Speech by Andrea Enria, Chair of the Supervisory Board of the ECB, at the press conference on the results of the 2021 SREP cycle

11 February 2022

For the 2020 SREP cycle, we adopted a pragmatic approach given the outbreak of the coronavirus (COVID-19) pandemic. We focused on how banks were handling the challenges arising from the crisis and kept most Pillar 2 requirements (P2R) and Pillar 2 guidance (P2G) stable.

Welcome to our press conference on the Supervisory Review and Evaluation Process – SREP for short.

In 2021 we returned to a full SREP assessment. I will outline the results by concentrating on four main topics. First, the resilience that banks have shown. Second, the risks that could still materialise from the COVID-19 fallout. Third, the structural challenges which predate the pandemic but continue to weigh on banks. And fourth, risks that are still emerging but already require immediate action.

A resilient banking sector navigating through an uncertain macroeconomic environment

When I spoke at last year’s press conference, economic forecasts projected that output would return to pre-pandemic levels in mid-2022, following the record drop in activity during the first phase of the pandemic. Thankfully, the recovery was even faster than expected. Output has already rebounded to pre-pandemic levels, and economic growth is projected to remain strong over the next three years. But there is still uncertainty about how the pandemic will evolve, mostly owing to the potential spread of new virus variants, and supply chain disruptions are weighing on trade and overall economic activity...

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