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  1. Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) (EBA/GL/2014/13)
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This version from: 19 December 2014 - 31 December 2018

Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) (EBA/GL/2014/13)

Status: Final and translated into the EU official languages
Comparing proposed amendment...
Executive summary
Background and rationale
EBA Guidelines on common procedures and methodologies for the supervisory review and evaluation process and supervisory stress testing
Title 1. Subject matter, definitions and level of application (paras. 1-9)
1.1 Subject matter (paras. 1-3)
1.2 Definitions (para. 4)
1.3 Level of application (paras. 5-9)
Title 2. The common SREP (paras. 10-49)
2.1 Overview of the common SREP framework (paras. 10-26)
2.1.1 Categorisation of institutions (paras. 11-13)
2.1.2 Continuous assessment of risks (paras. 14-16)
2.1.3 Periodic assessment of capital and liquidity adequacy (paras. 17-19)
2.1.4 Overall SREP assessment (paras. 20-22)
2.1.5 Dialogue with institutions, application of supervisory measures and communicating findings ( (paras. 23-26)
2.2 Scoring in the SREP (paras. 27-42)
2.2.1 Risk scores (paras. 35-37)
2.2.2 Viability scores (para. 38)
2.2.3 Overall SREP scores (paras. 39-40)
2.3 Organisational arrangements (paras. 41-42)
2.4 Proportionality and supervisory engagement (paras. 43-49)
2.4.1 Category 1 institutions
2.4.2 Category 2 institutions
2.4.3 Category 3 institutions
2.4.4 Category 4 institutions (paras. 45-49)
Title 3. Monitoring of key indicators (paras. 51-60)
Title 4. Business model analysis (paras. 61-87)
4.1 General considerations (paras. 61-66)
4.2 Preliminary assessment (paras. 67-69)
4.3 Identifying the areas of focus for the BMA (para. 70)
4.4 Assessing the business environment (paras. 71-72)
4.5 Analysis of the current business model (paras. 73-77)
4.5.1 Quantitative analysis ((paras. 74-75)
4.5.2 Qualitative analysis (paras. 76-77)
4.6 Analysis of the strategy and financial plans (paras. 78-80)
4.7 Assessing business model viability (paras. 81-82)
4.8 Assessing the sustainability of the institution's strategy (paras. 83-84)
4.9 Identification of key vulnerabilities (paras. 85-86)
4.10 Summary of findings and scoring (para. 87)
Title 5. Assessing internal governance and institution-wide controls (paras. 88-136)
5.1 General considerations (paras. 88-90)
5.2 Overall internal governance framework (para. 91)
5.3 Organisation and functioning of the management body (para. 92)
5.4 Corporate and risk culture (paras. 93-94)
5.5 Remuneration policies and practices (para. 95)
5.6 Internal control framework (paras. 96-97)
5.6.1 Internal audit function (para. 97)
5.6.2 ICAAP and ILAAP frameworks
5.6.3 Stress testing
5.7 Risk management framework (paras. 98-129)
5.7.1 Risk appetite framework and strategy (paras. 99-100)
5.7.2 ICAAP and ILAAP frameworks (paras. 101-109)
5.7.3 Assessment of institutions' stress testing (paras. 110-127)
5.7.4 New products and significant changes (paras. 128-129)
5.8 Information systems and business continuity (paras. 130-131)
5.9 Recovery planning (paras. 132-133)
5.10 Application at the consolidated level and implications for group entities (paras. 134-135)
5.11 Summary of findings and scoring (para. 136)
Title 6. Assessing risks to capital (paras. 137-341)
6.1 General considerations (paras. 137-153)
6.2 Assessment of credit and counterparty risk (paras. 154-218)
6.2.1 General considerations (paras. 154-155)
6.2.2 Assessment of inherent credit risk (paras. 156-200)
6.2.3 Assessment of credit risk management and controls (paras. 201-217)
6.2.4 Summary of findings and scoring (para. 218)
6.3 Assessment of market risk (paras. 219-254)
6.3.1 General considerations (paras. 219-222)
6.3.2 Assessment of inherent market risk (paras. 223-239)
6.3.3 Assessment of market risk management and controls (paras. 240-252)
6.3.4 Summary of findings and scoring (paras. 253-254)
6.4 Assessment of operational risk (paras. 255-309)
6.4.1 General considerations (paras. 255-258)
6.4.2 Assessment of inherent operational risk (paras. 259-289)
6.4.3 Assessment of reputational risk (paras. 290-293)
6.4.4 Assessment of operational risk management, measurement and controls (paras. 294-308)
6.4.5 Summary of findings and scoring (para. 309)
6.5 Assessment of interest rate risk from non-trading activities (paras. 310-341)
6.5.1 General considerations (paras. 310-312)
6.5.2 Assessment of inherent IRRBB (paras. 313-329)
6.5.3 Assessment of IRRBB management and controls (paras. 330-340)
6.5.4 Summary of findings and scoring (para. 341)
Title 7. SREP capital assessment (paras. 342-408)
7.1 General considerations (paras. 342-347)
7.2 Determining additional own funds requirements (paras. 348-369)
7.2.1 Determining additional own funds to cover unexpected losses (paras. 349-366)
7.2.2 Determining own funds or other measures to cover model deficiencies (para. 367)
7.2.3 Determining own funds or other measures to cover other deficiencies (para. 368)
7.2.4 Determining own funds or other measures to cover funding risk (para. 369)
7.3 Reconciliation with macro-prudential requirements (para. 370)
7.4 Determining the TSCR (paras. 371-374)
7.5 Articulation of own funds requirements (paras. 375-379)
7.6 Assessing the risk of excessive leverage (para. 381)
7.7 Meeting requirements over the economic cycle (paras. 382-407)
7.7.1 Using P2G to address the quantitative outcomes of stress testingDetermining and setting P2G (paras. 385-401)
7.7.2 Capital planning and other supervisory measures to address capital adequacy in stressed conditions (paras. 402-407)
7.8 Summary of findings and scoring (para. 408)
7.9 Communication of prudential requirements
Title 8. Assessing risks to liquidity and funding (paras. 409-462)
8.1 General considerations (paras. 409-417)
8.2 Assessing liquidity risk (paras. 418-428)
8.3 Assessing inherent funding risk (paras. 429-435)
8.4 Assessing liquidity and funding risk management (paras. 436-461)
8.5 Summary of findings and scoring (para. 462)
Title 9. SREP liquidity assessment (paras. 463-492)
9.1 General considerations (paras. 463-466)
9.2 Overall assessment of liquidity (paras. 467-471)
9.3 Determining the need for specific liquidity requirements (paras. 472-475)
9.4 Determination of specific quantitative liquidity requirements (paras. 476-484)
9.5 Articulation of specific quantitative liquidity requirements (paras. 485-490)
9.6 Summary of findings and scoring (paras. 491-492)
Title 10. Overall SREP assessment and application of supervisory measures (paras. 493-551)
10.1 General considerations (paras. 493-496)
10.2 Overall SREP assessment (paras. 497-501)
10.3 Application of capital measures (paras. 502-503)
10.4 Application of liquidity measures (paras. 504-505)
10.5 Application of other supervisory measures (paras. 506-540)
10.6 Supervisory reaction to a situation where TSCR is not met (paras. 541-542)
10.7 Supervisory reaction to a situation where P2G is not met (paras. 543-546)
10.8 Interaction between supervisory and early intervention measures (paras. 547-548)
10.9 Interaction between supervisory and macro-prudential measures (paras. 549-551)
Title 11. Application of the SREP to cross-border groups (paras. 552-569)
11.1 Application of the SREP to cross-border groups (paras. 553-560)
11.2 SREP capital assessment and institution-specific prudential requirements (paras. 561-567)
11.3 SREP liquidity assessment and institution-specific prudential requirements (para. 568)
11.4 Application of other supervisory measures (para. 569)
Title 12. Final provisions and implementation (paras. 570-588)
12.1 Use of supervisory stress testing by competent authorities (paras. 570-575)
12.2 Key elements of supervisory stress testing (paras. 576-578)
12.3 Organisational and governance arrangements within competent authorities (paras. 579-584)
12.4 Process and methodological considerations (paras. 585-588)
Title 13. Final provisions and implementation
Annex 1. Operational risk, examples of the link between losses and risk drivers
Annex 2. Key features and differences between P2R and P2G
Annex 3. Overview of 2017 updates to the SREP Guidelines
Annex 4. Selected references and regulatory requirements regarding risks to liquidity and funding
Accompanying documents
Confirmation of compliance with guidelines and recommendations
Accompanying document
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