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Understanding the Supervisory Review and Evaluation Process (SREP)

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  • General description

    The objective of the course is to provide participants with a deep overview of the components of the European SREP framework and EBA Guidelines, including changes and clarifications being introduced in 2018.

    Participants will also gain insights into the way how supervisors can apply SREP components in practice, in particular focusing on key aspects of scoring, business model analysis, assessment of internal governance and institution-wide controls as well as assessment of capital and liquidity adequacy and determination of additional capital and liquidity requirements.

    Instructors will also recall the rationale behind the assessment of risks to capital and risks to liquidity and funding. The course will also explain how SREP assessments are linked with other supervisory activities, in particular in crisis management (e.g. assessment of recovery plans).

    The course will also include interactive exercises and a practical case study focused on the assessment of capital adequacy and the determination of additional capital requirements for a cross-border banking group, where participants could apply in practice key concepts introduced in the Guidelines and covered by the instructors.

  • Background

    The key purpose of supervisory review and examination process (SREP) is to ensure through the supervisory assessment that institutions (credit institutions and investment firms) have adequate arrangements, strategies, processes and mechanisms to ensure a sound management and coverage of risks, to which they are or might be exposed as well as well as capital and liquidity to ensure that such risks are adequately covered.

    SREP lies at the core of supervisory work. This brings together the outcomes of all supervisory processes and activities into one comprehensive view on an institution’s risk profile, risk management and controls, business model, governance arrangements and adequacy of capital and liquidity resources, leading, as a result, to a view on the overall viability of an institution.

    The common European SREP framework was established in 2014 (and has been applied in practice since 2016) by means of the EBA Guidelines on common procedures and methodologies for SREP (SREP Guidelines). Many of its components (SREP components) have been known to supervisors already before (e.g. assessment of risks to capital), but many the frameworks also saw the introduction of new elements like business model analysis or comprehensive assessment of liquidity adequacy.

    These Guidelines also provide a solid foundation for the work of supervisory colleges in their annual joint risk assessments and in reaching the joint decision on institution-specific prudential requirements.

    The framework introduced in 2014 remains robust and serves the purpose of ensuring convergence of supervisory practices across the EU well, but in the light of the recent developments in the EU and international fora, as well as EBA findings from the ongoing monitoring and assessment of convergence of supervisory practices, certain changes and clarifications are being introduced into SREP Guidelines in 2018. In particular, these changes related to closer integration of supervisory stress testing into SREP and using its outcomes to set non-legally binding Pillar 2 capital guidance.

  • Topics covered

    • Business Model Analysis
    • Assessing risks to capital, liquidity and funding
    • SREP capital and liquidity adequacy assessments
    • Supervisory stress testing
    • Using SREP outcomes for crisis management purposes
    • Impact of FinTech on banks’ business models

  • How the course will work

    Total course length: between 12 and 15 hours.

    A certificate of attendance will be provided to all participants after the course.

  • Meet the instructors

    Slavka Eley was appointed Head of the Supervisory Convergence Unit within at the EBA in February 2013. She is responsible for the EBA’s work on the supervisory policy and convergence, efficient functioning of colleges of supervisors, recovery planning and the early intervention framework, and assessment of equivalence of third countries. The supervisory policy work includes IT risks and risks related to financial innovation. She chaired different working groups at the EBA as Sub-group on Risk Assessment Systems mandated to develop the common SREP framework. Currently she chairs the Sub-group on Supervisory Effectiveness and Convergence. Prior to joining the EBA Slavka worked for the National Bank of Slovakia where she held a number of roles in supervision and prudential policy. She holds a MBA in general management from the City University of Seattle and a Master degree in Mathematics, Physics and Education from the Comenius University Bratislava.

    Oleg Shmeljov is a Bank Expert in the EBA Oversight Department, where he is primarily involved in the topics of supervisory convergence, Pillar 2 and supervisory review and evaluation process (SREP) related policy development and assessment work. Prior to joining the EBA predecessor, Committee of European Banking Supervisors (CEBS), Oleg worked at the Estonian Financial Supervisory Authority, where he was institutional supervisor for one of the largest banks, and was also involved in the policy development question in the field of supervisory risk assessment and crisis management. Before joining the supervisory community Oleg worked in various risk management roles in a commercial bank. Oleg a holds MSc degree in Economics from Tallinn University of Technology.

    Deniz Igan is the Deputy Chief in the Research Department’s Macro-Financial Division at the International Monetary Fund. Previously, she worked in the Western Hemisphere Department and the European Department. She holds a B.A. from Bilkent University and an M.A and Ph.D. from Princeton and will be visiting the EUI in March-June 2018 as a Young Policy Leaders Fellow at the School of Transnational Governance. Her research interests include corporate finance, banking, real estate, political economy, financial crises, and financial regulation.

  • Prerequisites

    Degree in Economics, Law or Social Sciences.

    The course is open to participants without professional supervisory or SREP experience. Prior to taking part in the training, participants are advised to familiarise themselves with the EBA Guidelines on common procedures and methodologies for SREP.

  • Fees

    1750€ – Public Authorities (e.g. National Competent Authorities, Central Banks) and European Institutions*

    2250€ – Private Sector

    1000€ – Research assistants or Associate Professors

    550€ – Students (with certificate of studies)

    The course fee covers coffee and lunch breaks. Travel and hotel costs are not included.


    * In case of registration of 3 participants from the same public body, the course fee is waived for one of them. To benefit from the deal:

    • the names of the 3 participants have to be communicated to fbf@eui.eu before registering
    • the names of other registered people from the same institution cannot be communicated. It is upon your responsibility to get in touch with your HR division
    • a single debit note will be issued for the 3 participants followed by one payment

    CANCELLATION POLICY

    • In case a course is cancelled, registered participants will receive the full refund.
    • In case a course is moved to another date, registered participants may request a voucher to attend another FBF course.
    • Registered participants who cancel their participation will receive a voucher to attend another FBF course.

    For more details, please contact fbf@eui.eu
  • Practical information

    Accommodation 

    Recommended hotels:
    Hotel Villa La Stella (20 min walking distance from EUI )
    Hotel Cellai
    Hotel Palazzo Ricasoli
    Hotel de la Pace
    Hotel Athenaeum

    Wi-Fi

    On arrival, participants will be provided with temporary wi-fi access for the whole duration of the course.

    Privacy Notice

    The personal information you have provided will be processed in compliance with the EUI Privacy Statement for conferences.
    For general queries: fbf@eui.eu

  • Course material

    Registered participants can access the course material using the password provided by the FBF secretariat.