The German Central Bank (Bundesbank) issued a warning on Monday that many domestic financial institutes remain ill-equipped to ward off cyber security threats.
"Of course, all institutes have some form of security system in place against cyber-attacks today, but these vary significantly in terms of their degree of maturity," Joachim Wuermeling, member of the Bundesbank executive board, told the Funke media group.
Wuermling urged bankers to make improvements quickly in light of a trend towards growing cyber risks faced in the financial industry.
"All banks need to work towards adapting their business models to new digital realities," the Bundesbank executive board member said.
In spite of these warnings, Wuermeling reached a positive verdict on the overall health of the German banking sector ten years after the 2008 financial crisis.
"Supervision has made a significant contribution to this positive development. We have tightened regulations globally and introduced shared banking supervision and better insolvency procedures in the Eurozone," he argued.
Aside from cybersecurity, Wuermeling pointed to high costs and high levels of non-performing loans in some Eurozone members as areas where financial institutes could still improve to ensure greater stability.
He highlighted that banks in the European Union (EU) were still laboring under legacy costs of the bloc's sovereign debt crisis and hence faced a competitive disadvantage against their U.S. counterparts where authorities had reacted more quickly and resolutely to the financial crisis.
After initially expressing support for a series of ambitious Eurozone policy proposals first made by French president Emmanuel Macron, Berlin has backtracked again on key elements such as a European Monetary Fund and deposit insurance scheme seen as necessary for the completion of European Economic and Monetary Union (EMU) by many experts.
Following a recent appeal by Austria, a traditional ally of Germany, to finally press ahead with reforms, German finance minister Olaf Scholz emphasized that his government would not support the swift introduction of a shared deposit insurance scheme now supported by most other Eurozone members.
"Of course, all institutes have some form of security system in place against cyber-attacks today, but these vary significantly in terms of their degree of maturity," Joachim Wuermeling, member of the Bundesbank executive board, told the Funke media group.
Wuermling urged bankers to make improvements quickly in light of a trend towards growing cyber risks faced in the financial industry.
"All banks need to work towards adapting their business models to new digital realities," the Bundesbank executive board member said.
In spite of these warnings, Wuermeling reached a positive verdict on the overall health of the German banking sector ten years after the 2008 financial crisis.
"Supervision has made a significant contribution to this positive development. We have tightened regulations globally and introduced shared banking supervision and better insolvency procedures in the Eurozone," he argued.
Aside from cybersecurity, Wuermeling pointed to high costs and high levels of non-performing loans in some Eurozone members as areas where financial institutes could still improve to ensure greater stability.
He highlighted that banks in the European Union (EU) were still laboring under legacy costs of the bloc's sovereign debt crisis and hence faced a competitive disadvantage against their U.S. counterparts where authorities had reacted more quickly and resolutely to the financial crisis.
After initially expressing support for a series of ambitious Eurozone policy proposals first made by French president Emmanuel Macron, Berlin has backtracked again on key elements such as a European Monetary Fund and deposit insurance scheme seen as necessary for the completion of European Economic and Monetary Union (EMU) by many experts.
Following a recent appeal by Austria, a traditional ally of Germany, to finally press ahead with reforms, German finance minister Olaf Scholz emphasized that his government would not support the swift introduction of a shared deposit insurance scheme now supported by most other Eurozone members.
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