The ECB has published updates to its policies on the exercise of options and discretions available under EU law
On 25 July 2025, the European Central Bank (ECB) published updates to its policies on options and discretions (O&Ds) available to competent authorities under EU law. The updates take into account the changes included in the latest EU banking package (CRR3 and CRD6) as well as other supervisory developments that have occurred since the policies were last amended in 2022.
Most of the updates relate to the ECB Guide applicable to significant credit institutions on options and discretions available under Union law and the ECB Recommendation applicable to less significant credit institutions. The updates made to the Regulation related to significant credit institutions and to the Guide related to less significant credit institutions are minor.
For more information on the ECB’s O&D policies in the Financial Supervisory Authority’s website: Regulations and Guidelines related to the EU's Capital Requirements Regulation, drop-down menu “Guidelines of the European Central Bank on the exercise of options and discretions allowed by the Union”.
During the coming autumn, the Financial Supervisory Authority will revise Regulations and guidelines 5/2019 related to the EU Capital Requirements Regulation with regard to the updates made to the ECB’s O&D policies and the EU banking package.
Updated ECB policies:
- REGULATION OF THE EUROPEAN CENTRAL BANK (EU) 2025/1520 of 15 July 2025 amending Regulation (EU) 2016/445 on the exercise of options and discretions available in Union law (ECB/2016/4) (ECB/2025/24)
- The Regulation provides for the exercise of options and discretions related to significant credit institutions. The Regulation is binding on significant credit institutions.
- The Regulation provides for the exercise of options and discretions related to significant credit institutions. The Regulation is binding on significant credit institutions.
- ECB Guide on options and discretions available in Union law (Finnish) (Swedish) (English)
- The Guide contains guidance for supervisors of significant credit institutions regarding provisions involving discretion where case-by-case permission from the competent authority is required.
- The Guide contains guidance for supervisors of significant credit institutions regarding provisions involving discretion where case-by-case permission from the competent authority is required.
- GUIDELINE OF THE EUROPEAN CENTRAL BANK of 15 July 2025 amending Guideline (EU) 2017/697 on the exercise of options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2017/9) (ECB/2025/25)
- The Guideline is legally binding on national competent authorities with regard to how they should apply, in relation to less significant institutions, the possibility to exercise options of general application which should be fully aligned in terms of principles concerning all banks supervised within the scope of the Single Supervisory Mechanism.
- The Guideline is legally binding on national competent authorities with regard to how they should apply, in relation to less significant institutions, the possibility to exercise options of general application which should be fully aligned in terms of principles concerning all banks supervised within the scope of the Single Supervisory Mechanism.
- RECOMMENDATION OF THE EUROPEAN CENTRAL BANK of 15 July 2025 amending Recommendation ECB/2017/10 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2025/26)
- The Recommendation contains recommendations and guidance issued by the ECB to national competent authorities. They aim to harmonise the exercise of options and discretions in cases that are not generally applicable and therefore require discretion to be exercised on a case-by-case basis.
- The Recommendation contains recommendations and guidance issued by the ECB to national competent authorities. They aim to harmonise the exercise of options and discretions in cases that are not generally applicable and therefore require discretion to be exercised on a case-by-case basis.
- Explanatory memorandum published during the consultation phase: Review of options and discretions - explanatory memorandum
For more information, please contact
Taina Erovaara-Williams, Senior Regulatory Expert, tel.+358 9 183 5422 or taina.erovaara-williams(at)fiva.fi