Revised SREP Guidelines boost EU banking supervision efficiency

The European Banking Authority (EBA) has published its revised Guidelines for the Supervisory Review and Evaluation Process (SREP), aiming to enhance the efficiency and effectiveness of EU banking supervision.

These guidelines introduce targeted rationalisation measures, including a 30 percent reduction in overall page count, while preserving the SREP's core structure.

They align with CRRIII/CRDVI and integrate all SREP-related guidance, such as ICT risk and third-country branches, into a streamlined framework.

Key enhancements include a broader, more forward-looking identification of risks, with increased focus on emerging drivers like ICT, ESG, and credit spread risk from non-trading activities (CSRBB).

This supports a more risk-based and proportionate supervision, calibrating assessments to institutions' risk profiles and making greater use of existing information, enabling efficient use of supervisory resources.

The framework also clarifies risk taxonomy and the interaction between Pillar 1 and Pillar 2 requirements, including the application of the output floor.

Since their adoption in 2014, the SREP Guidelines have provided a common language for assessing credit institutions, forming the foundation for the Single Supervisory Mechanism (SSM) and enabling the Banking Union.

This revision marks the third major update since 2014, strengthening the overall coherence of supervisory architecture.

It consolidates existing SREP Guidelines and standalone ICT risk assessment guidelines, while incorporating new mandates from CRD VI, including the treatment of third-country branches and the operationalisation of the output floor.

This publication is the third major milestone under the EBA's 'Simplifying to strengthen' campaign, part of its broader priority to enhance the efficiency of the regulatory framework.

The Guidelines will apply from 1 January 2027, with competent authorities encouraged to consider the revised guidance earlier.