The **European Central Bank** (ECB) has proposed changes to how it regulates small banks in Europe, aiming to ease some of the rules while still keeping the protections put in place after the 2008 financial crisis. These proposals come after recent issues with some American regional banks, such as Silicon Valley Bank and Signature Bank, and the government takeover of First Republic, which raised concerns about whether rules for mid-sized banks might be too loose. Frank Elderson, a top official at the ECB, supports adjusting the rules so that smaller banks — called "small and less complex institutions" (SNCI) — face fewer requirements. These banks are mostly overseen by national regulators, not the ECB directly, unlike the roughly 110 larger banks such as Deutsche Bank and BNP Paribas, which the ECB supervises directly from Frankfurt. The ECB is considering letting national regulators raise the limit for what counts as a "small" bank, from 5 to 10 billion euros in assets, depending on the size of their local banking markets. This could increase the number of SNCI banks to 85% from the current 75%, adding about 150 more banks to the category. The ECB also wants to reduce the administrative workload for nearly 1,000 small banks, which currently have to run their own financial stress tests. Additionally, the number of financial data points these banks must send to regulators would drop from about 13,500 to just 700, according to Elderson. These changes aim to make the rules more suitable for the size of each bank, but the ECB stresses that this does not mean lowering safety standards for smaller banks. The ECB plans to start applying these simplifications in areas where it has authority, but any changes that require broader regulatory adjustments will need to be discussed with other European institutions. This effort reflects a balance between easing the burden on smaller banks and maintaining the overall stability of the European banking system.