Although the Guidance at present is non-binding in nature, any deviations from it will need to be explained. Supervisory expectations can be turned into binding requirements by implementing them as part of the Supervisory Review and Evaluation Process. We expect the Guidance to become embedded in the ECB supervisory manual, thereby becoming business as usual supervision.
Financial reforms should thus follow a carefully-timed and well-balanced approach, taking explicit account of regional and functional heterogeneity.