ECB Reports on Simplification Progress

In a European Central Bank (ECB) blog post published this week, Sharon Donnery, a Member of the Supervisory Board, and Patrick Amis, Director General for Horizontal Line Supervision, report on the progress of the ECB’s supervisory simplification agenda, explaining that the focus has now moved from design to implementation.

“Good supervision is not measured by the number of requests, letters or procedures it generates, but by how clearly it identifies the risks that matter and how effectively it ensures that banks address those risks,” they write. “That principle is guiding our work to streamline European banking supervision.”

New fast-track procedures for routine capital transactions have compressed approval timelines from months to roughly a week. Banks will also face substantially lighter demands in the 2027 EU-wide stress test, with the volume of required data points cut by more than half. On-site inspections are wrapping up about 10% sooner than before, and inspection reports have been trimmed by a fifth.

Meanwhile, a review of the ECB’s accumulated supervisory guidance found that roughly 40 of its more than 100 guides and similar publications are outdated or redundant and will be withdrawn. Among the documents receiving deeper revision is the Draft Guide on Governance and Risk Culture, which will be reissued as a report on good practices.

Donnery and Amis stress that none of this reflects a relaxation of standards. Quicker decisions flow from sharper eligibility criteria and more risk-based processes, they argue, not diminished scrutiny. “The aim is not to lower the bar but to make supervision more effective in a risk environment that is becoming more complex, not less,” they write.