How will the roll-out of the Supervisory Review and Evaluation Process to the wider banking sector affect supervision of "less significant institutions" in the Banking Union?

On 16 August 2017 the ECB-SSM published further details setting out principles on how the Supervisory Review and Evaluation Process (SREP), as applied within the Banking Union, will be rolled-out from 2018 to all Banking Union Supervised Institutions (BUSIs). This means that the process currently employed in supervising ca. 130 banking groups will be rolled-out to the ca. 5,000+ legal entities that are categorised for SSM purposes as "Less Significant Institutions" (LSIs).

For some affected BUSIs this will be welcome, for others it will mean additional costs and changes to engagement with supervisors both in and outside the Banking Union. This Client Alert assesses those details and how it will affect existing BUSIs and those entities relocating to the Banking Union as a result of BREXIT or otherwise.

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