If a significant bank fails to comply with prudential requirements or with supervisory measures adopted in an ECB decision the ECB can, depending on the infringement, impose enforcement measures and/or efficient, proportionate and dissuasive sanctions (for more information on sanctions please check the supervisory sanctions web page).
Enforcement measures are aimed at compelling supervised banks to comply with the prudential requirements laid down in supervisory decisions or regulations. These measures can only be imposed in the case of ongoing breaches.
What enforcement measures can the ECB impose?
Periodic penalty payments
Periodic penalty payments (PPPs) are the enforcement measures directly available to the ECB. PPPs are imposed on banks in continued breach of obligations under ECB decisions or regulations. The goal is to ensure compliance as soon as possible, as in this case the bank concerned must pay a daily amount – which can be as much as 5% of its average daily turnover – for every day the infringement continues, up to a maximum period of six months (after which further actions can be taken).
The overall amount of the accrued PPPs imposed by the ECB on a bank will be published on the ECB Banking Supervision website, including the type and nature of the breach and the identity of the supervised entity concerned.
Other enforcement measures
The ECB can also apply the enforcement measures available in the national implementing legislation in the relevant participating Member State. It can instruct the national competent authorities to adopt purely national enforcement measures.
ECB decisions that impose enforcement measures may be reviewed by the Administrative Board of Review at the request of the bank concerned.