ECB-SSM redraws the boundary between prudential rules and supervisory expectations

EU RegCORE Client Alert | Banking Union

Fewer publications, clearer legal status and a more judgementled model of Banking Union supervision

QuickTake

European banking supervision has spent more than a decade building an extensive body of guides, methodologies, supervisory letters and reports. It is now beginning to rationalise the architecture it created.

On 26 June 2026, the European Central Bank (ECB), acting in its role at the head of the Banking Union’s Single Supervisory Mechanism (SSM), announcedSee details here, here and here.Show Footnote the results of a review of approximately 130 supervisory publications. Around 40 documents are being discontinued, several key guides will be revised and the ECB-SSM has introduced a clearer classification of its different supervisory publications. More fundamentally, the ECB-SSM has expressly stated that its supervisory expectations are non-binding, that departures from its guidance should not automatically trigger supervisory action and that any supervisory concern should instead be connected to the applicable legal framework and the risks presented by the individual institution.

This is therefore more than an exercise in document management. It represents a recalibration of supervisory soft law and of the relationship between legal requirements, supervisory expectations, observed good practices and institution-specific supervisory judgement.

Bottom line: despite the headlines the prudential bar is not being lowered. The ECB-SSM is instead seeking to ensure that the bar is derived from the law and applied to the risks that matter—rather than being constructed through an accumulation of documents that may, in practice, have operated as an additional layer of quasi-rules.

This PwC Legal EU RegCORE Client Alert should be read in conjunction with further excellent publications from our PwC Risk & Regulatory colleagues notably from the EBA/SSM Office.