In a written overview for her exchange with the Eurogroup, European Central Bank (ECB) Supervisory Board Chair Claudia Buch reported that supervisors are assessing banks’ action plans for cyber threats from frontier artificial intelligence (AI) models. All banks under ECB supervision had been asked to submit plans by the end of October 2026. The assessment will identify improvements and inform feedback on good practices. Banks need adequate investment in cyber defences and digital strategies supported by reliable systems, governance and risk management. The sector remains financially sound, but geopolitical shocks, rising corporate insolvencies and connections to private credit markets could weaken asset quality or transmit stress.
The overview also reviews progress under the ECB’s existing supervisory reform programme. Approval times for capital transactions and securitisations have fallen from several months to about two weeks, subject to prudential standards being met. A review of supervisory publications has discontinued 40 out of 100 guides, reports, letters and methodologies. Follow-up on less severe findings is left to banks, while more serious weaknesses trigger supervisory escalation and clear remediation timeframes. These changes simplify supervision without reducing prudential standards or supervisors’ ability to intervene.
The broader reform agenda links digital competitiveness to a more integrated European banking market, allowing banks to spread technology costs across larger customer bases. It calls for completing banking union, harmonising national legal rules and simplifying regulation as a package. Priorities include European deposit insurance, liquidity in resolution and freer allocation of capital and liquidity within banking groups, subject to safeguards. Basel standards, the output floor and supervisors’ independent powers should be preserved.