The European Central Bank has published two consultations on draft guides on the internal capital adequacy assessment process (ICAAP) and the internal liquidity adequacy assessment process (ILAAP). The draft Guides, which will be relevant to institutions within the Single Supervisory Mechanism, are designed to assist institutions in strengthening their ICAAPs and ILAAPs and encourage the use of best practices by explaining in greater detail the ECB’s expectations.

The draft ICAAP and ILAAP Guides each set out seven principles that have been derived from the relevant provisions of the Capital Requirements Directive and that will be considered, among other things, by the ECB in the assessment of each institution’s ICAAP or ILAAP as part of the Supervisory Review and Evaluation Process. Frequently Asked Questions have also been published alongside the draft guides.

In addition to the draft Guides and relevant EU law and national law, the ECB also encourages institutions to take into account other relevant publications from the European Banking Authority and international fora such as the Basel Committee on Banking Supervision and the Financial Stability Board.

Feedback on the draft guides is requested by May 4, 2018. The ECB also proposes to hold a public hearing on the consultations on April 24, 2018.

View the draft ECB Guide to ICAAP.

View the draft ECB Guide to ILAAP.

View the Frequently Asked Questions.