In an interview, European Central Bank Supervisory Board member Patrick Montagner discussed two ECB reports published in December, distinguishing between Governing Council recommendations on possible revisions to EU banking rules that depend on future European Commission proposals and the legislative process, and a Supervisory Board package of operational measures to streamline euro area banking supervision within the ECB’s remit, with some changes starting in 2026. The Supervisory Board report centres on making supervision more risk-focused and less process-heavy, including an overhaul of the Supervisory Review and Evaluation Process to shorten the assessment cycle and issue more targeted conclusions to banks, work that continues into 2026. Other measures include tighter integration of Joint Supervisory Teams with thematic experts, greater delegation to speed certain authorisation decisions via secure fast-track assessments already used for securitisation and share buybacks, and wider use of artificial intelligence to automate analysis of large repetitive documents alongside clearer supervisory requests. Montagner also flagged efforts to reduce the burden of bank stress testing and revise methodology while retaining stress tests as a core supervisory tool, noting the shared role of the European Banking Authority and the European Systemic Risk Board. On potential rule changes under discussion at EU level, he described a direction of travel towards simplifying how capital buffers are presented, including possible consolidation, while not lowering capital requirements; support for reducing reporting burdens for small and non-complex institutions without weakening prudential standards; and a focus on greater legal certainty and investor understanding for Additional Tier 1 instruments rather than reconsidering their role. He also noted that periodic penalty payments can apply where banks miss deadlines for responding to supervisory requests, with a right to be heard, the option to appeal and penalties intended to be proportionate.
European Central Bank 2026-02-03
European Central Bank outlines supervisory simplification package with shorter SREP cycle, fast-track authorisations and greater use of AI
European Central Bank Supervisory Board member Patrick Montagner highlighted ECB reports on potential EU banking rule revisions and operational measures to streamline euro area banking supervision, with changes starting in 2026. Key initiatives include a risk-focused supervisory approach, enhanced use of artificial intelligence, and efforts to simplify capital buffer presentations without lowering requirements.