The European Central Bank has announced a number of reforms to its Supervisory Review and Evaluation Process (SREP), aiming to make its supervision more efficient and effective.
Beginning this summer, banks will receive streamlined SREP decisions that prioritize strategic risk drivers and material weaknesses — marking a move away from exhaustive documentation toward more targeted, dialogue-driven oversight. Qualitative recommendations will shift to the annexes. In so doing, the ECB hopes to facilitate a clearer understanding of supervisory expectations on the part of banks. Importantly, while the form is changing, the supervisory substance is not — banks remain accountable for all outstanding measures regardless of their priority.
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