ECB proposes lighter supervision for 150 more European banks
The ECB wants national authorities to be able to raise the asset threshold for small, non-complex banks from €5 billion to €10 billion, potentially bringing around 150 more institutions into a lighter supervisory framework. Frank Elderson says the changes would cut compliance work without lowering safeguards, including through less frequent reviews and sharply reduced reporting.
Bottom line — The ECB estimates reporting for small banks could fall from 13,500 data points to about 700.
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The ECB says the changes could bring up to 85% of less significant institutions under the small-bank framework.
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According to Elderson, some banks with low risk profiles could go two to three years without a full supervisory review.
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The ECB proposes selective bottom-up stress tests for smaller banks, with supervisors relying more on centrally run, top-down exercises.
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The ECB’s January task-force briefing says expanding the small-bank regime still needs technical follow-up on how the rules should be applied.
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The European Parliament’s analysis notes that the ECB’s wider simplification recommendations leave important questions of governance and calibration open.