National supervisory programme 2024-26

The national supervisory programme (NSP) contains the supervisory priorities jointly defined each year by BaFin and the Bundesbank for the institutions under national supervision in Germany. These priorities are the outcome of a comprehensive assessment of the risks and vulnerabilities and the areas of activity of the supervised institutions. The second step is to formulate supervisory measures to address those risks and vulnerabilities. In parallel to this, the Single Supervisory Mechanism (SSM) sets priorities for the SSM as a whole, and these feed into the formulation of the national priorities. In addition to the priorities for 2024, medium-term supervisory priorities up to 2026 are defined that take into account structural and medium-term challenges facing the banking sector.

Further to that, BaFin and the Bundesbank closely monitor current developments at institutions and developments in financial markets, with additional supervisory measures being taken as needed.

The still challenging macroeconomic environment, coupled with geopolitical tensions, is taking its toll on credit risk. Soaring prices for energy and energy-intensive commodities in particular are likely to impact primarily on loans to enterprises. Supervisors are therefore focusing on the management of credit risk at institutions, paying particular attention to how lending standards are formulated and how credit default rates and collateral values are developing. 

In addition, the higher interest rate level is also having an impact on credit risk and could affect demand for real estate. While the higher interest rates are generally strengthening banks’ profitability, they could also lead to higher funding costs and put banks’ liquidity situation to the test. Supervisors are therefore obtaining an overview of institutions’ liquidity situation and interest rate risk and identifying irregularities at an early stage.

The commercial real estate market is seeing significant declines in prices. The rapid rise in interest rates has reduced demand for commercial real estate considerably and, over the course of 2023, increasingly exerted pressure on the debt sustainability of many real estate enterprises. High construction costs and structural factors, such as the trend towards more working from home, are an additional strain. Given this combination of factors, there was greater pressure on real estate developers and project managers in particular, as well as on market segments and players with a focus on office real estate (including in the United States). 

Furthermore, having powerful, state-of-the-art IT systems and being highly resilient to cyberattacks is crucial for keeping operations running smoothly at institutions. Outsourcing material IT activities and processes remains an ever more important endeavour for institutions, leaving them increasingly reliant on external service providers. From a supervisory perspective, it is important that institutions and their service providers are sufficiently aware of cyber/IT risks and that they identify potential vulnerabilities to cyberattacks. 

In consideration of these risks, the following supervisory priorities and their main measures for 2024 were defined:

1. Economic environment and high inflation 

  • Flagged institutions will be monitored closely, supervisory intensity will be stepped up at institutions in economic distress and, if necessary, institutions will be asked to provide crisis plans.
  • Surveys of institutions and horizontal analyses will be conducted (e.g. on the impact on interest rate positions in the banking book, on loans to households for house purchase and on lending). 
  • Priorities will be set pursuant to Section 30 of the German Banking Act (Kreditwesengesetz) for the inspection of annual financial statements and more asset quality reviews will be carried out.

2. Interest rate developments

  • The LSI stress test and the building and loan association stress test will be carried out as horizontal analyses; further measures will be defined if necessary.
  • Inspections pursuant to Section 44 of the Banking Act focusing on liquidity and interest rate risk will be carried out at selected institutions and their service providers.

3. IT security

  • Supervisory dialogue with institutions exposed to high cyber/IT risk will be stepped up as needed. 
  • In addition, outsourcing and migration projects will be among the issues subject to greater scrutiny, for which priorities pursuant to Section 30 of the Banking Act will be set and on-site inspections will be conducted.

4. Commercial real estate market

  • The key objective of supervisors is to check whether market developments are reflected in institutions’ credit assessments and whether risks are being adequately monitored.
  • In terms of the measures planned, the information provided under point 1. “Economic environment and high inflation” largely applies here, too.


Medium-term supervisory priorities up to 2026

Combined impact of digital transformation and demographic change

Analysis of institutions’ strategies and plans, formulating future activities, e.g. surveys, inspections

Climate change, sustainability and economic transformation

Activities related to the legislative backdrop, analyses of whether institutions are incorporating climate-related and environmental risks into their business strategy and their governance and risk management frameworks, conduct ESG inspections


Intensive engagement with senior management/supervisory bodies, set priorities pursuant Section 30 of the Banking Act and conduct horizontal analyses of selected aspects