The EBA Launches Consultation on Simplifying the Credit Risk Framework
•February 9, 2026
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Why It Matters
Simplifying credit‑risk rules can lower banks' compliance costs, sharpen supervisory oversight, and advance the EU’s agenda for a more efficient financial regulatory landscape.
Key Takeaways
- •Consultation ends 10 May 2026, invites stakeholder feedback.
- •Focus on simplifying credit‑risk mandates under CRR.
- •Proposes consolidating EBA products and aligning definitions.
- •Aims to balance risk sensitivity with cost efficiency.
- •Supports 2025 efficiency report’s regulatory simplification agenda.
Pulse Analysis
The European Banking Authority’s latest consultation arrives at a time when banks across the EU grapple with an increasingly complex regulatory tapestry. Since the introduction of the EU Banking Package, the credit‑risk segment has accumulated a dense set of mandates, creating duplication and interpretive challenges for institutions and supervisors alike. By revisiting the Single Rulebook’s Level 2 and Level 3 products, the EBA seeks to streamline guidance, reduce administrative overhead, and restore clarity to risk‑weight calculations that underpin capital adequacy.
At the heart of the Discussion Paper are concrete proposals to consolidate existing EBA outputs and harmonise key regulatory definitions. This approach promises a more coherent framework, where banks can navigate requirements without reconciling conflicting guidance. The paper also emphasizes preserving core objectives—risk‑sensitivity, comparability, and cost‑efficiency—recognising that any simplification must not dilute the rigor of capital standards. By aligning definitions across CRR and related directives, the EBA aims to cut down on divergent national implementations, fostering a level playing field across member states.
For market participants, the consultation signals an opportunity to shape future policy and potentially reduce compliance expenditures. A streamlined credit‑risk regime could accelerate loan‑origination processes, improve risk‑adjusted pricing, and enhance the transparency of supervisory assessments. Moreover, the initiative dovetails with the broader EU ambition to modernise its financial architecture, supporting digital transformation and cross‑border banking integration. Stakeholders have until 10 May 2026 to provide input, after which the EBA will integrate feedback into its next wave of regulatory reforms, setting the stage for a more efficient and resilient banking sector.
The EBA launches consultation on simplifying the credit risk framework
The European Banking Authority (EBA) launched today a public consultation on its Discussion Paper on the simplification and assessment of the credit risk framework.
The Paper sets out preliminary ideas to enhance the usability, efficiency and simplicity of the credit risk framework, aiming to stimulate a broader discussion on how to better structure the EBA’s future work in this area. Based on the comments received, the EBA will assess potential simplifications as part of its future policy work. The consultation runs until 10 May 2026.
The EBA’s 2025 Report on the efficiency of the regulatory and supervisory framework introduced a set of principles aimed at enhancing simplicity and efficiency across the regulatory landscape. This Report recommends the EBA launch a review of all the regulatory products it has developed (Level 2 and Level 3) since its establishment in relation to the Single Rulebook, starting with credit risk. As the credit‑risk area has accumulated a particularly large number of mandates under the EU Banking Package, the Discussion Paper examines how a systematic review of these mandates could be organised so that EBA’s future work better supports efficiency and simplicity.
The Discussion Paper sets out concrete proposals to enhance the efficiency and simplicity of the credit‑risk framework within the remit of EBA’s credit‑risk mandates. Because the framework must balance several key objectives—including risk‑sensitivity, comparability, and cost‑efficiency—assessing simplicity is inherently challenging. In addition to exploring potential policy simplifications, the paper also looks at improving the presentation of the framework by consolidating EBA products and aligning key regulatory definitions, thereby making the EBA’s credit‑risk outputs more coherent and easier to navigate. It further highlights a number of challenges linked to specific mandates in the credit‑risk area and sets out measures to be applied in future mandated reports assessing the appropriateness of several elements laid down in the Capital Requirements Regulation (CRR).
Consultation process
Comments to this consultation can be sent to the EBA by clicking on the “Send your comments” button on the consultation page. Please note that the deadline for the submission of comments is 10 May 2026. All contributions received will be published following the close of the consultation, unless requested otherwise.
Legal basis and background
The EBA published in December 2023 its roadmap on the implementation of the EU Banking Package. In the area of credit risk, the new mandates assigned to the EBA relate in many cases to existing EBA products developed and implemented under previous CRD‑CRR requirements. Hence, the implementation of these mandates provides an opportunity to update those products and ensure greater consistency and efficiency across the framework.
The 2025 EBA Report on the efficiency of the regulatory and supervisory framework includes as one of its recommendations to launch a comprehensive review of both the new flow of mandates (i.e., those not yet consulted on) and the existing stock (current products from the Single Rulebook). This Discussion Paper outlines how such a review should be carried out in the credit‑risk domain and proposes initial avenues to streamline and enhance the usability of the framework.
Documents
Discussion paper on simplification and assessment of the credit risk framework (559.41 KB – PDF)
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