Recital 1

(1)The purpose of the amendments to Directive 2013/36/EU of the European Parliament and of the Council ³ in connection with supervisory powers, sanctions, third-country branches, and environmental, social and governance (ESG) risks is to further the harmonisation of the banking supervisory framework and, ultimately, deepen the internal market for banking. Competent authorities should seek to ensure that the supervisory framework is applied to institutions, as defined in that Directive, in a proportionate manner and, in particular, they should aim to reduce compliance and reporting costs for small and non-complex institutions to the extent possible, having due regard to the recommendations set out in the report entitled ‘Study of the cost of compliance with supervisory reporting requirements’ published by the European Supervisory Authority (European Banking Authority) (EBA) established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council ⁴ in 2021, which targeted an average reduction of reporting costs of 10 % to 20 %.