ECB's Elderson defends deliberate de-prioritisation in bank supervision
Frank Elderson, ECB Supervisory Board Vice-Chair, sets out the three pillars reshaping euro area bank supervision: risk prioritisation, procedural simplification and faster enforcement escalation. He gives concrete figures on guidance cuts, approval timelines and stress-test data reduction, and argues that strong prudential standards and competitiveness are not in tension.
- The ECB's Risk Tolerance Framework formally accepts that lower-priority risk areas at individual banks will not receive the same intensive scrutiny every year.
- The ECB has reviewed more than 100 supervisory guidance publications, discontinuing around 40 of them.
- Processing time for standardised, less-risky securitisation transactions has fallen from three months to an average of around seven days.
- Stress-testing data points have been reduced by around 55%, and approval timelines for capital-related decisions have fallen to less than six days.
- The non-bank financial sector has doubled in size since 2008 and now accounts for over half of euro area financial sector assets.