ECB endorses recommendations for simplifying banking regulation and supervision

The European Central Bank (ECB) Governing Council has endorsed the High-Level Task Force (HLTF) recommendations for simplifying the European prudential, supervisory, and reporting framework.

The recommendations will inform the 2026 European Commission report on the banking sector in the Single Market. They emphasize maintaining resilience, effectiveness, European harmonization, and international cooperation.

The key recommendations include:

• Simplifying the regulatory framework, including reducing the number of capital elements and streamlining directives into regulations.
• Adjusting the design of capital instruments and creating a simpler regime for smaller banks.
• Aligning MREL and TLAC frameworks and simplifying the EU stress test.
• Enhancing supervision by increasing risk focus and harmonizing practices through the EU Single Rulebook.
• Improving the reporting framework by establishing an integrated system, reducing data resubmissions, and increasing transparency and coordination among stakeholders.

These measures aim to support the finalization of the savings and investment union and banking union initiatives.

For more information, visit the official ECB press release at ECB press release.