ECB to streamline governance requirements to ditch outdated advice

The European Central Bank (ECB) has said it will deprecate around 40 recommendations for banks that it has deemed outdated to streamline its guidance and provide banks with more freedom and clarity to follow good practices. In a blog post published 26 June, the ECB said it had reviewed 130 supervisory publications it has put out and found almost a third are outdated and make its guidance less confusing. Scrapped publications include a 2019 document on expected best practices for data aggregation and risk reporting, and pandemic-specific measures that no longer make sense for banks to follow. “Our ambition is clear: not to lower the bar, but to make supervisory dialogue more effective in an increasingly complex risk environment,” wrote Frank Elderson, ECB board member and vice chair of the supervisory board of the ECB. “For banks, this should mean enhanced predictability, improved planning capacity and more focus on managing material risks. In response to over 1,000 stakeholder comments, the ECB will also replace its July 2024 draft guide on governance and risk culture with a less proscriptive report on good practices due in the first quarter of 2027. The ECB defined good practices as “approaches that work well and which we become aware of in the context of our supervisory tasks”. “This means that a bank may be fully compliant with the applicable legal framework without implementing any of the good practices described in the guides, provided that it has put in place other practices that are more appropriate to its particular risk profile, business model and circumstances,” Elderson added. The ECB is undertaking a more thorough review of its guides which it said will be finalised by the end of 2026. In recent years the ECB has worked to improve the clarity of its rules and guidelines and responded to widespread industry complaints. In February 2025, it announced a plan to overhaul how it calculates risk to eliminate bureaucratic bottlenecks, and has attempted to respond quickly to evolving risks such as the impact of AI on the cybersecurity environments of banks.

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