The European Banking Federation published its response to the European Banking Authority public consultation on revised Guidelines on the supervisory review and evaluation process (SREP) and supervisory stress testing, supporting the aim to streamline supervision but arguing the draft does not go far enough and remains overly focused on process and documentation rather than risk materiality. It highlighted that repeating requirements already set out across other guidelines complicates compliance and increases the risk of inconsistencies over time. The federation urged a shift toward institution-specific, risk-based assessments that reflect banks’ business models rather than resource-intensive, uniform benchmarking approaches with implied automatic escalation, and called for a lighter ongoing supervisory burden in areas such as scrutiny of internal models, their up-to-datedness, scope and related portfolios. It also asked for greater transparency on how competent authorities determine Pillar 2 requirements (P2R) relative to Pillar 1 requirements (P1R), including in light of the output floor, recommending mandatory communication to institutions on the outcome of the P1R–P2R interaction assessment and clearer disclosure of P2R components in the SREP.
European Banking Federation 2026-02-11
European Banking Federation consultation response calls for more risk-based simplification in EBA revised SREP and supervisory stress testing guidelines
The European Banking Federation responded to the European Banking Authority's consultation on revised Guidelines for the supervisory review and evaluation process and stress testing, supporting streamlined supervision but criticizing the draft for focusing too much on process over risk materiality. The federation advocated for risk-based assessments tailored to banks' business models, reduced supervisory burdens, and greater transparency in determining Pillar 2 requirements relative to Pillar 1.