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Bank Supervision | Supervisory Review and Evaluation Process (SREP)

Overall SREP assessment of the bank

The outcome of the supervisory assessment is the overall SREP assessment which includes setting a score in the range from 1 (the risks identified pose no material risk to the viability of the bank) to 4 (the risks identified pose a high level of risk to the viability of the bank). Where the bank is considered to be failing or likely to fail, the supervisor assigns to the bank the overall SREP score "P".

The overall SREP assessment is based on the following elements:

  1. business model analysis;
  2. assessment of the corporate governance and internal controls system;
  3. assessment of risks to solvency;
  4. assessment of risks to liquidity;
  5. assessment of adequacy of capital; and
  6. assessment of adequacy of liquid assets.

The supervisor makes the overall SREP assessments of different degrees of granularity depending on the group to which the bank belongs and its size, nature, complexity and riskiness of business activities, and/or its business model.

Based on the findings of the conducted SREP process, the NBS may undertake, in accordance with regulations, appropriate supervisory measures to remove the identified irregularities and to set the capital adequacy ratio higher than the one prescribed.