The supervisory priorities set out focus areas for supervision in 2019. They build on an assessment of the key challenges facing supervised banks in the current economic, regulatory and supervisory environment.
ECB Banking Supervision has identified sources of banking sector risk in cooperation with the national competent authorities, drawing on input from the Joint Supervisory Teams (JSTs), ECB microprudential and macroprudential analyses, as well as reports by international bodies. The key drivers of banking sector risks identified are: geopolitical uncertainties, the stock of non-performing loans (NPLs) and potential for a build-up of future NPLs, cybercrime and IT disruptions, potential repricing in financial markets, the low interest rate environment, banks’ reaction to new and existing regulations, euro area economic and fiscal conditions, cases of misconduct, developments in real estate markets, structural business challenges, non-bank competition and climate-related risks. 
To ensure that banks address these key challenges effectively, ECB Banking Supervision has reviewed and streamlined its supervisory priorities. In the light of the risk situation outlined above, the Single Supervisory Mechanism (SSM) has set the following high-level priority areas for 2019:
activities comprising multiple risk dimensions.
These priority areas are largely continuing from 2018, with the exception of business models as major supervisory activities in this area have now been finalised.Business models will continue to be supervised as part of the JSTs’ day-to-day supervision, for example in the context of the Supervisory Review and Evaluation Process (SREP).