In a blog post published earlier this week, Claudia Buch, Chair of the Supervisory Board of the European Central Bank (ECB), announced the ECB's intent to update its Supervisory Review and Evaluation Process (SREP).
"The risk environment in which banks operate has evolved substantially in recent years," Buch wrote. “As risks evolve, supervision must evolve too. Supervisors need to understand risks, they need to be forward-looking, they need to communicate clearly with banks, and they need to be intrusive in their actions to ensure that banks remediate their deficiencies.”
The new SREP, which will build upon ten years of successful European banking supervision, will be more effective and efficient, Buch explained. The ECB's Supervisory Board has set six goals for the new supervisory regime:
"The SREP will become shorter and move closer to real-time supervision," Buch wrote. "To fully reap the benefits of these and other measures, ECB Banking Supervision will foster a supervisory culture that focuses on key risks and encourages strong and timely actions."
For more on the past, present, and future of European banking supervision, don't miss Elizabeth McCaul, a Member of the ECB's Supervisory Board, and Andrea Enria, past-Chair of the ECB's Supervisory Board, in our 2024 Compendium. The importance of strong and effective supervision, and the application of SupTech thereto, will also be a key topic of conversation during our Compendium Launch Event on June 11th. ▸ Learn More
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