ECB
ECBAlso called european Central Bank, ECB Banking Supervision
The European Central Bank is the central bank of the euro area. It sets monetary policy for countries that use the euro. Since November 2014 it has also directly supervised the largest banks in those countries through the Single Supervisory Mechanism, working with national supervisors that oversee smaller banks.
How it works
Each significant bank has a joint supervisory team of ECB and national staff. The team runs the annual supervisory review and evaluation process, sets bank-specific capital requirements and conducts on-site inspections. The ECB grants and withdraws banking licences for all euro area banks and approves qualifying holdings. Smaller banks stay with national authorities under ECB oversight.
For a significant bank, the ECB is the regulator that sets its capital add-ons and reviews its risk models. Its supervisory priorities shape where banks spend compliance budgets, from risk data aggregation to climate risk and IT resilience. It publishes guides on its expectations, such as the 2024 guide on risk data aggregation.
The rules
Gives the ECB direct supervision of significant banks and oversight of the wider system within the Single Supervisory Mechanism.
Credit institutions in the euro area and countries in close cooperationSets price stability as the primary objective of monetary policy and allows specific supervisory tasks to be given to the ECB.
The European System of Central BanksCommon questions
Which banks does the ECB supervise directly?
The ECB directly supervises banks classed as significant, based on size, economic importance, cross-border activity or public financial support. Any bank with total assets above EUR 30 billion qualifies. The list is updated each year.
What is the Single Supervisory Mechanism?
The Single Supervisory Mechanism is the system of banking supervision in the euro area. It combines the ECB and national supervisors. The ECB directly supervises significant banks, and national authorities supervise less significant ones under ECB oversight.
How does the ECB differ from the EBA?
The EBA writes technical rules for banks across the whole EU. The ECB applies supervision to banks in the euro area and countries that join the mechanism. The ECB also sets monetary policy, which the EBA does not.
What is SREP?
The supervisory review and evaluation process is the annual assessment of each bank's business model, governance, risks, capital and liquidity. It leads to bank-specific requirements, including Pillar 2 capital.
