Frank Elderson, vice-chair of the European Central Bank’s Supervisory Board and member of its Executive Board, said during a panel discussion that ECB Banking Supervision will launch a refocusing exercise in mid-October to review outstanding supervisory measures and align follow-up more closely with risk severity. The exercise extends the ECB’s shift toward more risk-focused supervision, with simpler treatment of lower-impact issues and stronger intervention where banks fail to remediate material weaknesses promptly and durably. The stock of outstanding measures across significant banks reached around 12,000 at the end of 2025, or about 100 per bank on average. Net closures exceeded new measures by 1,200 during 2025, and the stock has fallen by a further 600 in 2026. Under the revised approach, the least severe F1 findings will be communicated as supervisory observations rather than generate measures. Low-severity F2 findings and measures will receive proportionate follow-up and may be closed where further assessment is unwarranted, while mandatory internal audit or validation of remediation will be removed for F1 and F2 internal-model findings. Material or persistent weaknesses will remain subject to escalation, including qualitative requirements, capital measures, business restrictions and periodic penalty payments.
European Central Bank to review outstanding supervisory measures and simplify low-severity findings
The European Central Bank will launch a mid-October review of outstanding supervisory measures, focusing follow-up on the findings with the greatest prudential impact. F1 findings will become supervisory observations, while low-severity F2 issues may receive lighter follow-up or be closed. Persistent material weaknesses will remain subject to escalation through capital, qualitative and enforcement measures.