Supervision. Explained. takes a closer look at European banking supervision and introduces some of the people and activities involved.
What are less significant institutions?
Published on: 13 December 2022
All supervised entities are classified as less significant institutions (LSIs) by default. They only become significant when they fulfil at least one of a specific set of criteria. So what are these criteria? What services do LSIs offer? And who is responsible for their supervision and oversight?What are less significant institutions?
Why should banks care about climate change?
Published on: 10 September 2021
Climate and environmental risks play a growing role for banks. Find out how extreme weather events can affect banks and what they can do to continue their important role as lenders in the future and do their part in the transition to a low carbon economy.Why should banks care about climate change?
What should banks focus on in 2021 and beyond?
Published on: 15 July 2021
Banks have weathered the first shock of the pandemic well, but what measures should they take once it is over?What should banks focus on in 2021 and beyond?
How are people’s needs changing traditional banks?
Published on: 15 July 2021
Banks are undergoing a digital transformation and the coronavirus pandemic has acted as a catalyst to speed up this process.How are people’s needs changing traditional banks?
What are internal models?
Published on: 6 April 2021
Banks have to maintain enough capital to cover unexpected losses. They can use internal models to calculate how much of it they need. Find out how this works.What are internal models?
What are provisions and non-performing loan (NPL) coverage?
Published on: 21 December2020
To cover the expected losses from loans, banks must book provisions. What are they, and what is meant with NPL coverage? And what ensures that banks properly cover these loans?What are provisions and non-performing loan (NPL) coverage?
Are the pandemic relief measures creating zombie firms?
Published on: 14 December2020
To help companies cope with the coronavirus crisis, the ECB and national governments have put in place measures that support banks’ lending to viable businesses. But are the relief measures also keeping alive unhealthy companies?Are the pandemic relief measures creating zombie firms?
The ECB Explains: the banking union
Published on: 21 August 2020
The banking union allows EU banking rules to be applied consistently. This helps to ensure the banking system is resilient. Our colleague Filipa explains the basis of the banking union and how it ensures people in Europe can confidently save, spend or borrow money.The ECB Explains: the banking union
The ECB Explains: European banking supervision
Published on: 21 August 2020
As European banking supervisor, we check that banks comply with the rules. Our colleague François explains how this ultimately serves the people of Europe, as it helps to ensure banks are safe and sound.The ECB Explains: European banking supervision
Why do banks need to hold capital?
Published on: 23 May 2019
We all rely on banks, for example to look after our deposits or to lend us money, and we need them to be safe and sound. Banks have to hold enough capital to ensure they can keep going in good times and bad. But what is capital and how does it make banks more resilient?Why do banks need to hold capital?
What is the ECB’s role in bank mergers and acquisitions?
Published on: 5 April 2019
When two banks are thinking of merging, the ECB maintains a neutral stance and assesses the project put forward by them purely on technical grounds. What does it look at? And how does its role depend on the consolidation form they choose? Read our explainer to find out.What is the ECB’s role in bank mergers and acquisitions?
Understanding the 2018 EU-wide stress test
Published on: 2 November 2018
Euro area banks are more resilient to financial shocks, the stress test led by the European Banking Authority shows. Learn more about the scenarios used in the test, what role the ECB plays and how the results will feed into supervisors’ decisions about individual banks.Understanding the 2018 EU-wide stress test
How is the Supervisory Board Chair chosen?
Published on: 17 July 2018
A new Chair is appointed to the Supervisory Board every five years. The position is advertised publicly and any EU citizen with sound experience in banking and finance can apply. Find out who is involved in choosing the final candidate and what it takes to secure the position.How is the Supervisory Board Chair chosen?
Why supervise commercial banks?
Published on: 30 April 2018
As bank customers we need commercial banks to be healthy so that we have access to the financial services they provide. Banks also need to stay healthy to ensure the financial system remains stable.Why supervise commercial banks?
How does the ECB supervise banks that use fintech?
Published on: 27 March 2018
For many of us it’s now quite normal to pay for things using our smartphones. Our banks use innovative technology known as fintech to provide this kind of service. But what exactly is fintech and how can we be sure it’s safe?How does the ECB supervise banks that use fintech?
Why is it important for banks to reduce bad loans?
Published on: 7 February 2018
The ECB supports banks under its supervision in tackling bad loans, i.e. loans that have not been repaid for a certain amount of time or that are unlikely to be repaid. Find out why bad loans are a problem and what the ECB’s role is on this front.Why is it important for banks to reduce bad loans?
What does it mean when a bank is failing or likely to fail?
Published on: 14 June 2017
Banks, just like any other business, can fail. However, the important services they provide to the economy and the possibility that their failure will damage other parts of the economy mean that there are special rules regarding bank failures.What does it mean when a bank is failing or likely to fail?
What is the ECB sensitivity analysis of IRRBB?
Published on: 28 February 2017
The ECB sensitivity analysis of interest rate risk in the banking book (IRRBB) will examine how hypothetical changes in the interest rate environment would affect banks. Find out more about this exercise and how it feeds into the broader supervisory process.What is the ECB sensitivity analysis of IRRBB?
What is a precautionary recapitalisation and how does it work?
Published on: 27 December 2016
Find out what it means for a bank to receive a precautionary recapitalisation and what part the ECB plays in the process.What is a precautionary recapitalisation and how does it work?
European banking supervision at a glance
Published on: 4 November 2016
In European banking supervision, the ECB is responsible for supervising the largest banks. Find out more about the objectives and functions of European banking supervision.European banking supervision at a glance
What are non-performing loans (NPLs)?
Published on: 12 September 2016
Loans are considered “non-performing” when there are indications that they are unlikely to be repaid or when more than 90 days have passed without the borrower paying the agreed instalments. Why are bad loans an issue and what is our role as a supervisor?What are non-performing loans (NPLs)?
Frequently asked questions on the 2016 EU-wide stress test
Published on: 26 July 2016
The 2016 bank stress test results will be published on 29 July 2016 by the European Banking Authority. Find out what this year’s stress test entails and how it feeds into the broader supervisory process.Frequently asked questions on the 2016 EU-wide stress test
What are supervisory colleges?
Published on: 14 July 2016
In an increasingly globalised world, it is crucial that banks operating in more than one country are supervised as effectively as possible. Supervisory colleges play an important role in this regard.What are supervisory colleges?
What is the SREP?
Published on: 16 June 2016
Supervisors regularly assess and measure the risks for each bank. This core activity is called the Supervisory Review and Evaluation Process, or SREP for short. What is it about and what does it mean for banks?What is the SREP?
What is fit and proper supervision?
Published on: 18 March 2016
Supervisors assess whether board members of banks are “fit and proper” to do their jobs. In other words, we check their reputation and assess their knowledge, skills and experience to perform their duties.What is fit and proper supervision?
What is a qualifying holding?
Published on: 18 March 2016
One of our tasks is to assess proposed acquisitions of “qualifying holdings” in a bank. The ECB takes such decisions as part of the common procedures that apply to all banks under European banking supervision.What is a qualifying holding?
What is AnaCredit?
Published on: 11 November 2015
AnaCredit will be a new dataset with detailed information on individual bank loans in the euro area. The name stands for “analytical credit datasets”.What is AnaCredit?
Whistleblowers act in the greater good
Published on: 8 September 2015
Breach reports, or whistleblowing, are an important tool in the detection of misconduct by supervised banks or banking supervisors. Citizens who suspect breaches of relevant EU law act in the public interest when reporting those breaches to the ECB.Whistleblowers act in the greater good
Published on: 19 May 2015
Data are at the heart of banking supervision and a truly European approach to supervision can only be achieved with comparable information. This article describes the ECB’s harmonised approach to collecting data and looks at the role of statistics in day-to-day supervision.Supervisory statistics
Explaining the ABoR
Published on: 25 March 2015
Jean-Paul Redouin, Chair of the Administrative Board of Review (ABoR), answers questions on its specific role in the new era of ECB Banking Supervision.Explaining the ABoR
Lithuania: High supervisory standards important
Published on: 29 December 2014
With the adoption of the euro, Lithuania will join the Single Supervisory Mechanism on 1 January 2015. Ingrida Šimonytė, Lietuvos bankas’ Deputy Chairperson, will become a Member of the Supervisory Board. In a web-interview, she talks about the main features of Lithuania’s banking sector and the challenges for ECB Banking Supervision.Lithuania: High supervisory standards important