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The Committee of European Banking Supervisors (CEBS) issued a consultation paper on the implementation of Pillar 2 of the revised Basel Accord (“Basel II”) and the relevant provisions of the Capital Requirements Directive. It sets out a general overview of the approach towards the application of the Supervisory Review Process.
The consultation paper is structured in five sections and sets out principles on the overall Supervisory Review Process (SRP) and its two elements, the Internal Capital Adequacy Assessment Process (ICAAP) and the (SREP).
The paper describes what the supervisory authority will expect from institutions in their Capital Adequacy Assessment Process (ICAAP), and also contains principles regarding the supervisory authority's obligations under the Supervisory Review and Evaluation Process (SREP) and how these might be performed.
Comments are invited by 31 August 2004.