On 12 December 2022, the European Central Bank (ECB) published the Single Supervisory Mechanism (SSM) supervisory priorities for 2023-2025.

ECB Banking Supervision, in close collaboration with Member State national competent authorities, has reviewed its strategic priorities for the next three years. The review builds on an assessment of the main risks and vulnerabilities for ECB supervised banks, considers the progress made on the priorities endorsed last year and draws on the outcome of the 2022 Supervisory Review and Evaluation Process (SREP).

The SSM supervisory priorities for 2023-2025 aim to strengthen supervisory efforts in delivering the medium-term strategic objectives while adjusting the focus to shifting challenges. Supervised institutions will be requested to strengthen their resilience to immediate macro-financial and geopolitical shocks. The priorities for the next three years are:

• Priority 1: Strengthening resilience to immediate macro-financial and geopolitical shocks. Work in this priority area will include targeted reviews of loan origination and monitoring and targeted onsite inspections on energy and/or commodity traders.
• Priority 2: Addressing digitalisation challenges and strengthening management bodies’ steering capabilities. Work will include targeted reviews of outsourcing arrangements, cybersecurity measures and IT risk controls. There will also be an update and external publication of the supervisory expectations regarding banks’ governance arrangements and risk management.
• Priority 3: Stepping up efforts in addressing climate changes. Work will include a review of banks’ compliance with new implementing technical standards on reporting and Pillar 3 disclosure requirements related to climate risk, and benchmarking of banks’ practices against supervisory expectations.