ECB Scraps 40 Outdated Supervisory Guides to Boost European Bank Lending

The European Central Bank (ECB) has discontinued about 40 supervisory publications and has revised others in an effort to provide simpler guidance and more effective supervision.

These moves followed the ECB’s review of more than 130 publications, Frank Elderson, member of the executive board of the ECB and vice-chair of the supervisory board of the ECB, said in a Friday (June 26) blog post.

“Since the start of European banking supervision, a fairly large body of supervisory guides, ‘dear CEO’ letters and other publications has accumulated,” Elderson said. “These documents were issued with good reason — often at the request of banks — to enhance transparency and consistency in how we intend to apply the prudential framework. As part of our ‘Next level supervision’ reform agenda, we have taken a step back and looked carefully at this body of publications. And we have concluded that it is time to clean up, streamline and simplify it.”

The “next-level supervision“ project aims to reform supervisory activities and increase the use of digital tools for supervision, according to the ECB website.

In making the changes announced Friday, ECB aimed to streamline its guidance, determine if some of its publications are outdated, and make it clear that supervisory expectations are not legally binding, according to the post.

The 40 documents that the ECB discontinued were identified as outdated, superseded or no longer relevant, and were discontinued so that supervisors and banks can rely on material that is up to date and relevant, the post said.

Other publications have been updated to clarify their contents or to reflect recent regulatory developments. Guides that require more in-depth revisions are being reviewed and will be completed by the end of the year, per the post.

Elderson said in the post that “simplification is not about doing less or lowering standards. It is about sharpening our focus on what truly matters so that banks can fulfill their essential role: supporting the real economy with the investment needed to boost European strategic autonomy and accelerate the digital, green and defence transitions.”

It was reported June 19 that the European Union plans to take several measures to improve the competitiveness of the banking sector, whose performance has lagged that of banks in the United States.

Banks in the EU have long argued that the requirements imposed upon them by supervisors, resolution authorities and national regulators often overlap and reduce the banks’ lending capacity.