EBA notes EU wide consistent implementation of 2022 priorities in supervisory work programmes and further improvements in the functioning of supervisory colleges but calls for more attention in some areas

The report on the convergence of supervisory practices in 2022 by EBA outlines the progress made by EU member state regulators in harmonizing their supervisory practices.
The report highlights the tools deployed by EBA to ensure supervisory convergence, including the ESEP, peer reviews, benchmarking exercises, policy development, and training activities. The report also covers the implementation and results of the 2022 ESEP, as well as convergence in supervisory colleges.
The EBA report indicates that regulators effectively incorporated the key topics introduced in the 2022 ESEP into their supervisory priorities, supervisory assessments, and colleges‘ work. Nevertheless, regulators are still building up their capacity to review risks associated with digital transformation and ESG. Supervisory attention on these topics was not always homogeneous compared to attention given to the review of asset quality/provisioning, ICT, and ML/TF risks. Supervisors applied proportionality in their supervisory practices, either in the identification of the set of institutions to review or in the level of assessment performed.
The report also notes that ICT risks are still considered high, with ICT security and outsourcing risks being followed closely by CAs and supervisory colleges. Weaknesses identified in risk data aggregation need close supervisory attention. The report states that regulators made good use of the available tools offered in relevant EBA Guidelines monitoring the lasting implications of the COVID-19 pandemic. Moreover, a step forward was made in the supervision of sound lending standards and practices, while supervisory attention in relation to asset quality and non-performing exposures shifted to monitoring the consequences of the Russian invasion of Ukraine and the changed macroeconomic environment.
The report also outlines the EBA’s policy work supporting supervisory convergence and the training provided by the EBA to EU competent authorities in 2022. The EBA introduced qualitative key performance indicators in supervisory colleges to help monitor their interactions and organizational aspects.