On 16 May 2023, the European Central Bank (ECB) published a manual with information necessary to execute Phase 2 of the asset quality review (AQR). The ECB and Member State competent authorities responsible for conducting banking supervision carry out AQRs of banks in accordance with the Single Supervisory Mechanism Regulation. Following completion of the AQR, joint supervisory teams comprising of the ECB and Member State competent authorities will write a letter to the bank outlining qualitative and quantitative findings in any area where it is found to be outside of accounting principles or supervisory requirements and the required remedial action the bank is expected to take. Some issues may lead to adjustments to available capital and Pillar 1 capital requirements at the next reporting date. The ECB has also published FAQs on the manual.