The European Central Bank said today it would cut the number of reports it expects from banks by nearly a third and soften its expectations about good governance, partly in response to pushback from the industry.
The moves come as regulators around the world roll back some of the most intrusive measures put in place after the global financial crisis, led by an aggressive deregulation agenda by US President Donald Trump’s administration.
“Our objective is simple: to ensure that our supervisory guidance remains clear, consistent and fit for purpose in an increasingly complex risk environment,” ECB board member Frank Elderson said in a blog post.
As part of this effort, the ECB said it would scrap around 40 out of roughly 130 reports because it deems them “outdated, superseded or no longer relevant”.
In addition, it would downgrade a draft guide setting out its expectations for lenders’ governance and risk culture, which covered the inner workings of a bank from the remuneration and time-commitment of its board members to the protection of whistleblowers.
Instead, the ECB would now publish a report on good practices, which will not be binding.
“This means that a bank may be fully compliant with the applicable legal framework without implementing any of the good practices described in the guides, provided that it has put in place other practices that are more appropriate,” the ECB said.
Other ECB guides, including a sensitive one about risky forms of lending, are also under review, with conclusion expected by the end of this year.
