ECB Simplifies Supervisory Guidance
The European Central Bank (ECB) has eliminated around 40 supervisory publications and updated others to offer clearer guidance and enhance supervision.
This decision came after the ECB reviewed over 130 publications. Frank Elderson, a member of the Executive Board and vice-chairman of the Supervisory Board, shared insights on this development in a blog post dated June 26.
“Since European banking supervision began, we’ve accumulated a significant number of supervisory guides, ‘Dear CEO Letters,’ and various publications,” Elderson noted. “Many of these were created in response to requests from banks to improve transparency and consistency within the prudential framework. As part of our ‘Next Level Supervision’ reform agenda, we’ve taken a step back to evaluate these documents, concluding that it’s time to organize and simplify them.”
According to the ECB’s website, the ‘Next Level Supervision’ initiative aims to transform supervisory activities while increasing the use of digital tools.
The recent changes were intended to streamline guidance, determine the relevance of older publications, and clarify that supervisory expectations are not legally binding, as mentioned in the blog post.
The 40 documents that were abolished were deemed outdated, surpassed, or no longer relevant, allowing for a focus on the most current material for both supervisors and banks.
Additionally, other publications have been updated for better clarity and to incorporate recent regulatory changes. The blog post also indicated that further detailed revisions are anticipated by the end of the year.
“Simplification isn’t about reducing standards or doing less. It’s about prioritizing what truly matters, helping banks support the real economy through necessary investments that will drive Europe’s strategic autonomy and accelerate transitions in digital, green, and defense sectors,” Elderson emphasized.
On June 19, reports indicated that the European Union (EU) is looking to implement various measures to boost the competitiveness of its banking sector, which has fallen behind U.S. banks.
EU banks have long contended that overlapping requirements from supervisors, resolution authorities, and national regulators hinder their lending capabilities.
