The supervisory review and evaluation process (SREP) for 2015 highlighted the persistence of several weaknesses, most importantly the share of non-performing loans. This was partly due to the highly expansionary lending strategy pursued before the crisis, which the bank is now actively addressing. Structural solutions have also been called for, such as mergers with other credit institutions.
The new provisions included in the elements for EU fiscal governance framework are important steps in the right direction. However, the devil lies in the details of the implementation. Most notably, the 2012 European Semester should be used to enforce rigorously the reinforced fiscal and macroeconomic surveillance mechanism. The ECB will play a significant role in the crisis management framework.