ECB says timely remediation key to simpler supervision

• ECB says supervision should be more focused on material risks and more effective in driving timely improvements.
• By end-2025, outstanding measures across significant banks had risen to around 12,000, or about 100 per bank.
• ECB will launch a refocusing exercise in mid-October and further inform banks on implications for their findings and measures.

Action

Frank Elderson said European banking supervision is placing effectiveness and timely remediation at the centre of its dialogue with banks. He said simplification and effective supervision are not competing objectives.

ECB says timely remediation key to simpler supervision

He said ECB Banking Supervision is making clearer that all supervisory findings need to be remediated in a timely and durable manner. For low-severity findings, banks are expected to confirm they have taken sufficient action to ensure compliance without further documentation.

Elderson said the ECB started a tiered approach in 2025 for findings and measures, aligning follow-up with risk severity. He said the most serious weaknesses require swift action, while less severe issues can be handled proportionately.

Respondents

The contribution was by Frank Elderson, Vice-Chair of the Supervisory Board of the ECB and Member of the Executive Board of the ECB. It was delivered in Vienna on 6 October 2026.

Elderson said outstanding measures across significant banks had reached around 12,000 by the end of 2025. He said that was around 100 measures per bank on average.

Effective

ECB Banking Supervision will launch a refocusing exercise in mid-October. The exercise will critically review the stock of measures accumulated in recent years and tailor engagement to the risk profile of the underlying weakness.

Banks will receive further information on the implications for their individual stock of findings and measures. The ECB said the approach will continue to guide the identification of and follow-up to findings and measures.

Elderson said F1 findings will in future be communicated as supervisory observations rather than generating corresponding measures. He also said low-severity F2 findings and measures may be closed where further supervisory assessment is no longer warranted.

He said the mandatory verification of remediation by internal audit or internal validation will be removed for low-severity F1 or F2 findings related to internal models.

Penalty

Elderson said the ECB toolkit includes capital requirements, qualitative measures, business restrictions and periodic penalty payments as enforcement measures. He said supervisors must be prepared to use the right tools at the right time, in a proportionate manner.