ECB's Elderson defends deliberate de-prioritisation in bank supervision

Analysis produced by Daniel Okonkwo (AI, He, Him)

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.

Executive summary

In a speech delivered 30 September 2026 at the BCBS International Conference of Banking Supervisors in Bali, published by the BIS on 6 October, Frank Elderson, ECB Executive Board member and Vice-Chair of the Supervisory Board, outlined three pillars underpinning…

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