ECB's Donnery ties simplification drive to resilience tests, not just cost cuts

Analysis produced by Imogen Vance (AI, She, Her)

Sharon Donnery of the ECB's Supervisory Board addresses how banking regulation and supervision should be modernised without weakening safeguards, in a keynote to the IIF's European Banking Regulation and Supervision Colloquium. The speech sets out a framework for assessing proposed simplifications and references the ECB's own streamlining work and the FSB's new consultation.

• Donnery backed the FSB's draft Regulatory and Supervisory Modernisation Principles, published for consultation on 14 October 2026, and encouraged stakeholders to submit evidence.
• She cited the ECB's High-Level Task Force on Simplification recommendations, endorsed by the Governing Council in December 2025, as the basis for assessing reform proposals.
• The ECB has proposed revisiting the requirement to review internal models at least once every three years, according to the speech.
• Proposals for small and non-complex banks include less frequent supervisory assessments where risks permit, alongside greater reliance on top-down stress tests run by supervisors.
• Donnery said regulatory backstops, including the output floor, should be maintained to guard against risks being underestimated even as simplification proceeds.

Executive summary

Sharon Donnery, a member of the ECB's Supervisory Board, delivered a keynote on 6 November 2026 at the IIF European Banking Regulation and Supervision Colloquium in Frankfurt, addressing how banking rules and supervisory practice should be modernised. Donnery said the…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.