Central Bank of the Republic of San Marino Director General calls for regenerative bank governance amid EU sustainability rule layering

The Central Bank of the Republic of San Marino reported remarks by its Director General, Andrea Vivoli, at the Human Economic Forum on “Regenerative Governance”, where he argued that banks should embed social sustainability into governance so finance serves people and supports equitable development. He highlighted the governance challenge posed by an increasingly complex European regulatory landscape, citing the Corporate Sustainability Reporting Directive, Sustainable Finance Disclosure Regulation, EU Taxonomy, Corporate Sustainability Due Diligence Directive, the Capital Requirements Regulation III and Capital Requirements Directive VI package, and the European Banking Authority Guidelines on ESG risks. Vivoli warned that this layering can drive fragmented compliance and make it harder for boards to set consistent long-term strategies, and he noted that social factors such as human rights, working conditions and financial inclusion remain difficult to measure and translate into risk and performance metrics compared with environmental indicators. As possible directions, he pointed to prudential incentives for fully social-sustainable financing analogous to the “SME Supporting Factor” (subject to sound empirical evidence and consistency with the Basel Committee framework), and public-private partnerships to manage impaired-loan portfolios of vulnerable households with a view to financial re-inclusion and preventing over-indebtedness.