On July 19th, 2018 the European Banking Authority (EBA) has published its final revised Guidelines which aim to further enhance institutions’ supervisory review and examination process (SREP).

The Guidelines focus on stress testing which will be used in setting Pillar 2 capital guidance (P2G), as well as interest rate risk in the banking book (IRRRBB).

The publication also includes:

  • A final report on the Guidelines on the revised common procedures and methodologies for the supervisory review and evaluation process (SREP) and supervisory stress testing.
  • Revised final Guidelines on the management of interest rate risk arising from non-trading activities (IRRBB guidelines). The revised Guidelines reflect on developments in the Basel Committee on Banking Supervision (BCBS) and clarify internal and supervisory outlier tests requirements during the first phase of implementing the Basel standards.
  • Final Guidelines on institution’s stress testing. The publication shows that the guidelines reflect industry practices and the incorporation of recovery planning. They provide detailed guidance on the way institutions should design and conduct a stress testing programme.

The official press release about the revised Guidelines can be found here.