ECB Speeds Up Securitization Approvals, Cuts Stress Test Data Requests

The European Central Bank (ECB) has implemented reforms that have significantly reduced processing times for certain standardized and lower-risk securitizations. According to Frank Elderson, a member of the ECB's Executive Board and Vice-Chair of the Supervisory Board, this change has resulted in processing times falling from approximately three months to around seven days.

The ECB has also streamlined stress tests by simplifying forms and reducing the number of data points requested by approximately 55%. This change is part of a broader program aimed at reducing the time and resources consumed by standardized procedures. The ECB has reviewed supervisory processes from end to end to eliminate overlaps, reduce requests for information that are not considered necessary, and make greater use of automation.

Elderson rejected the idea that reducing capital requirements would automatically lead to more lending or greater competitiveness, arguing that maintaining prudential standards is essential. The ECB's approach to supervision has shifted from a 'one-size-fits-all' model to a more selective and focused one, prioritizing material risks and vulnerabilities.