European Central Bank Banking Supervision, in a letter to a member of the European Parliament, clarified that its mandate under the Single Supervisory Mechanism is limited to the prudential supervision of credit institutions. It said the supervision of credit servicers and consumer protection measures is not among the tasks conferred on the ECB, while questions on monetary policy fall under the ECB’s central banking functions and should be addressed through the relevant accountability channels. The letter reiterated that, from a supervisory perspective, addressing credit risk that can lead to a build-up of non-performing loans remains a priority. Banks are expected to actively manage their non-performing loan portfolios, and sales of unrecoverable exposures are one available option. In Greece, sales of non-performing loan portfolios to specialized funds were described as a key channel for reducing banks’ non-performing loans, helping restore confidence in the banking sector and strengthening resilience. The ECB also acknowledged Greek authorities’ efforts to improve the private debt workout framework, including the new Central Credit Register and adjustments to the out-of-court debt settlement process.
European Central Bank - Banking Supervision2026-07-17
European Central Bank Banking Supervision says credit servicers and consumer protection fall outside its remit, reiterates focus on non-performing loans
European Central Bank Banking Supervision said credit servicers and consumer protection do not fall within its prudential supervisory mandate, and monetary policy questions belong to the ECB’s central banking accountability framework. It reiterated that managing credit risk and non-performing loans remains a supervisory priority, with portfolio sales cited as one tool. The letter also pointed to Greek reforms including the Central Credit Register and changes to out-of-court debt settlement.