EBF responds to EBA consultation on SREP and supervisory stress testing guidelines.

The European Banking Federation (EBF) welcomes the supervisory intent to streamline and support risk-based supervision. While draft revisions are a positive step, members believe more focus is needed on risk, not processes. This aligns with international trends, ensuring banks deploy resources effectively for stability and resilience. Despite the EU's focus on simplification, the Guidelines lack sufficient progress. Repetition of requirements from other guidelines within the draft SREP Guidelines complicates compliance. It also risks creating disconnects between the underlying regulations and the elements reiterated in the SREP guidelines. The EBF advocates for institution-specific, risk-based assessments, considering each institution's business model. This approach is preferred over resource-intensive, uniform benchmarking with automatic escalation. Guidelines should also reduce the operative burden of continuous supervision, particularly regarding intense scrutiny on internal models, their up-to-datedness, scope, and related portfolios. Greater transparency is needed regarding the interaction between Pillar 1 Requirements (P1R) and P2R. Competent authorities must clarify how they determine P2R, especially considering the output floor. To ensure institutions understand SREP assessments, P2R components must be transparent. A mandatory communication requirement for P1R and P2R interaction outcomes would foster understanding of P2R adjustments. For more information please contact: Lukas Bornemann Policy Adviser – Prudential Policy and Supervision, l.bornemann@ebf.eu Denisa Avermaete Senior Policy Adviser – Sustainable Finance, d.avermaete@ebf.eu About the EBF: The European Banking Federation represents the European banking sector, comprising 32 national associations. It covers a significant majority of banking assets, with 3,500 banks employing two million people. EBF members provide over €20 trillion in loans to the European economy and handle 400 million daily payment transactions. Established in 1960, the EBF supports a single financial services market and policies fostering economic growth. Read the full response here For more information please contact: Kalina Pateva , Policy Adviser – Prudential Policy and Supervision, k.pateva@ebf.eu Gonzalo Gasos, Senior Director – Prudential Policy and Supervision, g.gasos@ebf.eu About the EBF: The European Banking Federation represents the European banking sector, comprising 32 national associations. It covers a significant majority of banking assets, with 3,500 banks employing two million people. EBF members provide over €20 trillion in loans to the European economy and handle 400 million daily payment transactions. Established in 1960, the EBF supports a single financial services market and policies fostering economic growth. The post EBF Response to EBA Public Consultation on the Revised Guidelines on SREP and supervisory stress testing appeared first on EBF .