By David Barwick – FRANKFURT (Econostream) – The European Central Bank will send banks a “dear CEO letter” urging them to prepare proactively for increasingly powerful cyberattacks enabled by frontier artificial intelligence models, ECB Executive Board member Frank Elderson said Friday.

Speaking at a Spanish Banking Association event in Madrid, Elderson said advanced cyber capabilities were becoming faster, more accessible and available to a wider range of malicious actors, while banks had less time to respond.

The ECB would collect sound practices for use across the sector, while individual supervisory teams would continue addressing weaknesses with banks, said Elderson, who is also vice-chair of the ECB’s Supervisory Board.

Banks’ management bodies needed to assume responsibility and provide resources proportionate to the threat, he said. Strong bank profitability offered an opportunity to invest in the people, systems and governance needed to strengthen operational resilience.

Elderson also defended the ECB’s distinction between regulatory simplification and deregulation, saying simplification should make supervision more efficient without weakening resilience.

In the first quarter, 80% of simple capital-related decisions were approved within one week on average, compared with months previously, he said. A fast-track process had also reduced approval times for simple securitizations from three months to fewer than 10 working days.

Elderson identified fragmented banking markets, rather than capital requirements, as the principal constraint on European banks’ competitiveness, calling for a timetable toward a European deposit insurance scheme and freer movement of capital and liquidity within cross-border banking groups.

He also said more than 50 payment service providers had applied to participate in a planned 2027 digital euro pilot. The successful applicants would be announced in July, while the Eurosystem aimed to be ready for a potential initial issuance in 2029, provided the necessary legislation was adopted this year.