ECB

Low Impact

ECB publishes independent assessment of its Supervisory Review and Evaluation Process

Published

Sep 28, 2026

Topics

ECB Banking Supervision, Supervisory Review and Evaluation Process, Significant institutions, Pillar 2, Supervisory remediation, Governance and risk management, ICAAP and ILAAP

Executive Summary

On 17 April 2023, ECB Banking Supervision published an independent expert assessment of its Supervisory Review and Evaluation Process. The report is not a binding rule and does not create a new filing deadline or regulatory template. Its business relevance is that it assesses the core supervisory process used by the ECB to review significant institutions and supports a shift toward a more focused, risk-based and efficient SREP. The assessment recognises that ECB Banking Supervision has built a harmonised methodology to promote consistent supervision, while recommending changes to prioritisation, supervisory strategy, internal processes and follow-up of weaknesses. Banks should treat the publication as an early supervisory signal rather than an immediate compliance obligation. The practical impact is on SREP preparation, remediation governance, management body reporting, ICAAP and ILAAP evidence, and the way firms demonstrate that material supervisory findings are tracked to closure. No effective date is stated in the source.

What Changed

modifiedSREP direction of travel: more risk-based prioritisation

The SREP operated as a harmonised, structured annual supervisory assessment designed to ensure consistency across significant institutions.

New

The expert assessment recommends greater prioritisation and risk focus within that harmonised framework; this is a supervisory signal, not a new legal obligation.

modifiedSupervisory strategy and planning

Banks typically prepared for a broad annual SREP cycle and responded to findings through established supervisory dialogue and remediation processes.

New

Banks should expect supervisory engagement to be more targeted around material risks and the ECB’s supervisory priorities where these apply to the institution.

modifiedRemediation and escalation discipline

Remediation was generally tracked through supervisory letters, SREP decisions, management action plans and ongoing dialogue with joint supervisory teams.

New

The supervisory signal is for more disciplined tracking of weaknesses, clearer ownership and stronger evidence that actions are completed and effective.

modifiedProcess efficiency and supervisory burden

The SREP was resource-intensive for both supervisors and banks, with significant recurring information requests and evidence production.

New

Firms should be prepared for more selective information requests, but also for deeper challenge where the ECB identifies material vulnerabilities.

modifiedTransparency of methodology

Banks relied on annual SREP decisions, supervisory dialogue and published methodology to understand supervisory expectations.

New

Banks should monitor ECB SREP methodology publications and supervisory priorities as practical indicators of how the assessment’s recommendations are being operationalised.

Business Impact

Who is affected

Directly affected

significant institutions under direct ECB supervision.

Indirectly affected

banking groups' subsidiaries, risk, finance, treasury, compliance, internal audit, external advisers and assurance teams supporting ECB-supervised entities, and less significant institutions where national competent authorities align supervisory practices with ECB methodology.

Jurisdictions

European Banking Union, Euro area participating Member States, Other EU Member States participating in the Single Supervisory Mechanism

Business processes

SREP preparation and supervisory dialogue, Pillar 2 capital and liquidity planning, ICAAP and ILAAP governance, Supervisory findings and remediation tracking, Management body and committee reporting, Risk appetite and material risk assessment, Internal audit and assurance over supervisory commitments

Estimated effort

Medium

Compliance risk

Medium

Affected Reports

SREP decision and supervisory findings remediation trackerManagement body SREP and supervisory priorities dashboardICAAP and ILAAP supervisory evidence packMaterial risk inventory and risk appetite crosswalkInternal audit or second-line assurance plan for supervisory commitments

Field	Validation rule

Recommended Actions

7 suggested next steps· derived from source analysis

1
AI generatedStep 1 of 7
Treat the assessment as a supervisory signal, not a binding rule; brief senior management and relevant committees on likely SREP engagement implications.
2
AI generatedStep 2 of 7
Map current SREP findings, ECB supervisory priorities and internal material risk assessments to identify areas where supervisory scrutiny is likely to deepen.
3
AI generatedStep 3 of 7
Review remediation trackers to confirm clear owners, due dates, evidence standards and effectiveness testing for open ECB or NCA findings.
4
AI generatedStep 4 of 7
Strengthen ICAAP and ILAAP evidence so that capital, liquidity and risk appetite materials clearly support the bank’s assessment of material vulnerabilities.
5
AI generatedStep 5 of 7
Rationalise SREP evidence repositories to make responses to targeted supervisory requests faster, more consistent and easier to validate.
6
AI generatedStep 6 of 7
Update board and committee MI to distinguish regulatory facts, supervisory expectations, internal management actions and closure status.
7
AI generatedStep 7 of 7
Monitor subsequent ECB SREP methodology publications and supervisory priorities to identify confirmed implementation steps flowing from the assessment.

Timeline

publication

Apr 17, 2023

ECB Banking Supervision published the independent assessment of the European Central Bank’s Supervisory Review and Evaluation Process.

publication

Dec 19, 2023

ECB Banking Supervision published its 2023 SREP supervisory methodology for significant institutions.

publication

Dec 17, 2024

ECB Banking Supervision published its 2024 SREP supervisory methodology, describing the methodology applied to significant institutions and noting continuing refinement of the approach.

Sources

AI-generated analysis is based on the following primary sources. Always verify against the official publication.

Independent assessment reportEuropean Central Bank Banking SupervisionApr 17, 2023
Assessment of the European Central Bank’s Supervisory Review and Evaluation Process ↗
https://www.bankingsupervision.europa.eu/ecb/pub/pdf/annex/ssm.pr230417_annex.en.pdf
Supervisory methodologyEuropean Central Bank Banking SupervisionDec 19, 2023
Supervisory methodology 2023 ↗
https://www.bankingsupervision.europa.eu/activities/srep/2023/html/ssm.srep202312_supervisorymethodology2023.en.html
Supervisory methodologyEuropean Central Bank Banking SupervisionDec 17, 2024
Supervisory methodology 2024 ↗
https://www.bankingsupervision.europa.eu/activities/srep/2024/html/ssm.srep202412_supervisorymethodology2024.en.html

Related Evidence

Verified source support for this analysis

The evidence agent checks whether the drafted finding is supported by official publications and relevant public source material.

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