Written overview for the exchange of views of the Chair of the Supervisory Board of the ECB with the Eurogroup on 9 November 2026
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Written note by the Chair of the Supervisory Board (Claudia Buch) for the exchange of views with the Eurogroup on 9 November. The banking sector remains sound, but she points to growing risks from public debt, funding costs, insolvencies, AI and private credit, and reviews the reform of supervision.
Key points
- Robust capital and liquidity; banks distribute around half of their profits as dividends or buybacks
- Risks: higher funding costs due to the repricing of sovereign debt, pressure on energy-exposed firms, rising insolvencies, indebtedness of AI companies and strains in private credit
- AI-related lending estimated at around €62bn (1.2% of committed corporate exposure), according to AnaCredit for Q2 2026
- All supervised banks had to submit action plans on frontier AI model risks by the end of October 2026 (Dear CEO letter of 7 July); the ECB is assessing them
- Supervisory reform: approvals of capital transactions and securitisations cut from months to around two weeks; 40 of 100 guides, reports and methodologies withdrawn
- She calls for completing the banking union (European deposit insurance, free flow of capital and liquidity within groups, liquidity in resolution) and for moving from directives to regulations
Who is affected
Significant banks in the euro area; EU legislators
Deadlines
Action plans on frontier AI: submitted at the end of October 2026, under assessment
Plain-language version
Claudia Buch, head of banking supervision at the ECB (the euro area's central bank), briefed euro area finance ministers: banks are solid and pay out about half their profits to shareholders. But she sees growing risks, such as more company bankruptcies and around 62 billion euros of loans linked to AI. Keeping an eye on this early helps protect the money you keep in the bank.
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