In a speech at the VIII Banking Forum, the Bank of Spain Governor José Luis Escrivá outlined a set of proposals to simplify banking regulation, supervision and reporting in Europe and in Spain, positioning the initiative as a competitiveness and effectiveness exercise that should not weaken resilience. The Bank of Spain described internal work via a cross-departmental group and pointed to steps already taken to streamline its own reporting requirements as the national supervisor. The proposals were organised around five areas: making Single Supervisory Mechanism processes more predictable and risk-oriented, including rebalancing the supervisory review and evaluation process (SREP) away from a primary focus on capital add-ons and towards qualitative metrics on governance, business model weaknesses and emerging risks, tightening the stock and use of supervisory guidance so expectations do not become de facto binding requirements, and reinforcing Joint Supervisory Teams to deliver a consistent supervisory message. To address institutional complexity and the growth of Level 2 and Level 3 products, the Bank of Spain cited an analysis of European Banking Authority (EBA) capital and resolution mandates and proposed de-prioritising and simplifying more than half of pending mandates, including reducing around 35% of mandates in the new prudential package and simplifying a further 15%, alongside work to advance the EBA’s Pillar 3 data hub. On requirements, the speech proposed simplifying Europe’s capital buffer architecture into a single microprudential buffer (combining the capital conservation buffer with Pillar 2 requirements and guidance) and a single macroprudential buffer (combining systemic and countercyclical buffers), and streamlining resolution by moving to a single requirement calibrated as a fixed percentage of total assets in equity and subordinated debt aligned with access to the European resolution fund, or alternatively extending Financial Stability Board total loss-absorbing capacity (TLAC) requirements beyond global systemically important banks to all resolution entities. The Bank of Spain also argued for stronger proportionality for small and non-complex institutions, including simplified market risk calculations, scope to reduce liquidity requirements for low-risk banks with stable deposit bases, and extending certain supervisory review cycles to five years for low-risk firms with simpler recovery plans. On reporting, the speech noted that obligations have risen by 50% over five years and that, by end-2024, banks had to submit more than 740 statements and over 116,000 data points per institution and reference date, with two-thirds under FINREP and COREP, supplemented by ad hoc requests. It stated that an amendment to Circular 4/2017, once approved, will remove seven financial statements representing 34% of domestically required financial data, with a further potential reduction of 16% under review, alongside the elimination of some recurring ad hoc requests and tighter internal governance for any new data demands.
Bank of Spain 2025-11-25
Bank of Spain sets out regulatory and supervisory simplification agenda including a 35% cut in pending EBA mandates and a 34% reduction in domestic reporting data
Bank of Spain Governor José Luis Escrivá proposed simplifying banking regulation and supervision in Europe and Spain to enhance competitiveness without compromising resilience. Key proposals include making supervisory processes more predictable, simplifying capital buffer architecture, and reducing reporting obligations. The Bank aims to streamline mandates and reporting requirements, significantly reducing financial statements and data submissions.