A key regulator tasked with overseeing Europe’s historic attempt to regulate cryptocurrencies sees its ability to hire specialist staff as a “major concern”, pointing to worries about authorities’ ability to oversee digital asset markets .
José Manuel Campa, President of the European Banking Authoritysaid his organization is also worried about the logistics of planning for its new powers, as it won’t know which digital coins it has the power to oversee until very close to 2025, when new EU regulations for cryptography should come into force.
Campa said in an interview that talent retention was already a “major concern. . . especially in the fields of technology, everything related cryptodigitization [or artificial intelligence]. It is in great demand in society. »
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The Paris-based EBA, created in the aftermath of the financial crisis to ensure that European banks had enough capital to weather future storms, is tasked with overseeing “important” tokens that are widely used as a means of payment and popular tokens related to traditional transactions. assets, as part of the proposed European regulation on crypto-asset markets (Mica).
The regulator’s comments underscore the difficulties faced by other regulators trying to rein in the rapidly evolving digital asset industry.
Banks, fintechs and consulting firms are offering lavish packages to entice experts whose skills are most in demand. Record inflation in the eurozone has also led to rising wage demands as employees seek flat-rate packages to offset increases in the cost of living.
The EBA’s wages are aligned with those of the European Commission, and Campa said giving the regulator a free hand on wages was “not within the scope of possible discussions” between the EBA and the Commission.
Campa said the EBA is also concerned that, unlike banking supervision, the set of institutions it will have to oversee is undefined and could be changed at the last minute. “So I don’t know exactly what I will be facing in two years,” he said.
He said the “very dynamic” nature of the crypto industry means that regulation “naturally tends to lag.” Campa acknowledged that in three years, crypto could have “shifted and morphed into other uses that I can’t anticipate.”
Still, Campa said he wasn’t concerned about the reputational risk if the EBA got it wrong about a sector dubbed the “wild west” of finance by Gary Gensler, head of the U.S. Securities & Exchange Commission. United.
“My concern is more about making sure than the risk we have identified. . . [in the crypto market] is properly managed. If we don’t do as well as we should have, we will have to live with the consequences,” he said.
The EBA boss was optimistic about the risks to the traditional financial sector from Europe’s darkening economic outlook, stressing that he does not see a financial crisis “anytime soon” and that European banks should be able to continue lending to the economy.
“We are not in a macro [economic] environment that points to recession, we are in a macro environment that points to slow growth . . . I’m not concerned about banks really cutting credit,’ he said, striking a different tone for Bank of England officials who have already seen “indicative signs” banks withdraw.
The EBA will try to rein in banks’ exposure to rising interest rates in next year’s stress tests, a usually annual exercise designed to ensure banks have enough pockets to survive crises they might face. The European Systemic Risk Board, which monitors risks to the European financial system, is in the “very early stages” of defining the macroeconomic scenarios that banks will face.