Total annual fees

The ECB levies an annual supervisory fee on all supervised banks to cover its costs in relation to banking supervision.

The total amount of annual supervisory fees is published by 30 April each year in an ECB decision.

The ECB Annual Report on supervisory activities contains information on the actual expenditure and staffing for ECB supervisory tasks and describes the supervisory fees framework for that reporting period.

ECB Annual Report on supervisory activities

What does the fee cover?

The total amount of annual supervisory fees covers the ECB’s expenditure in relation to its supervisory tasks for the relevant fee period, i.e. for that particular year. It consists of:

  • the estimated total annual expenditure for the year
  • the surplus (or deficit) from the previous year, if any, that will be refunded (or charged)

The total amount of annual supervisory fees also includes:

  • any amounts received or refunded in the context of Article 7 of the ECB Regulation on supervisory fees relating to changes, such as the authorisation of new supervised banks, the withdrawal of authorisation, or changes in status from significant to less significant or vice versa
  • any fees related to previous fee periods that were not collectible
  • any interest payments received for late payment by the fee debtor

ECB Regulation on supervisory fees
Change in situation

Total annual supervisory fee for the fee period

For the 2019 fee period, the total annual supervisory fee is €576.0 million (please see table below). This is an increase of €101.2 million on the total annual supervisory fee levied in 2018, which amounted to €474.8 million.

Over 40% of the increase in the annual supervisory fee estimate is due to levying the supervisory fee based on cost estimates. Unlike in previous years when ECB Banking Supervision carried over surpluses from earlier years (which reduced the overall fee), the year 2018 ended with a €15.3 million deficit that will be carried over and appears in the fee estimate for 2019.

 
Annual expenditure estimate 2019
Annual expenditure estimate 2018
Annual expenditure estimate 2017
Total supervisory fee* 576.0 474.8 425.0
Estimated expenditure 559.0 502.5 464.7
Surplus/deficit from previous year 15.3 -27.9 -41.1
Other adjustments 1.7 0.2 1.4

* All amounts are in €m. Totals may not add up due to rounding.

Total annual expenditure

The ECB’s annual expenditure for banking supervision primarily consists of costs directly related to its supervisory tasks:

  • directly supervising significant banks or banking groups: mainly costs associated with the Joint Supervisory Teams and on-site inspections
  • overseeing the supervision of less significant banks or banking groups: costs associated with oversight activities
  • performing horizontal tasks and specialised services: costs associated with activities such as the work of the Secretariat to the Supervisory Board, macroprudential tasks, statistical services and dedicated legal services

It also includes costs indirectly related to the ECB’s supervisory tasks, such as shared services provided by the ECB’s support business areas, including premises, human resources management and information technology (IT) services.

For each grouping, the costs reported include the allocation of shared services provided by the ECB’s support business areas.

Budgeted expenditure for regular tasks has stabilised. However, an increase in resources for 2019 is necessary due to external factors, most notably the United Kingdom’s withdrawal from the European Union. The Governing Council approved a headcount increase for 2019 of 90 full time equivalents (FTEs) for core ECB Banking Supervision business areas, and 18 FTEs for business areas providing shared services for supervision-related tasks. Of the 90 FTEs almost half are due to Brexit-related staffing needs and the rest is primarily associated with the internalisation of resources for stress-testing activities that were formerly provided by external consultants.

As shown in the table below, the growth in expenditure is primarily related to the direct supervision of significant banks.

 
Estimated expenditure
2019
Estimated expenditure
2018
Actual expenditure 2018
Actual expenditure 2017
Expenditure for banking supervision tasks* 559.0 502.5 517.8 436.7
Direct supervision of significant banks 336.2 283.4 304.8 242.9
Oversight of less significant banks 33.2 27.1 28.7 24.0
Horizontal tasks and specialised services 189.6 192.0 184.4 169.8

* All amounts are in €m. Totals may not add up due to rounding.

Organigram
Supervision. Explained. What is the targeted review of internal models?

Surplus or deficit

The total amount levied by the ECB must cover, but not exceed, the expenditure incurred by the ECB in the relevant fee period in relation to its supervisory tasks. As the ECB’s decision on the total annual supervisory fees is based on an estimate, a surplus or deficit between the amount collected and the actual expenditure incurred can arise. The surplus or deficit from the previous year, if any, is deducted from or added to the total amount of annual supervisory fees for the following year.

At the end of 2018, the ECB’s expenditure for supervisory tasks stood at €517.8 million. This was 3% more than estimated, resulting in a deficit of €15.3 million, compared with the expenditure estimated for that year. This is included in the total amount to be levied in 2019.

Annual accounts of the ECB

Other adjustments

Each supervised bank or banking group must pay a fee for the year, or part of the year, in respect of which it is supervised. Where changes in a bank’s or banking group’s situation occur after the ECB has finalised the individual supervisory fee notice, the adjustment will be reflected in the total amount of annual supervisory fees for the next fee period. Changes in situation include authorisation of new supervised banks, the withdrawal of authorisation, or changes in status from significant to less significant or vice versa.

Change in situation

The ECB takes all the necessary steps to collect supervisory fees from supervised banks and banking groups. Interest on late payments received and any amounts that were not collectible will be taken into account in determining the total amount of annual supervisory fees for the following year.

The other adjustments related to previous fee periods – which have been incorporated into the 2019 annual supervisory fee estimate – amount to €1.7 million.

How much does each category of bank pay?

The amount that is recovered through annual supervisory fees depends on whether the supervised entity is significant (significant institutions or SI) or less significant (less significant institution or LSI) and, therefore, the extent to which it is scrutinised by the ECB.

 
Fees on SIs or
banking groups 2019
Fees on LSIs or
banking groups 2019
Total
Total supervisory fee* 524.2 51.8 576.0
Annual expenditure estimate 508.7 50.3 559.0
Surplus/deficit carried forward 14.0 1.4 15.3
Other adjustments 1.6 0.1 1.7

* All amounts are in €m. Totals may not add up due to rounding.