ECB clarification on ICAAPs and

ILAAPs and respective package

submissions
February 2025

1 Background

This document reminds banks of some of the ECB’s main supervisory expectations
on sound and effective capital and liquidity management in line with the ECB Guides
on the internal capital/liquidity adequacy assessment processes (ICAAP / ILAAP)
published in November 2018. It outlines some clarifications on the governance
around the submissions and key content areas which should be reflected in ICAAP
and ILAAP packages. Along with this it should be noted in certain sections that
wording will refer mostly to capital risk and management to improve readability,
however, similar considerations apply to liquidity risk and management; this is a
further reminder that much of the information is common within the ICAAP and
ILAAP and as such an appropriate level of coherence is expected, as per the above
guides and EBA guidelines.

It remains banks’ responsibility to determine and apply the most appropriate

approach to ensure sound capital and liquidity adequacy assessment processes
tailored to their own specificities. Therefore, these clarifications focus on sound
practices instead of setting additional expectations or requirements. Rather, they
should be understood as additional clarifications to be considered by banks to refine
or improve their capital and liquidity management practices.

Regarding the technical details around ICAAP and ILAAP package submissions, the
note “Technical implementation of the EBA Guidelines on ICAAP information
collected for SREP purposes” that was sent to banks in February 2017 remains
applicable and is included in the annex to this document.

2 Governance around ICAAP/ILAAP information collection

It is expected that ICAAPs/ ILAAPs are continuous processes that are subject to
strong internal governance arrangements which include sound approval and regular
review processes throughout the year, independently from the ICAAP/ ILAAP
information submissions to the ECB; these approval processes are sufficiently
evidenced in the respective minutes and underlying meeting documentation.

This refers to the internal documentation of all relevant processes, methodologies,

arrangements that form the ICAAP and the ILAAP and which form the bulk of the
ICAAP/ILAAP packages submitted to Joint Supervisory Teams (JSTs). Banks should
 ensure that the submitted documents are of sound quality but there is no general
necessity to re-approve or review these documents before submitting them 1.

As an exception from this general approach, it is expected that the capital and
liquidity adequacy statements are produced, agreed, and signed by the management
body before their submissions 2.

3 Elements to be considered in capital and liquidity adequacy

assessment processes

A sound and effective capital and liquidity planning is expected to address the
following supervisory expectations and provide the respective information around the
following elements.

3.1 Governance 3 and risk inventory

For capital/ liquidity and funding plans, it is expected that banks describe: (i) the
management body review and approval of the capital/liquidity and funding plan, (ii)
the governance around the capital/liquidity and funding planning process outlining
the functions responsible for the process and the functions contributing to it, (iii) the
frequencies for regular comprehensive redesigns of capital/liquidity and funding
plans based on revised underlying scenarios and assumptions and for more regular
updates of capital/liquidity and funding plans. The frequency should be
commensurate to the bank’s business model, its risk profile, and the dynamics of
changes in the external conditions under which the bank operates. Banks should
update swiftly their capital/liquidity and funding plans in case of material unforeseen
developments (referring, e.g., to (indicative and non-exhaustive list): macro-financial
and geopolitical developments, the ECB’s operational framework, the interest rate
environment). Banks should also provide evidence on how they use capital/liquidity
and funding plans for their risk management and decision-making in general.

Banks also should submit their complete risk inventory 4 and the underlying
assessment of their risk profile, capturing the normative and the economic
perspective.

1
As a matter of example, a material change of a risk quantification methodology applicable since
September 2021 should have been approved by the management body before September and it
should be subject to review by the second and third lines of defence from September onwards. No
additional approval or review of its documentation is needed when including it in the ICAAP package.
2
Note that there is no general expectation that institutions produce a specific “ICAAP report” for
supervisory purposes. Banks may produce such reports should they consider this meaningful.
3 Please refer to Principles 1 (Governance) and 7 (scenario updates) of the ECB ICAAP Guide.
4
See Principle 4 of the ECB ICAAP Guide for the underlying expectations.
3.2 Forward looking capital and liquidity5 adequacy

The ECB expects that banks conduct forward-looking capital adequacy assessments
considering the normative and the economic perspective for at least the next three
years. This includes in the normative perspective the assessment of the projected
fully loaded and transitional figures (capital, eligible liabilities, risk-weighted assets,
leverage ratio), and should also include future changes in the legal, regulatory, and
accounting frameworks. For the normative perspective and economic perspective,
both baseline and adverse scenarios should be applied. The assumptions underlying
the scenarios should be clearly described and justified and they should reflect the
firm’s complexity, risk profile, business model and external conditions under which it
operates. More specifically, banks are expected to demonstrate the credibility and
robustness of the macroeconomic scenarios underpinning the forward-looking capital
adequacy assessments, explaining to which extent macroeconomic assumptions are
consistent with official consensus forecasts.

As part of their capital planning process, banks should also identify the most material
risk drivers impacting the forward-looking normative and economic capital ratios,
including an explanation of the rationale behind the materiality assessment. The
capital plan should include a granular analysis on the sensitivity of the capital
positions to certain variables (e.g., probability of default of specific credit exposures)
underlying these material risk drivers and key scenario assumptions. Reflecting the
effect of a variation in the assumptions on the entity’s capital projections is important
to assess how sensitive a bank’s capital position is to changes in forecasted
developments and to identify the specific vulnerabilities of its capital position.

When it comes to stress testing 6, the design of adverse scenarios should reflect the
entity’s own risk identification, its key vulnerabilities, and severe developments in
relevant external conditions 7. In particular, the underlying macroeconomic
assumptions need to reflect an economic downturn that is at least as severe as
official consensus downside forecasts. In case of uncertainty, banks should consider
various outcomes and take a conservative approach. Banks should also explain in
detail the methodologies used for translating scenarios into regulatory and economic
capital effects, how these methodologies are calibrated and what are the
contributions of the different drivers in the projections (e.g., net interest income,
provisioning, risk weights, risk materialisations per risk type and material
portfolios/exposures). Banks should be able to demonstrate the credible translation
of macroeconomic forecasts into financial and risk metrics and vice versa.

While the normative perspective is more commonly established 8, the ECB expects
that banks implement a sound and reliable economic perspective to manage risks

5
In this section, the wording refers mostly to capital management to improve readability. However,
similar considerations apply to liquidity management.
6
Please refer to Principle 7 of the ECB ICAAP Guide.
7
“External conditions” comprise all relevant conditions under which the bank operates, including the
economic, political, regulatory, financial environment (e.g., GDP and unemployment rates, real estate
prices, share and bond prices, refinancing sources and conditions, inflation rate, interest rate curves,
regulatory / legal environment and changes, market competition and market trends).
8
See conclusions on page 5 of the ECB’s report on banks’ ICAAP practices.
 and capital based on economic value considerations and use it in their capital and
liquidity management including in operational and strategic decisions, e.g., regarding
capital distributions. Banks should provide relevant information on short- and
medium-term key drivers and vulnerabilities also for economic capital and liquidity
adequacy. The economic perspective is also expected to inform the normative
perspective projections and vice versa, including e.g. the risk that unrealised losses
observed in the economic perspective could materialise also in the normative
perspective.

Regarding internal capital, the ECB reminds banks of its expectation to conduct and
document an eligibility analysis for each component of internal capital, thoroughly
considering the two key criteria “continuity” and “economic value considerations” 9.
For instance, Additional Tier 1 (AT 1) instruments usually do not pass this eligibility
test and, thus, are considered problematic if they are included in internal capital10.
The ECB reminds banks that including only Common Equity Tier 1 (CET1)
instruments into internal capital does not automatically ensure that the quantified
amount of capital is adequate, given the fact that book values do not systematically
reflect the economic value of assets and liabilities. Indeed, banks should actively
manage their economic substance, including a regular assessment of unrealised
losses that may stem e.g., from under-provisioning of credits or decreases of the
market value of bonds not booked at fair value. As part of their ICAAP packages,
banks should demonstrate how this is ensured.

3.3 Capital and liquidity 11 management buffers

As part of their ICAAP and ILAAP packages, it is expected that banks provide
documentation on their capital and liquidity management buffers. A clear rationale for
their calibrations including the underlying analysis as well as how they are integrated
and used in practice consistent with other thresholds such as risk appetite limits and
recovery plan triggers in the bank’s overall capital and liquidity adequacy
management should be included in ICAAP and ILAAP packages. Any changes in
these thresholds should be described and justified.

Management buffers should be calibrated for both baseline and adverse scenarios in
such a way that the institution is adequately capitalised and funded to sustainably
operate under its intended business model. Banks should implement management
buffers in their internal risk management frameworks, ensuring that they are
maintained when baseline or adverse developments materialise respectively. Banks
meet these levels to be able to sustainably follow their business model. Where

9 The ECB ICAAP report (page 46) concluded on this that ”there are clear deficiencies in terms of how
banks justify the inclusion of capital components in their internal capital.”.
10
Note that the ECB has expressed its concerns regarding the inclusion of AT 1 instruments in several
publications: see Principle 5 of the ECB ICAAP Guide, Chapter 2.5 of the ECB’s report on banks’
ICAAP practices, the ECB reply to comment number 208 in the feedback statement in the public
consultation of the ICAAP Guide, the email on ECB expectations towards ICAAP package
submission sent out in February 2021.
11
In this section, the wording refers mostly to capital management to improve readability. However, the
similar considerations apply to liquidity management, respectively.
 feasible management actions are already considered in the projections, breaching
internally defined capital and liquidity needs signals that the sustainability of the
bank's business model is threatened. As such, management buffers are also a
natural starting point for reverse stress tests and a hand-over point to recovery.

Accordingly, banks should ensure consistency between their ICAAPs/ILAAPs and

their recovery plan arrangements, as the ICAAP and ILAAP and the recovery plan
are expected to be part of a risk management continuum that is implemented
consistently with the bank's risk appetite.

3.3.1 Continuum between capital/liquidity management thresholds

ICAAP/ILAAP, recovery framework and risk appetite are strongly interconnected as

they are all about capital/liquidity management. Accordingly, there should be a
continuum between the indicators and thresholds used, the governance
arrangements and the management actions taken between these three concepts 12.
More specifically, capital and liquidity targets should be set above ICAAP/ILAAP
early warning levels which should be higher than capital/liquidity limits taking into
account the management buffers in the risk appetite framework. Capital and liquidity
limits, on the other hand, are expected to be higher than or equal to recovery
indicator thresholds under the recovery plan.

3.3.2 Aspects informing capital and liquidity management buffers

Based on observed good practices, six different dimensions have been identified as
elements that were considered for the calibration of management buffers. Those
elements, detailed further below, encompass both internal and external components.
Banks are encouraged to assess the relevance of these dimensions or any
additional criteria and document how these elements or any other elements not listed
below have been used in the calibration of their management buffers. Observed
good practices included:

• Stakeholder expectations: Banks set management buffers based on external

expectations from, among others, investors, shareholders, depositors, rating
agencies, clients or market analysts.

• Indicative examples: In practice, potential counterparts such as other

banks and investors such as insurance companies or pension funds duly
analyse the bank's creditworthiness before entering or deciding to continue
a business relation or investment. For example, a pension fund will usually
have internal restrictions, e.g. in terms of a minimum rating of A-, on bonds

12
For the continuum between ICAAP and recovery plan, please refer to paragraphs 35 and 36 and to
example 2.1 of the ECB ICAAP Guide for the expectations regarding the consistency between the
ICAAP and recovery plans. For the consistency between ILAAP and recovery plan, please refer to
paragraph 35 and example 2.2 of the ECB Guide to the internal liquidity adequacy assessment process
(ILAAP).
 they may buy. If it is part of the bank's business model to attract pension
funds' investments, it should consider which capital levels need to be
maintained to get an external rating of A and use it for the holistic
assessment of all relevant stakeholders' expectations. Another
consideration refers to refinancing costs which also depend on the bank's
external rating and capital ratios. Banks should consider which maximum
refinancing costs they can afford to sustainably be able to generate profits,
given their business models.

• Risk appetite: Banks’ management board consciously decided on a set of

management buffers, considering their business strategy and operating
environment. These levels may be a function of the capital/liquidity needs
perceived as being suitable to execute the bank’s business strategy under
different circumstances.

• Internal stress tests: Banks set their baseline management buffers on the basis
of internal stress test results under adverse scenarios. This approach ensures
that the capital levels with which banks enter stress are high enough to sustain
adverse conditions and aims at making sure that banks’ business models
remain sustainable even after having experienced material depletions.

• Supervisory requirements: Banks set their management buffers for the

normative perspective ratios in relation to all relevant supervisory requirements
(e.g., Pillar 2 capital guidance (P2G), maximum distributable amount (MDA)
trigger level, leverage ratio and LR-P2R/P2G, where applicable).

• Capital management actions available: Banks managed capital levels in relation

to their management buffers depending on the availability of capital
management actions. Banks with a wider set of capital management actions
available may decide to operate closer to their management buffers factoring in
the effectiveness of the governance arrangements pertaining the activation of
capital management actions.

• Uncertainty around capital/liquidity planning: The larger the uncertainty around

the calculation and the projections of capital and liquidity figures, the higher the
management buffers are calibrated. For liquidity, for example, such
uncertainties may include external factors increasing funding vulnerabilities
(e.g., regarding the interest rate environment, macro-financial and geopolitical
shocks).

3.4 Distributions and other capital management actions

A robust capital planning process should focus on how, under baseline and adverse
conditions, banks can meet supervisory and economic capital needs, taking into
account minimum regulatory capital ratios and internal capital management
thresholds. In particular, banks should describe key management actions 13
embedded in their capital plans that are needed to maintain capital adequacy (e.g.,
capital raising, deleveraging, securitisation), elaborate for each scenario and action
on the credibility and the feasibility of such actions (including an assessment of
signalling effects) and quantify their individual impact on capital ratio projections
(capital, eligible liabilities, risk-weighted assets, leverage ratio).

Banks are also expected to maintain and describe a robust governance framework
and have effective processes in place to trigger and effectively apply management
actions in case of deterioration of their capital position. Banks should list
management actions that could be activated while sustainably following their
strategy, quantify their impacts and assess their feasibility under different scenarios.
Here also there should be a continuum in the respective escalation procedures
between management actions under the capital planning framework and available
recovery plan options.

As part of their ICAAP packages, it is expected that banks provide evidence on the
use of the ICAAP outcomes (taking into account the normative and the economic
perspectives) in concrete management decisions, e.g., in remuneration schemes
and decisions, capital allocation across business lines or entities, defining and
managing risk appetite, pricing of products, concrete credit decisions.

This also includes evidence on how current and future capital positions, both from
the normative and the economic perspective, for baseline and severe adverse
scenarios are taken into account in setting shareholder distribution policies and
decisions.

• Capital distribution policies and respective decisions on dividend payments or

share-buybacks should be well governed and commensurate with management
buffers and forward-looking capital adequacy. This implies that banks should
engage with their JSTs about any material change in their distribution policies or
about specific distribution plans before any publication.

• The ECB expects that banks that intend to distribute formalise and document
distribution policies that are approved by the management body and that are
included in their documentation submitted as part of the ICAAP packages.

• Distribution policies should ensure that distributions do not impact banks’ capital
positions in a way that could impede their ability to sustainably conduct their
business strategies taking into account sound capital targets based on properly
calibrated management buffers.

• When designing and communicating profit distribution policies banks are

expected to express the ordinary amount to be distributed via cash dividends or
share buy backs exclusively as percentage of profits - supervised entities

13
Please refer to para 47 of the ECB ICAAP Guide for a description of management action-related
expectations.
 should abstain from indicating absolute amounts. This is in line with the new
EBA Q&A 2023_6887.

• With reference to cases of reducing, redeeming or repurchasing own funds

instruments different from those under the point above, banks are reminded to
refrain from announcing own fund reductions without replacement to the holders
of the instruments before the institution has obtained the prior permission of the
competent authority, as laid out in Article 28 of the Commission delegated
regulation 241/2014.

Banks should remain particularly cautious when distributing interim profits, both
limiting the amounts distributed and delaying the pay-outs, as such profits may prove
volatile before the closing of the financial year. Distribution plans should be
commensurate with forward-looking capital positions both under credible baseline as
well as severe institution-specific adverse developments, reflected in a
comprehensive set of scenarios, and take into account their impact on the normative
as well as the economic perspectives.
4 Annex – Technical implementation of EBA/GL/2016/10

On 3/11/2016, the EBA published the final Guidelines (EBA/GL/2016/10) on the

collection of information related to the internal capital adequacy assessment process
(ICAAP) and the internal liquidity adequacy assessment process (ILAAP) (hereafter:
“EBA guidelines”). The present document is setting out – where necessary – the
technical specifics banks need to follow to ensure a smooth collection of
ICAAP/ILAAP information by the joint supervisory teams (JSTs), thus facilitating a
consistent approach to assessing institution’s ICAAPs and ILAAPs as part of the
supervisory review and evaluation process (SREP).

It is not about setting or prescribing a specific ICAAP/ILAAP approach as it is in the

institution’s responsibility to determine and apply appropriate approaches to ICAAP
and ILAAP. Moreover, it does not require institutions to produce a specific ICAAP
report for supervisory purposes. Accordingly, institutions shall submit the ICAAP and
ILAAP information determined by the EBA Guidelines, but taking into account the
specifications below concerning the delivery dates, formats and contents with regard
to that information. We consider harmonisation in the delivery of ICAAP and ILAAP
documentation necessary in order to fulfil the tasks related to the SREP, but the
ICAAP and ILAAP are and should remain internal processes of the institution itself.
Accordingly, the information items to be covered are prescribed, but the exact format
of the documents is generally not 14, thus allowing the use of already existing internal
documents.

4.1 Specifications regarding dates and format

ICAAP and ILAAP information shall be provided electronically via the established
communication channels to the relevant joint supervisory team (JST).

The information should be provided in accordance with the levels of application of

ICAAP and ILAAP set out in Articles 108 and 109 of Directive 2013/36/EU,
considering the level of application of SREP as specified in Article 110 of Directive
2013/36/EU and recognising waivers applied pursuant to Articles 7, 8, 10 and 15 of
Regulation (EU) 575/2013 and Article 21 of Directive 2013/36/EU. 15

Starting with SREP 2025, the submission process consists of two legs:

• Annual submission of key documents on 15 March

• Continuous submission of new or updated internal documents

Institutions are responsible for ensuring that the information provided to the relevant
JST is complete and up-to-date by the annual submission date of 15 March.

14 Exceptions are the EBA and the STE templates for collecting banks’ risk and internal capital figures as
well as financial and capital projections.
15 For subsidiaries, institutions are invited to contact their JST Coordinator for further operationalisation on
a case-by-case basis.
4.1.1 Annual submission of key documents

Banks shall submit annually by 15 March 16 the following key documents to JSTs:

• A capital/liquidity adequacy statement, reflecting the management body’s

view on capital/liquidity adequacy at the time of submission

• The latest available bank internal capital and funding plan

• A reader’s manual (including completeness confirmation)

• For the ICAAP:

(i) ICAAP template (submitted via STE, with the preceding year end as
the reference date)

(ii) Pillar 1 – ICAAP reconciliation document for the ICAAP template data

(iii) Financial and capital projections (submitted via STE, with the
preceding year end as the reference date)

• For the ILAAP:

(i) ILAAP template (submitted via STE, with the preceding year end as
the reference date).

(ii) EBA funding plan

The reader’s manual is intended to facilitate the assessment of the ICAAP and the
ILAAP. This manual should provide:

• an overview of the documents available on the annual submission date and

their status (new, unchanged, minor changes, major changes), highlighting,
where relevant, material changes since their last submission;

• a confirmation by the bank that the documents submitted throughout the year
and at the annual submission date are up-to-date and complete;

• an index linking the information items referred to in the EBA Guidelines and in
the specifications below to the documents provided by the institution (e.g. a link
to a specific document and, where relevant, a reference to specific chapters or
pages within the document) or, if information items are not included, an
explanation of why the item is not relevant, taking into account proportionality;

• references to ICAAP and ILAAP information publicly disclosed by the institution.

16 Notes:
a) If 15 March is a weekend day or a public holiday, then the submission date is the working day
preceding 15 March.
b) For significant institutions where the ECB is the host supervisor, a different submission date may
be agreed within the supervisory colleges.
4.1.2 Continuous submission of new or revised internal documents

Throughout the year, banks should submit any relevant new or significantly revised 17
internal ICAAP/ILAAP-related documents (e.g. policy documents, validation reports,
stress test documents, risk quantification methodology descriptions, etc.) as soon as
these documents become applicable internally. Banks agree with their JSTs whether
they should submit some or all documents directly after their inception or whether
they submit batches of documents, e.g. on a monthly basis. The continuous
submission of documents throughout the year enables a more proactive and
effective assessment of banks’ ICAAPs and ILAAPs.

When submitting revised documents, banks are required to provide the JST with a
description of how the revised document relates to previous versions, including a
description of key changes. The reader’s manual will enable JSTs to maintain an
overview of the full ICAAP/ILAAP package, including the updates of policy and
methodology documents.

Where internal documents or the reader’s manual refer to both the ICAAP and the
ILAAP, it is sufficient to send them just once – in either the ICAAP or ILAAP package
– and to explain in the reader’s manual(s), where to find the relevant documents.

4.2 Specifications regarding contents

Institutions are expected to provide all information items mentioned in the EBA
Guidelines or explain why the items are not relevant to them, taking into account the
size, complexity and business model of the institution. As a reminder, institutions are
requested to state explicitly in the reader’s manual which documentation and
information items are not, or only marginally, covered, owing to the application of
proportionality with respect to the size, business model and complexity of the
institution.

Institutions are responsible for submitting sufficiently granular information to allow

JSTs to assess their ICAAPs and ILAAPs.

4.2.1 ICAAP-specific information

Specifications regarding Section 6.2 of the EBA Guidelines – Information on risk

measurement, assessment and aggregation

The descriptions of the main differences between Pillar 1 quantification approaches

and risk measurement methodologies used for ICAAP purposes (see paragraph
31(c) of the EBA Guidelines) should, as far as possible, be complemented by a

17 “Significantly revised” means that substantial changes have occurred. Merely editorial changes such as
a name change of a department or persons, or a change in the version number of an existing
document following a formal re-confirmation, are not regarded as significant revisions requiring a re-
submission.
 quantitative reconciliation between Pillar 1 own funds requirements for risks and
respective ICAAP estimates. Institutions should provide in a separate document a
reconciliation that should in particular comprise differences in the scopes and
definitions of risks captured and material differences in major parameters (like
confidence levels and holding periods) and assumptions (e.g. regarding
diversification effects).

The reconciliation is the internal responsibility of the institution and can be done, for
example, in two steps:

• First, differences in Pillar 1 vs ICAAP quantifications that result from differences

in scope should be explained and quantified. This should cover, for example,
differences in the legal entities, exposures and risk types included.

• Second, starting with ICAAP quantifications that are based on the same scope
as Pillar 1 quantifications, institutions are expected to perform a risk-by-risk
reconciliation at least in a compound way (starting from ICAAP and showing
step-by-step the effects of key differences by type of underlying reason for
differences (e.g. confidence level), up to the Pillar 1 quantifications).

Institutions are requested to use the STE template (“ICAAP template”) to annually
provide information) on their risk categories and sub-categories (see paragraphs
32(a) and (b) of the EBA Guidelines). Institutions are expected to fill in the template
using the numbers they have produced for internal purposes and in line with their
internal risk taxonomy. No numbers should be changed or produced as a
consequence of the need to fill in the template provided. When filling in the template,
banks should take into account the guidance provided in the template under the tab
"instructions" and provide the definitions internally used to define the risk categories
and subcategories.

Specifications regarding Section 6.3 of the EBA Guidelines – Information on internal

capital and capital allocation

The description of the main differences between internal capital element/instruments

and regulatory own funds instruments should be complemented by a quantitative
reconciliation between internal capital and regulatory own funds (see paragraph
33(b) of the EBA Guidelines). Institutions should include this capital-related
reconciliation into the document on the risk-related reconciliation mentioned in the
first paragraph of this section.

4.2.2 ILAAP-specific information

Specifications regarding Sections 5.4 and 7.6 of the EBA Guidelines – Information on
stress testing framework and programme

Institutions are requested to annually provide information on the internal stressed

assumptions (ILAAP template) used for the quantification of liquidity adequacy by 15
March following the STE (short term exercise) rules for submission.
4.2.3 ICAAP and ILAAP conclusions and quality assurance

Specifications regarding Section 8 of the EBA Guidelines – ICAAP and ILAAP

conclusions and quality assurance 18

Capital Adequacy Statement (CAS) and Liquidity Adequacy Statement (LAS)

Institutions should include in their ICAAP and ILAAP packages two separate
documents (“Capital Adequacy Statement” and “Liquidity Adequacy Statement”)
containing concise statements about the view of the management body of the
institution’s capital/liquidity adequacy, supported by analysis of the ICAAP/ILAAP
set-up and outcomes. These documents should comprise indicatively about fifteen
pages each, allowing for the inclusion of sufficient substantiating evidence for the
institution’s capital/liquidity adequacy, while being concise and limited to key aspects
and, thus, ensuring full accountability of all management body members.

Further guidance on expected CAS contents

It is expected that the CAS at least addresses the following aspects (not in order):

• discuss how the ICAAP outcomes are embedded in the overall management
and (risk) management processes (including, for example, in reporting, capital
allocation, decision-making, limit setting, budgeting, strategy setting,
remuneration, and dividend distribution);

• identify actions needed to achieve/maintain capital adequacy and describe key

management actions planned that affect capital adequacy (e.g. capital raising,
deleveraging, risk reduction) and describe any major changes in the ICAAP,
both compared to the previous year and planned for the future (e.g.
fundamental methodological changes);

• includes a definition of what adequate capitalisation means from the

perspective of the institution, including relevant capital targets, risk appetite,
and minimum capitalisation;

• includes an explanation of how this predefined capitalisation, spelled out in all

relevant metrics and dimensions, allows the institution to sustainably operate
under its intended business model;

• includes the figures for key metrics applied, including relevant capital targets
and risk limits for normative and economic internal perspectives over the short
and medium term for baseline and adverse scenarios;

• explains the broad concept of the internal capital and describes the risks that
are material for the institution, given its current and future business activities,
and the main risk quantifications methodologies;

18 Note: In the SSM, the CAS and the LAS are the documents institutions submit in accordance with
paragraph 10(e) of the EBA Guidelines (“summary of main conclusions from ICAAP and ILAAP and
quality assurance information as specified in Section 8 of these Guidelines”)
• elaborates on the perspectives that are taken into account, also discussing
expected changes in regulatory/legal/accounting frameworks (e.g. impact of
IFRS 9) and their meaningful combination into a holistic assessment of the
capital adequacy;

• explain the key stress testing activities and conclusions, including in terms of
management actions;

• highlight main weaknesses of the ICAAP and how they are being addressed.

Further guidance on expected LAS contents

It is expected that the LAS at least addresses the following aspects (not in order):

• includes a definition of what an adequate liquidity and funding position means

from the perspective of the institution, including relevant buffer targets, risk
appetite, minimum level of stable funding;

• includes an explanation of how this predefined buffer and stable funding

position, spelled out in all relevant metrics and dimensions, allows the institution
to sustainably operate under its intended business model;

• includes the figures for key metrics applied, including relevant liquidity and
funding targets and risk limits for legal and internal liquidity and funding
perspectives over the short and medium term for baseline and adverse
scenarios;

• explains the broad concept of the internal buffer and stable funding definition
and elaborate on the risks that are material for the institution, given its current
and future business activities, and on the concepts of the main risk
quantifications methodologies;

• elaborates on the perspectives that are taken into account, also discussing
expected changes in regulatory/legal/accounting frameworks (e.g. impact of the
LCR phase-in) and their meaningful combination into a holistic assessment of
the liquidity and funding adequacy;

• explains the key stress testing activities and conclusions, including in terms of
management actions;

• discusses how the ILAAP is embedded in the overall (risk) management

process leading to: (i) regular stress testing and regular contingency funding
plan assessment; (ii) consistency between business limits, risk appetite
statement and ILAAP stress testing; (iii) the funds transfer pricing being used as
an effective way to steer the business; (iv) the ILAAP outcomes being
discussed when (funding) strategy is discussed; and (v) regular monitoring and
update of the collateral management framework and intraday liquidity risk
management framework;

• identifies actions needed to achieve/maintain liquidity and funding sustainability

adequacy, describe key management actions planned that affect liquidity and
 stable funding adequacy (e.g. fundraising, deleveraging, risk reduction), and
describe any major changes in the ILAAP, both compared to the previous year
and planned for the future (e.g. fundamental methodological changes);

• highlights main weaknesses of the ILAAP and how they are being addressed.

4.3 Transitional arrangements

4.3.1 General transition approach for 2025

The SREP 2025 cycle is the first cycle in which the new general submission date of
15 March (14 March in 2025) and the two-leg submission process are applicable.

By 14 March 2025, all documents that are foreseen for annual submission should be
sent to JSTs. In addition, banks should send all other relevant documents that have
not yet been sent to JSTs (because they are new or have been significantly
changed).

4.3.2 Exemptions regarding submission date

Since the ICAAP/ILAAP information submission date was brought forward to 14

March for 2025, banks can be granted some flexibility in submitting all or some of the
ICAAP/ILAAP package components above if that could help accommodate some
processes that have already been arranged:

• Preliminary data or draft documents (i.e. statements pending Board approval)

may be shared with the ECB in draft mode ahead of 14 March, even if the
formal adoption by the bank will take place between 14 and 31 March. The ECB
supervisors will review the information bearing in mind that it is in draft form.
The final data/package should be submitted by 31 March. Changes should be
flagged to facilitate the supervisory review.

• Those banks that still consider themselves unable to adjust their internal
processes to meet the 14 March deadline, neither in final nor in draft form, may
request a waiver from the JST allowing them to maintain the end-March
deadline in the 2025 cycle on an exceptional basis. This request can refer to the
whole package or some of the documents. The bank’s request should
sufficiently describe the obstacles preventing submission by 14 March and the
affected documents/information of the package. Such a request should have
been approved by the bank’s Board and submitted to the JST by no later than
31 December 2024.
© European Central Bank, 2025
Postal address 60640 Frankfurt am Main, Germany
Telephone +49 69 1344 0
Website www.ecb.europa.eu
All rights reserved. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.
For specific terminology please refer to the ECB glossary (available in English only).