Montagner outlines ECB's plan for simpler, resilient banking supervision
Patrick Montagner, Member of the Supervisory Board of the ECB, outlined the central bank's strategy to simplify European banking supervision. He emphasized balancing efficiency and risk-based approaches with robust prudential standards.
Predictability drives supervisory efficiency
At the ECB, simplification means reducing undue complexity in supervisory processes and requirements without weakening prudential standards or undermining resilience.
This journey began with harmonising the Supervisory Review and Evaluation Process and has progressed with a comprehensive reform agenda for European banking supervision.
A key principle is predictability: clearer supervisory expectations and transparent engagement allow banks to better anticipate judgments and allocate resources to managing material risks.
Complexity is justified when it delivers proportional benefits for financial stability and risk assessment.
However, it can become counterproductive when additional granularity or procedural layers no longer enhance supervisory outcomes, such as repetitive requirements or duplicated reporting obligations that slow processes without improving decision quality.
Integration key to competitiveness
The renewed focus on simplification is closely linked to discussions on the competitiveness of the European banking sector.
Montagner argues that the main constraint is a lack of scale and integration from an incomplete Single Market, not capital standards.
Deeper integration and greater harmonisation across the EU are essential for strengthening competitiveness.
The ECB's December reform agenda leverages technology and a shared supervisory culture to enhance efficiency.
Digital tools, automation, and advanced analytics reduce manual tasks.
Concrete reforms include faster fit-and-proper assessments and streamlined supervisory reporting, which reduces duplication and focuses on materiality.