313. Through the assessment of the inherent level of IRRBB, competent authorities should determine the main drivers of the institution's IRRBB exposure and evaluate the potential prudential impact of this risk on the institution. The assessment of inherent IRRBB should be structured around the following main steps:
a. preliminary assessment;
b. assessment of the nature and composition of the institution's interest rate risk profile; and
c. assessment of the outcome of the supervisory outlier tests and supervisory stress tests, as well as the institution’s interest rate shock scenarios and interest rate stress scenarios.
Preliminary assessment
314. To determine the scope of the IRRBB assessment, competent authorities should first identify the sources of IRRBB to which the institution is or might be exposed. To do so, competent authorities should leverage the knowledge gained from ICAAP and ILAAP information collected for SREP purposes, from reporting established on IRRBB, from the ass
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