The European Banking Authority (EBA) published its first annual Report addressed to the EU Parliament and the Council on the convergence of supervisory review practices in the EU banking sector. The Report covers the findings of an assessment carried out over the past 3 years.
The report focuses on Supervisory Review and Evaluation Process and assessment of risks (SREP), supervisory stress testing, ongoing review of internal models, and supervisory measures and powers.
The EBA is building a Single Rulebook, and common rules are vital for the effective functioning of the single market. Nonetheless, consistency in supervisory risk assessments and outcomes is important for the effective oversight of cross-border banking groups and to ensure a level playing field for banks across the single market.
The recently published EBA Guidelines on Supervisory Review and Evaluation Process (SREP), along with technical standards on for example internal model assessments are designed to reduce divergences in practice. Nonetheless, implementation of these products in a consistent way will be important. To that end the EBA will provide training and use monitoring tools to assess implementation in its next report on supervisory convergence in 2016.
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Supervisory convergence report
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