European Central Bank reforms on-site inspections for greater efficiency

Patrick Montagner: Patrick Montagner is a member of the ECB Supervisory Board responsible for banking supervision matters. He has outlined the ECB's reforms to on-site inspections, emphasizing efficiency, dialogue with banks, and clearer reporting processes. European Central Bank: The European Central Bank serves as the central bank for the euro area and oversees banking supervision across the Single Supervisory Mechanism. It conducts on-site inspections to directly assess how banks manage risks, apply internal policies, and design models. The ECB is reforming these inspections to make them more focused, timely, risk-based, and integrated with Joint Supervisory Teams while maintaining pan-European consistency. Team Integration: On-site inspections are being more closely coordinated with Joint Supervisory Teams to reduce duplication and ensure findings support ongoing supervision effectively. Supervision Reform: The ECB is updating its on-site inspection processes under the next level supervision initiative to optimize resource use and focus on material risks. Process Improvements: New targeted missions and internal tools, including AI-based aids for consistency, are being introduced to streamline investigations and follow-up.