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Supervisory review (SREP)

Supervisors assess the risks banks face and check that banks are equipped to manage those risks properly. This activity is called the Supervisory Review and Evaluation Process, or SREP, and its purpose is to allow banks’ risk profiles to be assessed consistently and decisions about necessary supervisory measures to be taken.

What is the SREP?

SREP results

SREP 2023 aggregate results

Once a year we publish a summary of SREP results for all the banks we supervise directly.

2023 aggregate results
Pillar 2 requirement (P2R)

We specify how much capital each supervised bank needs to hold to cover the risks it faces.

Pillar 2 requirements
Pillar 2 Guidance (P2G)

We expect banks to keep enough capital to withstand stress.

Pillar 2 Guidance

How do we carry out the SREP?

Supervisors use a single methodology and a set of harmonised tools to assess banks consistently. They focus on banks’ business models, internal governance, risks to capital and risks to liquidity.

Supervisory methodology

Business model

Supervisors analyse a bank’s business model to better understand its main activities and business areas, the environment in which it operates and its key vulnerabilities.

Business model

Internal governance

Supervisors look closely at how a bank is run, examining its key people, functions, management bodies and committees.

Internal governance and risk management

Risks to capital

Supervisors assess four categories of risk: credit risk, market risk, interest rate risk in the banking book and operational risk.

Risks to capital

Risks to liquidity

Supervisors assess a bank’s ability to cover ad hoc cash needs, such as in times of economic uncertainty when depositors may withdraw much more money than usual.

Risks to liquidity

The SREP of tomorrow

We work to keep Europe’s biggest banks safe. But the environment in which we do so is becoming more complex, and new risks are emerging. In the face of these challenges, we’ve taken action to keep the SREP process effective and sufficiently flexible.

Learn how we’re changing the SREP

What informs the SREP?

Stress tests

Supervisors use stress tests to identify and address banks’ vulnerabilities early on in the SREP process.

Find out more about stress tests
Supervisory priorities

Every year ECB Banking Supervision sets its supervisory priorities that will guide the SREP in the year ahead.

Find out more about our supervisory priorities
Risk assessment

Every year ECB Banking Supervision identifies and assesses the risks banks face to determine focus areas for the SREP.

More about the assessment of risks and vulnerabilities

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