This Report provides a summary of the EBA's observations on the current state of convergence of supervisory practices and highlights the EBA's activities carried out in 2018 to promote this convergence in accordance with its mandates as set out in its Founding Regulation and in the Capital Requirements Directive (CRD).
The Report covers, in particular, the EBA's assessment of the convergence in the supervisory review and evaluation process (SREP) as well as the supervisory convergence in the continuum between ongoing supervision, recovery and resolution. The latter is a new consideration given the relatively new entry into force of the Bank Recovery and Resolution Directive (BRRD).
Overall, the Report notes that in 2018, competent authorities made good progress in the implementation of the 2014 SREP Guidelines as well as in taking forward the recommendations and observations made by the EBA during the 2016 and 2017 bilateral convergence visits. The Report highlights, however, a number of remaining challenges, in particular, in converging capital adequacy assessments and determining institution-specific additional own funds requirements.
The Report observes that the continuum between ongoing supervision, recovery and resolution is progressively benefitting from the implementation of internal procedures, which take into account the Single Rulebook and contributes to ensuring the convergence of supervisory practices. Further improvements are still needed on key aspects, in particular, to ensure that all the institutions, which do not benefit from a waiver have developed a recovery plan.
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