ECB consults on capital and liquidity management for banks

The European Central Bank (ECB) launched a public consultation on the draft principles underlying its expectations for banks’ internal capital adequacy assessment processes (ICAAPs) and internal liquidity adequacy assessment processes (ILAAPs).

Banks submit ICAAP and ILAAP information packages to their Joint Supervisory Teams (JSTs) on a yearly basis. The JSTs take those packages into account in the annual assessments of ICAAPs and ILAAPs they conduct as part of the Supervisory Review and Evaluation Process (SREP). Institutions are encouraged to address any gaps or weaknesses in their ICAAPs and ILAAPs, in close dialogue with their Joint Supervisory Team at the ECB, which will start using the guides as from 2019 when assessing ICAAPs and ILAAPs.


In 2016, the ECB published its expectations for ICAAPs and ILAAPs for supervised banks. After careful assessment, the ECB identified significant differences in the approaches taken by individual banks and a need for improvements at all banks.

In early 2017, the ECB launched a multi-year plan for ICAAPs and ILAAPs to foster improvements. The ECB’s objective is to develop a more detailed set of supervisory expectations, taking into account comments received from institutions and other industry participants. After a first round of feedback between February and April 2017, the ECB updated the guides and now is inviting financial industry and other interested parties to provide feedback on them.

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