institutions' IT departments, but also for their risk management. And risk management should be an executive priority.