The European Central Bank (ECB) harmonises supervision rules for institutions supervised by national competent authorities

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On 4 April 2017, Guideline (EU) 2017/697 of the European Central Bank (link) and Recommendation ECB/2017/10 (link) for national competent authorities (including the Bank of Lithuania) on exercising some options and discretions available in EU legislation in relation to less significant institutions directly supervised by national competent authorities have been adopted. In the Guideline and the Recommendation, the ECB pronounces on the application of Regulation (EU) 575/2013 establishing prudential requirements for credit institutions and of other related legislation.

According to Donatas Šliora, Associate at TGS Baltic, Banking & Finance, the ECB in the new Guideline and the Recommendation endeavours to achieve a harmonisation of supervisory standards of national competent authorities and to ensure the effective and consistent functioning of the Single Supervision Mechanism. It is expected that the consistent application of supervisory standards will ensure equal conditions for the activity of credit institutions and limit concentration risks in the EU Member States. Both the Guideline and the Recommendation are relevant to credit institutions which are not under direct supervision of ECB.