Good morning and thank you for joining us for today's press conference on the results of the Supervisory Review and Evaluation Process (SREP).
Let me summarise our main messages.
First, the euro area banking sector is well-capitalised and liquid. However, the sector continues to operate in an environment of heightened geopolitical risks. Market reactions to the announcement of new tariffs in April 2025 illustrate how quickly geopolitical tensions can materialise as concrete financial risks. So far, the euro area banking sector has remained resilient, but the full impact of increased tariffs on the corporate sector and on banks' balance sheets will become visible only gradually.
Second, digitalisation offers opportunities to improve the provision of financial services. But it also increases competitive pressure and exposes banks to non-traditional risks such as cyberattacks. Banks need to upgrade their ICT infrastructures to remain competitive and resilient, and they need sound governance to contain risks.
Third, discussions on how to simplify regulation and supervision without weakening resilience have gained traction. We are actively reforming the ECB's supervision to make it more effective and efficient – while remaining clearly focused on relevant risks. This creates space – for banks and for us – to adequately respond to evolving risks.