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The Guide is aimed at assisting institutions in strengthening their ILAAPs and at encouraging the use of best practices by explaining in greater detail the ECB’s expectations on the ILAAP, leading to more consistent and effective supervision.
The Guide deduces from the CRD IV liquidity risk provisions seven principles that will be considered, inter alia, in the assessment of each institution’s ILAAP as part of the SREP. These principles will also be referred to in discussions with individual institutions in the supervisory dialogue.
The Guide does not substitute or supersede any applicable law implementing Article 86 CRD IV. Insofar as the Guide is not in line with applicable law, the applicable law prevails. The Guide is intended to be a practical tool that is updated regularly to reflect new developments and experience. Consequently, the principles and expectations laid out in this Guide will evolve over time. It will be reviewed in the light of the ongoing development of European banking supervision practice and methodologies, international and European regulatory developments and, for example, new authoritative interpretations of relevant directives and regulations by the Court of Justice of the European Union.
This Guide follows a principles-based approach with a focus on selected key aspects from a supervisory perspective. It is not meant to provide complete guidance on all aspects relevant for sound ILAAPs. The implementation of an ILAAP that is adequate for an institution’s particular circumstances remains the responsibility of the institution. The ECB assesses institutions’ ILAAPs on a case-by-case basis.
In addition to this Guide, and in addition to relevant Union law and national law, institutions are encouraged to take into account other ILAAP-relevant publications from the EBA5 and international fora like the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB). Furthermore, institutions should take into account all ILAAP-related recommendations addressed to them, e.g. recommendations resulting from the SREP, such as those related to sound governance, to risk management and to controls.