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SSM SREP methodology booklet – ICAAP and ILAAP expectations

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The ECB published a SSM SREP methodology booklet describing the supervisory review and evaluation process. General purpose is to set a level playing field, high standards of supervision and sound risk assessment. Before, the ECB has concretised supervisory expectations on ICAAP and ILAAP, building on the experience that in 2015 internal processes have often not been in line with expectations.

SSM SREP methodology booklet
Expectations on ICAAP and ILAAP

19 February 2016
European Central Bank

>  SSM SREP methodology booklet
>  Supervisory expectations on ICAAP and ILAAP

SSM SREP methodology booklet

Clear and descriptive presentation on legal basis, overview, methodology, outcome and current state of the supervisory review and evaluation process.

Supervisory expectations on ICAAP and ILAAP and harmonised information collection on ICAAP and ILAAP

ECB – Banking Supervision, 8 January 2016

Internal capital and liquidity adequacy assessment processes (ICAAPs and ILAAPs) are key risk management instruments for credit institutions. When reliable, these processes can provide a substantial input into the determination of the capital and liquidity requirements in the Supervisory Review and Evaluation Process (SREP). Accordingly, supervisory teams need to be in a position to assess the reliability of these ICAAPs and ILAAPs when performing the SREP. This was for instance stated in the Guide to Banking Supervision.

The experience of 2015 revealed that the information submitted by significant institutions on their ICAAPs and ILAAPs was often not in line with Single Supervisory Mechanism (SSM) expectations. This partly reflected a wide range of practices within SSM countries so far.

In order to encourage institutions to develop and maintain high-quality ICAAPs and ILAAPs, and to clarify the type of information they should share with the SSM on these, please find attached communications regarding:

  • SSM expectations on ICAAP (Annex A)
  • SSM expectations on ILAAP (Annex B)
  • Harmonised collection of information on ICAAP and ILAAP (Annex C)

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