ECB softens governance expectations for banks to ease burden

FRANKFURT, June 26 (Reuters) - The European Central Bank will retire a number of recommendations and guides for banks and soften its expectations about good governance, it said on Friday, partly in response to industry criticism. 

Regulators around the world have withdrawn some of the most intrusive measures put in place after the global financial crisis, led by an aggressive deregulation agenda by U.S. President Donald Trump's administration.

"Our objective is simple: to ensure that our supervisory guidance remains clear, consistent and fit for purpose in an increasingly complex risk environment," ECB board member Frank Elderson said in a blog post.  

As part of this effort, the ECB said it would scrap around 40 supervisory publications that it deems outdated. These range from a de facto dividend ban enforced at the height of the pandemic to expectations on data collection and reporting, according to a press release.

In addition, it would downgrade a draft guide setting out its expectations for lenders' governance and risk culture, which covered the inner workings of a bank from the remuneration and time-commitment of its board members to the protection of whistleblowers.

Instead, the ECB will from now on publish a report on good practices, which will not be binding.  

"This means that a bank may be fully compliant with the applicable legal framework without implementing any of the good practices described in the guides, provided that it has put in place other practices that are more appropriate," the ECB said.

Other ECB guides, including a sensitive one about risky forms of lending, are also under review, with a conclusion expected by the end of this year. 

(Reporting by Francesco Canepa; editing by Balazs Koranyi and Barbara Lewis)