The European Central Bank (ECB) has published for consultation draft guides that set out principles underlying its expectations for banks’ internal capital adequacy assessment processes (ICAAP) and internal adequacy assessment processes (ILAAP).
When finalised the draft guides will not be legally binding nor will they be a substitute for any applicable regulatory requirement. However, they deduce from the ICAAP and ILAAP provisions of the CRD IV seven principles that will be considered, inter alia, in the assessment of each institution’s ICAAP and ILAAP as part of the Supervisory Review and Evaluation Process. These principles will serve as a starting point in the ECB’s discussions with individual institutions as part of its supervisory dialogue.
The deadline for comments on the draft guides is 4 May 2018.