The Full Form of SREP is‍ Supervisory Review and Evaluation Process.

The SREP also assesses the risk each institution poses to the financial system.

This process therefore makes it possible to determine capital and liquidity requirements and other supervisory measures to address the specific weaknesses of each institution. 

This methodology provides for a holistic and forward-looking assessment of the viability of the supervised institution.

The SREP is conducted in a proportional manner, both to significant and less significant institutions. The frequency and intensity of the SREP assessment takes into account the potential impact each institution may have on the financial system and its specific risk profile.

The fact that this methodology is used under the Single Supervisory Mechanism (SSM) allows peer comparisons and transversal analyses on a wide scale. It follows a “constrained judgement” approach, so as to ensure consistency among analyses conducted on all institutions, while taking into account the complexity and specificities of each institution within a clear and transparent framework. 

The SREP carried out on an annual basis by Banco de Portugal follows the guidelines of the European Banking Authority (EBA) in this respect, which entered into force on 1 January 2016, and the methodologies of the SSM for significant institutions and for less significant institutions. 

The procedures used by Banco de Portugal under the SREP take into account the size, systemic importance, nature and complexity of the institutions’ activities, in line with the principle of proportionality.