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ECB eases bank checks from buybacks to stress tests, Donnery says
Published by Global Banking and Finance Review
Posted on September 8, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 8, 2025
2 min readLast updated: January 22, 2026
The ECB is easing oversight on euro zone banks, focusing on buybacks and stress tests, while balancing simplification with resilience.
FRANKFURT (Reuters) -The European Central Bank is easing some of the checks it makes on euro zone banks, from how lenders get approval for share buybacks to how stress tests are carried out, ECB supervisor Sharon Donnery said on Monday.
The ECB is coming under pressure from lenders it oversees to ease the supervisory burden as the Trump administration promises easier rules in the United States and shadow banks gain ground in the credit business.
Writing in a blog post, Donnery listed measures the ECB has taken, including speeding up the approval of new appointments, buybacks and internal models, and reducing the amount of work demanded from banks during stress tests.
But she repeated her position that simplification should not go too far if the sector is to remain robust.
"The ECB is turning words into action and making banking supervision as simple as possible, but not simpler, to make sure banks are able to stay resilient and are well prepared to manage risks in their portfolios," she wrote.
An ECB task-force, chaired by Vice President Luis de Guindos and also including Donnery, has recently presented a number of possible simplification measures to the Governing Council that are now being discussed by the euro zone's 20 national central banks.
Germany's bank regulators have proposed creating a separate regime for "small and non-complex banks", which would subject them to a single capital requirement rather than the full array foreseen under EU rules.
Under this optional regime, banks with less than 10 billion euros ($11.73 billion) in assets, with a strong domestic focus and a small trading book would be required to have a leverage ratio - capital expressed as a percentage of total assets - "significantly higher than 3%", the non-paper prepared by Germany's Bundesbank and Bafin shows.
Donnery said earlier this year that the regulatory framework was already less strict for "small and non-complex" banks, although she saw scope for "more proportionality".
The EU delayed new, global rules governing banks' trading earlier this year as it awaited more clarity regarding the U.S. administration's plans to deregulate its financial sector.
($1 = 0.8527 euros)
(Reporting By Francesco Canepa; Editing by Joe Bavier)
The European Central Bank (ECB) is the central bank for the eurozone, responsible for monetary policy, maintaining price stability, and overseeing the banking system of the euro area.
Stress tests are simulations used by banks to determine their ability to withstand economic shocks by assessing their financial stability under adverse conditions.
Share buybacks occur when a company repurchases its own shares from the marketplace, often to reduce the number of outstanding shares and increase shareholder value.
Banking supervision involves monitoring and regulating banks to ensure their safety, soundness, and compliance with laws and regulations to protect the financial system.
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