The European Central Bank (ECB) is easing some of its supervisory expectations for banks by withdrawing dozens of outdated guidance documents and making its governance recommendations less prescriptive in response to industry feedback.
The ECB said it will retire around 40 supervisory publications that are no longer considered relevant, including temporary measures introduced during the COVID-19 pandemic such as its de facto dividend ban, as well as guidance on data collection and reporting.
The central bank will also downgrade a draft guide outlining its expectations on banks’ governance and risk culture. Instead of issuing binding supervisory guidance, it will publish a report highlighting examples of good practices that lenders may choose to adopt.
The ECB said banks could remain fully compliant with the legal framework without implementing the practices outlined in the report, provided they have alternative measures that are more appropriate.
ECB Executive Board member Frank Elderson said the objective was to ensure supervisory guidance remained “clear, consistent and fit for purpose in an increasingly complex risk environment.”
The move comes as regulators globally scale back some of the stricter rules introduced after the global financial crisis, with deregulatory efforts gaining momentum following policy changes in the United States.
The ECB added that several other supervisory guides, including one covering higher-risk lending practices, are also under review, with the assessment expected to be completed by the end of the year
