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25 January 2006

CEBS guidelines on supervisory review process

CEBS published guidelines on the Application of the Supervisory Review Process under Pillar 2, which provides for the supervisory review of institutions’ internal assessments of their overall risks and capital adequacy based on those risks. The supervisory review process is a central part of the new Capital Requirements Directive. The cornerstone of the supervisory review process will be a structured dialogue between institutions and supervisors. CEBS' guidelines represent a common understanding between EU supervisors on how this dialogue will be conducted, and clarify their expectations for the process.

Among others, CEBS has revised the internal governance section of the guidelines, including the definition of management body. It also clarified the scope of application of the guidelines and the framework for coordination between consolidating supervisors and host supervisors on the supervisory review process.

The guidelines will be followed by banking supervisors across the EU. They will in due course be incorporated into a compendium of guidance – or handbook – for institutions and supervisory authorities on how to approach their obligations under the Banking Directive.

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© CEBS - Committee of European Banking Supervisors

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