Featured Product

    ECB Publishes Results of Supervisory Review and Evaluation Process

    April 08, 2019

    ECB published the aggregate outcome of its 2018 Supervisory Review and Evaluation Process (SREP). The overall 2018 SREP outcome showed that governance and risk management of banks worsened from the previous SREP cycle, while the assessment of management of liquidity and funding risks remained largely unchanged. The assessment concludes that risk management framework of a number of banks should continue to improve.

    The overall SREP demand for common equity tier 1 (CET1) capital increased to 10.6% in 2018 from 10.1% in 2017, which was driven by the last step of the phase-in of the capital conservation buffer. The overall SREP demand excludes systemic buffers and countercyclical capital buffer (CCyB). Most significant institutions already have capital levels above the CET1 levels and buffers required by ECB and national authorities, respectively. CET1 is the highest quality capital of a bank, consists largely of common stock, and measures the capital strength of a bank. In addition to asking banks to hold certain amounts of capital, ECB also imposed liquidity measures as part of the SREP, which may include improving the process of assessing their liquidity needs, their funding plans, and/or intraday liquidity. Furthermore, ECB imposed qualitative measures on more than eighty banks, covering a wide range of weaknesses from internal governance and risk management to non-performing loans and data quality.

    ECB Banking Supervision prepares an individual SREP decision for each bank it supervises. This is in addition to the daily, ongoing supervision where ECB supervisors assess a bank’s business model, governance, and risk as well as its capital and liquidity. The results of the stress test conducted in 2018 also informed the SREP decision. The ECB Banking Supervision has conducted four SREP exercises since 2014. Using common methodology and common decision-making processes has allowed ECB to compare peers and analyze banks on a broader scale.

     

    Related Links

    Keywords: Europe, EU, Banking, SREP, Stress Testing, Basel III, SSM, Regulatory Capital, Banking Supervision, ECB

    Featured Experts
    Related Articles
    News

    APRA Publishes Proposal to Increase Transparency of Banking Data

    APRA proposed to substantially increase the volume and breadth of data it makes publicly available on authorized deposit-taking institutions, including banks, credit unions, and building societies.

    December 05, 2019 WebPage Regulatory News
    News

    ESMA Consults on Guide to Internal Controls for Credit Rating Agencies

    ESMA launched a consultation on the guidelines on internal controls for credit rating agencies (CRAs).

    December 05, 2019 WebPage Regulatory News
    News

    EU Finalizes Directive and Prudential Rules for Investment Firms

    EU published, in the Official Journal of the European Union, the Directive (2019/2034) and Regulation (2019/2033) on the prudential requirements and supervision of investment firms.

    December 05, 2019 WebPage Regulatory News
    News

    OSFI Revises Guideline on Principles for Management of Liquidity Risk

    OSFI finalized Guideline B-6 on the principles for the management of liquidity risk.

    December 05, 2019 WebPage Regulatory News
    News

    PRA Consults on Framework to Manage Outsourcing and Third-Party Risk

    PRA published a consultation paper CP30/19 that sets out proposals to modernize the regulatory framework on outsourcing and third-party risk management.

    December 05, 2019 WebPage Regulatory News
    News

    BoE, PRA, and FCA Consult to Strengthen Operational Resilience

    BoE, PRA, and FCA published a shared policy summary and coordinated consultation papers on new requirements to strengthen operational resilience in the financial services sector.

    December 05, 2019 WebPage Regulatory News
    News

    EC Amends Rule on Mapping of External Credit Assessment Institutions

    EC published the implementing regulation (EU) 2019/2028, which amends Regulation 2016/1799, regarding the mapping tables specifying correspondence between the credit risk assessments of external credit assessment institutions (ECAIs) and the credit quality steps set out in the Capital Requirements Regulation.

    December 04, 2019 WebPage Regulatory News
    News

    EBA Issues Second Part of Advice on Implementation of Basel III in EU

    EBA published the second part of its advice on the implementation of Basel III in EU, which complements the report published on August 05, 2019.

    December 04, 2019 WebPage Regulatory News
    News

    EU Approves European Council Proposal on CCP Recovery and Resolution

    EU ambassadors approved the position of European Council on a proposed framework for clearing houses and their authorities to prepare for and deal with financial difficulties.

    December 04, 2019 WebPage Regulatory News
    News

    OSFI Releases Guideline on Foreign Bank Branch Deposit Requirements

    OSFI released the final version of Guideline A-10 on foreign bank branch deposit requirements, along with guideline impact analysis statement.

    December 04, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4268