ECB Banking Supervision publishes priorities for 2016

• ECB Banking Supervision identified five focus areas for 2016
• Priorities build on assessment of key risks banks are facing
• Supervisory initiatives will be carried out for each risk

The European Central Bank (ECB) today published its 2016 priorities for supervising the significant banks in the euro area. The five areas build on the assessment of key risks faced by banks in the current environment. Business model and profitability risk ranks highest, followed by other key issues whose importance varies across the euro area countries.

“As we enter the second full year of supervising the banks in the euro area, we want to make transparent right from the beginning of the year what will guide us in our work,” said Danièle Nouy, Chair of the ECB’s Supervisory Board. “The priorities are an essential tool to coordinate supervisory actions across banks in a harmonised and proportionate way, while contributing to a level playing field and supporting growth.”

The five supervisory priorities for 2016 are:

• business model and profitability risk;
• credit risk;
• capital adequacy;
• risk governance and data quality;
• liquidity.

A number of supervisory initiatives will be carried out for each of the priorities. In some cases, full implementation may take more than one year. At individual bank level, supervisory activity may have to be adjusted to the specific risk profile of each credit institution.

A more detailed explanation of the 2016 supervisory priorities can be found on the ECB’s banking supervision website.

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