Supervisory Review and Evaluation Process (SREP)

The Supervisory Review and Evaluation Process (SREP) is a regulatory framework where banking supervisors assess how well a bank manages its risks, such as credit, liquidity, and operational risks. They review the bank’s financial health, risk management practices, and capital adequacy to ensure it can withstand financial stresses. Based on this evaluation, supervisors may require the bank to hold more capital or improve its controls. SREP helps safeguard the stability of the financial system by ensuring banks remain resilient and able to meet their obligations even during economic downturns.