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# ECB Publishes 2024-2026 Supervisory Priorities Targeting Credit Risk and Digital Transformation
- URL: https://www.theglobalbanker.com/ecb-2024-supervisory-priorities-credit-risk-digital-transformation/
- Published: 2023-12-20T06:00:00.000Z
- Updated: 2026-10-02T12:46:52.000Z
- Description: The ECB's Single Supervisory Mechanism outlined its 2024-2026 priorities, focusing on credit risk, particularly in real estate and SME portfolios, and on banks' digital resilience across the eurozone.
- Author: TGB Editorial Team
- Tags: Regulations, Europe, #archive

The European Central Bank published its supervisory priorities for 2024-2026 under the Single Supervisory Mechanism, setting out the themes that will guide its oversight of significant institutions across the euro area in the year ahead. The document identifies credit risk — particularly in residential and commercial real estate and SME portfolios — as a primary concern, whilst digital transformation and operational resilience form the third priority.

The ECB directly supervises 110 or so significant institutions.

#### CREDIT RISK IN REAL ESTATE AND SME PORTFOLIOS

Commercial real estate is identified as a sector requiring heightened supervisory vigilance. 

Small and medium-sized enterprises are the other portfolio singled out for targeted reviews, alongside residential real estate. The ECB also said it would follow up on shortcomings in counterparty credit risk management, noting heightened risks from exposures to highly leveraged non-bank financial institutions, and would ask banks to strengthen their asset and liability management, covering liquidity, funding and interest rate risk in the banking book.

The ECB said it will continue to review forbearance, unlikeliness-to-pay and provisioning practices and repeat its targeted review of IFRS 9 provisioning and overlays.

#### DIGITAL RESILIENCE AND OPERATIONAL RISK

Digital transformation remains an explicit supervisory priority for 2024-2026\. Supervisors will examine how banks are managing large-scale information technology transformation programmes, the adequacy of governance structures overseeing those programmes, and the control frameworks in place for managing third-party technology providers and cloud service relationships.

Operational resilience — the capacity of institutions to withstand and recover from disruptions to critical services caused by cyberattacks, technology outages, or third-party failures — is closely linked to the digital theme and will receive its own dedicated supervisory attention. The ECB has noted that banks' deepening reliance on cloud infrastructure and outsourced technology services requires commensurate investment in vendor oversight, contractual protections, and robust business continuity planning.

The second priority calls on banks to accelerate the remediation of shortcomings in governance, risk data aggregation and reporting, and the management of climate-related and environmental risks.