In an interview, European Central Bank (ECB) Executive Board member and Supervisory Board Vice-Chair Frank Elderson said the ECB's simplification agenda is intended to make supervision faster and more targeted, not to deregulate banks or reduce capital requirements. He argued that ECB research shows current capital levels do not constrain lending, that requirements have remained broadly stable in recent years, and that non-financial risks can be an early indicator of later financial problems. The operational changes he highlighted include a more risk-based annual supervisory review of 111 significant banks, with less frequent reassessment of areas where no significant findings have emerged, and a review of nearly 100 publications setting supervisory expectations and good practices, a significant number of which will be retired, shortened or consolidated and clarified as non-binding. Approval times for securitisations that meet simple and transparent criteria have been cut to seven days from about three months. Elderson also said EU competitiveness should be pursued through deeper banking and capital markets integration rather than deregulation, and warned that scaling back corporate sustainability reporting too far could leave banks and insurers collecting climate- and nature-related risk data directly from clients through questionnaires.
European Central Bank2026-06-03
European Central Bank says simplification will streamline supervision and retire guidance without lowering capital requirements
The European Central Bank’s Frank Elderson said the ECB’s simplification agenda aims to make supervision faster and more targeted without deregulating banks or lowering capital requirements, noting that current capital levels do not constrain lending. He highlighted a more risk-based supervisory review of 111 significant banks, streamlining nearly 100 supervisory publications, and cutting approval times for simple and transparent securitisations to seven days. Elderson argued that EU competitiveness should rely on deeper banking and capital markets integration rather than deregulation and warned that scaling back corporate sustainability reporting could force banks and insurers to collect climate and nature risk data directly from clients.