The members of the EACB welcome the opportunity to comment on the EBA draft GL on the revised common procedures and methodologies for the supervisory review and evaluation process (SREP) and supervisory stress testing.
While in principle we appreciate the idea to perform a consistency check and update of the SREP framework, we believe that the timing of this is not the most appropriate. In fact, in consideration of the ongoing Review of the CRD/CRR, we believe that the review of the Guidelines should be postponed until the legislative process is concluded to avoid any misalignments and consequent readjustment of the GL. This would avoid unjustified additional implementation burden for institutions.
Moreover, within the draft GL there are many references to regulatory products which are either not finalised or not yet implemented: for instance while the EBA GL on internal Governance and EBA/ESMA GL on fit and proper have been published compliance by the competent authorities is not clarified yet. Furthermore, the elements in chapter 5.10 indicate at least a reference to the content of the BCBS new GL on step-in risk which are currently not yet part of the EU framework (para. 134(e)). The same would be for interest rate risk in the banking book (IRRBB): while the EBA draft GL are under consultation the CRD review is tackling the same issue with a Level 1 legislative process. The draft GL also refer to the fact that EBA will review the CEBS Guidelines on outsourcing without giving further details. Finally, also the draft GL on stress testing (2017/17) are still under parallel review at EBA level.
If however the review process of the SREP GL were to be concluded now, it would be necessary to envisage a sufficiently long implementation period of at least 18 months.