On February 20, 2017, the European Central Bank (“ECB“) published a letter from Ms. Daniele Nouy, Chair of the Supervisory Board of the ECB, to the management of significant institutions under the Single Supervisory Mechanism (“SSM“) on the development of comprehensive SSM guides on the Internal Capital Adequacy Assessment Process (“ICAAP“) and the Internal Liquidity Adequacy Assessment Process (“ILAAP“).

In January 2016, the ECB published a letter setting out its expectations as to the ICAAP and ILAAP information that institutions are expected to submit. Ms. Nouy explains that it has since become clear that there are still several areas in which improvements are needed across banks. To help move banks towards an adequate level of information provision, the ECB has started a multi-year project to develop comprehensive SSM guides on the ICAAP and ILAAP. The first step in this regard is to receive feedback from recipients of the letter on the two draft guides that are attached to the letter. The draft guides set out more detailed ICAAP and ILAAP principles, which provide a road map that the ECB intends to follow.

The ECB seeks comments on the guides by May 31, 2017. It will then review the guides in the light of the comments received and will publish the guides for consultation at the start of 2018.

In the meantime, institutions are expected to comply with the 2016 expectations and to submit corresponding documentation in accordance with the EBA guidelines on ICAAP and ILAAP information collected for the purposes of the supervisory review and evaluation process by April 30, 2017.

The full text of the letter can be found here.