In a keynote speech at the ECB Forum on Banking Supervision 2025, European Central Bank Executive Board member and Supervisory Board Vice-Chair Frank Elderson set out how the ECB is pursuing “simplification without deregulation” by reducing unnecessary complexity in prudential regulation, supervision and reporting while maintaining bank resilience. He also pointed to strengthened euro area bank fundamentals as the basis for supporting the real economy. Elderson attributed rising complexity to nationally fragmented rulemaking and to framework growth in response to an increasingly complex risk environment, including cyber risk. He highlighted supervisory simplification measures already underway, centred on the 2022 reform of the Supervisory Review and Evaluation Process (SREP), including more risk-based, multi-year supervisory planning and more focused outcomes. SREP measures fell from 700 in 2021 to below 400 in 2025, and issuing decisions by end-October is intended to communicate key findings earlier. The ECB is also streamlining processes through its “next-level supervision” project, including faster fit and proper assessments using machine learning, and a fast-track process for simple securitisations tested in the first half of 2025 that is intended to reduce approval times from three months to ten working days. Further initiatives include building an integrated reporting framework for statistical, prudential and resolution authorities and exploring greater proportionality for small and non-complex institutions, which already submit up to 30% of the data required from large banks. The ECB’s Governing Council has created a High-Level Task Force on Simplification to develop proposals for simplifying the European prudential regulatory, supervisory and reporting framework. The Task Force plans to deliver proposals to the Governing Council by end-2025, after which they will be presented to the European Commission.
European Central Bank 2025-11-14
European Central Bank establishes a High-Level Task Force on prudential simplification and outlines steps to streamline supervision and reporting
ECB Executive Board member Frank Elderson stressed "simplification without deregulation" at the ECB Forum on Banking Supervision 2025, aiming to reduce prudential regulation complexity while maintaining bank resilience. He highlighted reforms to the Supervisory Review and Evaluation Process (SREP) and the "next-level supervision" project, using machine learning and fast-track processes. The ECB's Governing Council has set up a High-Level Task Force on Simplification to propose further regulatory simplifications by the end of 2025.