Supervisory Review Process (SRP)

The second pillar of the capital requirements in addition to minimum capital requirements (Pillar 1) and market discipline (Pillar 3). The Supervisory Review Process is a supplementary strongly qualitative aspect of supervision, featuring as intensive as possible contact between the supervisory authorities and the credit institutions. Within Pillar 2 there are both obligations for the supervisory authority as well as tasks for the credit institutions. Pillar 2 is independent from the chosen approaches within Pillar 1, but may be arranged in accordance with the nature, scope and complexity of the activities of the credit institution (see principle of proportionality).
The following elements are the components of the Supervisory Review Process:

Tasks of the credit institutions:

• Comprehensive risk management
• Internal Capital Adequacy Assessment Process (see ICAAP)

The FMA’s tasks (see SREP):

• Evaluation of the risk profile of the credit institution
• Evaluation of the internal processes, strategies, methodologies and procedures for identification of weaknesses
  where applicable supervisory measures