ECB plans October review of outstanding bank supervision measures

ECB Banking Supervision plans to review its outstanding supervisory measures from mid-October, Vice-Chair Frank Elderson said at a conference in Vienna on 6 October 2026. Banks will receive information on what the review means for their findings and measures. The ECB will consider the severity of each underlying weakness, its relevance to a bank’s financial soundness and the progress made in addressing it, among other factors. [1]

Under the planned approach, the lowest-impact findings, known as F1 findings, will be communicated as supervisory observations rather than generate measures. Low-severity F2 findings and measures may be closed where further supervisory assessment is no longer warranted. Elderson also said mandatory verification by internal audit or internal validation would be removed for low-severity findings related to banks’ internal models. [1]

The changes build on a severity-based approach the ECB began introducing in 2025. Banks can already close low-severity findings themselves, provided they retain evidence for future supervisory reviews. Elderson said lighter follow-up on minor issues would free attention for material risks, without lowering supervisory standards. Where banks fail to address material weaknesses promptly, he said supervisors are making greater use of escalating measures, including capital requirements, business restrictions and periodic penalty payments. [1]