EBA notes progress in convergence of supervisory practices across the EU

14 July 2016

The Report, which is addressed to the EU Parliament and the Council, reviews consistency in the application of the Supervisory Review and Evaluation Process (SREP) and supervisory practices in the assessment of recovery plans.

The Report highlights that supervisory authorities across the EU have made additional progress on convergence of supervisory practices, also thanks to the implementation of the European Banking Authority (EBA) SREP Guidelines for the 2016 SREP cycle. In particular, the EBA notes the consistent structure of various SREPs and clear articulation of additional capital requirements, mirroring the composition of minimum own funds requirements.

However, the report also identifies important differences, in particular in determining the amount of additional capital requirements and in the legal nature of such requirements. These, in combination with the application of automatic restrictions on distributions, risk different treatment of banks and investors in the Single Market.

Common rules are vital for the effective functioning of the Single Market and consistency in supervisory risk assessments and outcomes play an important role in supporting the Single Rulebook, whilst maintaining the space for proportionality and supervisory judgement that is required for effective supervision.

Press release

EBA_report on the convergence of supervisory practices

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