ECB ICAAP and ILAAP Package: What the 2026 Clarification Changes

ByRegReportingDesk

On 26 June 2026 the ECB announced a review of roughly 130 of its banking supervision publications, and in mid-July it followed through on the part that touches every capital and liquidity team: an updated ECB clarification on ICAAPs and ILAAPs and respective package submissions, alongside an updated version of the ECB Guide to the internal capital adequacy assessment process, published on 15 July 2026 and dated July 2026. If you sit inside a significant institution supervised directly by the ECB, the July 2026 clarification and revised ICAAP Guide are important parts of the supervisory reference set for the next ICAAP and ILAAP cycle.

The ECB’s ICAAP and ILAAP information-collection process has two legs: an annual submission of specified key documents by 15 March and continuous submission throughout the year of relevant new or significantly revised internal ICAAP/ILAAP documents as they become applicable internally. The July 2026 material leaves the underlying obligation intact. It restates the ECB’s expectations, tidies the surrounding library of guides and letters, and clarifies the management buffer as an internal capital-management concept rather than a supervisory requirement. Getting the framing wrong feeds straight into the Supervisory Review and Evaluation Process: the ICAAP informs the Pillar 2 capital determination, while the ILAAP informs the Pillar 2 liquidity determination.

Related reading: our ICAAP and ILAAP reporting guide

The dates that matter for the 2026 cycle

The calendar behind this topic is the reason it is worth reading now rather than at year-end. Keep these reference points in front of the team:

  • 26 June 2026: the ECB announces a review of about 130 guides, reports, letters and methodologies, with around 40 to be discontinued.
  • Mid-July 2026: the ECB publishes the updated ICAAP and ILAAP package clarification, and a new version of the ICAAP Guide carrying a 15 July 2026 version date.
  • 15 March: the annual submission date for the specified key documents. If 15 March falls on a weekend or public holiday, the deadline moves to the first working day after 15 March; for significant institutions for which the ECB is the host supervisor, another date may be agreed within the supervisory college.
  • Reference dates are document-specific: the ICAAP template, financial and capital projections and ILAAP template use the preceding year-end, while the capital and liquidity adequacy statements reflect the management body’s view at the time of submission and the capital and funding plans are the latest available.
  • Annual SREP cycle: the Joint Supervisory Team assesses the ICAAP and ILAAP packages; the ICAAP informs the Pillar 2 capital determination and the ILAAP informs the Pillar 2 liquidity determination.

What the ECB actually published in July 2026

Three moving parts sit behind the headline. The first is housekeeping with teeth. The ECB is running a review of its published supervisory material to improve consistency and ease of use, covering around 130 documents and discontinuing roughly 40 of them. For reporting teams that maintain a mapping of which ECB expectation drives which internal control, that clean-up matters, because a letter cited last year may now be labelled discontinued and should no longer be treated as current supervisory guidance, even though the ECB will keep it accessible for transparency and archival purposes. We cover the wider clean-up in our note on the ECB supervisory guidance simplification.

The second part is the clarification itself. It reminds banks of the ECB’s main supervisory expectations on sound capital and liquidity management, in line with the ICAAP and ILAAP guides first published on 9 November 2018. The clarification restates governance around the submissions and the content areas that a package should reflect. Read it as a consolidation of standing expectations, not as a fresh legal obligation.

The third part is the revised ICAAP Guide. Most of the seven-principle structure carries over unchanged. The visible edit is a tighter explanation of the management buffer, which is the change most likely to reshape a supervisory dialogue. The current reference set is the July 2026 ICAAP Guide, the November 2018 ILAAP Guide and the July 2026 clarification on ICAAPs, ILAAPs and respective package submissions.

Who has to submit, and who does not

The ECB clarification speaks to significant institutions supervised directly by the ECB under the Single Supervisory Mechanism, the significant supervised entities referred to in Article 2(16) of the SSM Framework Regulation, Regulation (EU) No 468/2014. The scope of the ICAAP obligation itself runs through Article 73 of the Capital Requirements Directive, Directive 2013/36/EU, with the levels of application set by Article 108 of the same directive.

Two boundaries catch teams out. Less significant institutions answer to their national competent authority, not the ECB directly, so the operational deadline and submission channel come from the national framework even where the NCA aligns to ECB expectations. Investment firms fall under the separate IFD/IFR prudential regime. Article 24 IFD requires an internal capital and liquid-assets assessment for firms that are not small and non-interconnected; competent authorities may also apply the requirement to small and non-interconnected firms. This is why the CSSF’s SREP for investment firms reads differently from the bank ICAAP. The banking ICAAP/ILAAP framework and the Article 24 IFD framework therefore need to be mapped separately for each legal entity.

The management buffer, reframed

The ECB highlighted the management-buffer explanation as the principal clarification in the revised ICAAP Guide. The ECB now makes clear that the management buffer is the bank’s own view of the capital it needs for its business model to remain sustainable. Competent authorities review the capital levels a bank sets and provide their own steer through Pillar 2 guidance. The management buffer does not constitute a supervisory requirement.

That distinction is easy to state and easy to blur in practice. The management buffer sits inside the risk appetite framework as a figure the bank owns, arrived at through its own capital planning. Pillar 2 guidance, or P2G, is the supervisory expectation the ECB communicates on top of the binding requirements, and it is not the same object as the Pillar 2 requirement, P2R, which is binding. The buffer is your number to justify, and the ECB will still challenge how you got there.

For the capital stack itself, the practical consequence is separation. Present the management buffer as an output of the ICAAP, present P2G as the supervisory guidance you have received, and do not let the package imply that the two are one figure blessed by Frankfurt. If your internal documentation still frames the management buffer as a supervisory add-on, that is the first paragraph to rewrite this cycle.

What goes in the package: the content areas the ECB lists

EBA/GL/2016/10 sets out the ICAAP and ILAAP information that competent authorities collect for SREP purposes. The July 2026 ECB clarification adds technical and content specifications to that framework. Common content covers the business model and strategy, the risk governance and management framework, and the risk appetite framework. These sections anchor both the ICAAP and the ILAAP because a supervisor reads capital and liquidity adequacy against the same strategy and the same risk appetite.

The ICAAP-specific content covers the overall ICAAP framework, risk measurement, assessment and aggregation, capital planning, and stress testing. This is the Article 73 core: sound, effective and comprehensive strategies and processes to assess and maintain the internal capital a bank considers adequate for its risks, built on the ECB’s two perspectives, the economic and the normative, which are expected to complement and inform each other.

The ILAAP-specific content covers liquidity and funding risk management, the funding strategy, the strategy on liquidity buffers, and the cost-benefit allocation mechanism. The ILAAP rests on Article 86 of the Capital Requirements Directive, which requires robust strategies, policies, processes and systems for identifying, measuring, managing and monitoring liquidity risk across time horizons, including intraday, so that adequate liquidity buffers are maintained. The cost-benefit allocation mechanism is part of the ILAAP framework and should show how liquidity costs, benefits and risks are allocated within the institution. If you want to align the ILAAP narrative with what you already file, our liquidity reporting guide on the LCR, NSFR and ALMM sets out the quantitative returns that sit underneath it.

Governance the ECB checks before the numbers

Principle 1 of the ICAAP Guide puts the management body on the hook for sound governance of the whole process, and the July 2026 clarification does nothing to soften that. Each year the management body is expected to produce and sign a clear and concise capital adequacy statement, the CAS, giving its assessment of the institution’s capital adequacy supported by ICAAP outcomes. The ILAAP carries its equivalent, a liquidity adequacy statement, produced, agreed and signed by the management body on the same footing.

Where teams get this wrong is treating the CAS as a covering letter drafted by the finance function and countersigned at the end. The ECB expects the statement to demonstrate that the management body understands the drivers and vulnerabilities of capital adequacy, the main ICAAP inputs and outputs, and the coherence of the ICAAP with the strategic plan. The authority to sign on the management body’s behalf is for the institution to decide in light of national rules, but the substance behind the signature is what the JST tests. The CAS should set out the management body’s assessment of capital adequacy and be supported by ICAAP outcomes and other relevant information.

The guide also expects a defined approach to regular internal review and validation across the three lines of defence, and a process that proactively adjusts the ICAAP when the bank enters new markets, launches new products or restructures the group. Segregation of duties runs through all of it: the function that builds a risk-quantification method is not the function that independently validates it.

How the package feeds the SREP and your Pillar 2

The ICAAP and ILAAP feed all SREP assessments. The ICAAP informs the Pillar 2 capital determination, while the ILAAP informs the Pillar 2 liquidity determination. The revised ICAAP Guide states that a good ICAAP reduces uncertainty about the institution’s risks and increases supervisors’ confidence in its ability to maintain adequate capitalisation and manage risks effectively.

The timing lands next to a forthcoming change on the supervisory side. The EBA published final revised SREP and supervisory stress testing Guidelines on 26 June 2026, but they apply from 1 January 2027. Until then, EBA/GL/2022/03 remains the applicable SREP framework. From 1 January 2027, the revised Guidelines will replace EBA/GL/2022/03 and EBA/GL/2017/05 as the EBA SREP framework for competent authorities. Reading the ECB clarification and the EBA’s revised SREP guidelines together is the sensible move, because they describe the same package from the two ends of the same conversation. For the supervisory priorities that frame this year’s assessment, our ECB SREP 2026 priorities note gives the wider context.

What to check before your next ICAAP and ILAAP submission

Turning the July 2026 documents into a work list is straightforward if you keep it concrete. First, reconcile every internal reference to an ECB guide or letter against the post-review library, because a source that was discontinued in the clean-up should not still be cited in your framework documentation. Second, rewrite any passage that presents the management buffer as a supervisory requirement, and separate it cleanly from P2G. Third, walk each content area in the clarification against your current package table of contents and close the gaps, paying particular attention to the ILAAP cost-benefit allocation mechanism and the ICAAP stress-testing narrative.

Then check the mechanics. Confirm that the annual key documents are complete and up to date by 15 March, apply the preceding year-end only to the ICAAP template, financial and capital projections and ILAAP template, and maintain the continuous-submission process for relevant new or significantly revised internal documents. Schedule the CAS and LAS for production, agreement and signature by the management body before submission. The first time I assembled a package to a JST, the constraint that nearly ran us past the deadline was management body diary time, getting them enough of it to genuinely challenge the statement before signing.

Frequently Asked Questions

Is the July 2026 clarification a new regulatory requirement?

No. The clarification reminds banks of the ECB’s existing supervisory expectations and restates them in line with the ICAAP and ILAAP guides published on 9 November 2018. The underlying obligations still flow from Article 73 of the Capital Requirements Directive for the ICAAP and Article 86 for the ILAAP. It is a consolidation of standing expectations, delivered as part of a wider review of the ECB’s supervisory publications.

Does the revised ICAAP Guide change how much capital we have to hold?

There is no new capital number. The change is conceptual: the guide clarifies that the management buffer is the bank’s own view of the capital its business model needs, and that it is not a supervisory requirement. Your binding requirements still come through Pillar 1, the Pillar 2 requirement and the combined buffer requirement; Pillar 2 guidance remains a supervisory expectation communicated separately.

Which institutions does the ECB clarification apply to?

It applies to significant institutions supervised directly by the ECB, the significant supervised entities under Article 2(16) of the SSM Framework Regulation. Less significant institutions submit to their national competent authority under the national framework, and investment firms that are not small and non-interconnected are subject to the internal-capital and liquid-assets assessment under Article 24 of the Investment Firms Directive; competent authorities may also apply that requirement to small and non-interconnected firms.

What is the reference date and when is the package due?

The annual key documents are due by 15 March, moving to the first working day after 15 March where it falls on a weekend or public holiday. Reference dates are document-specific: the ICAAP template, financial and capital projections and ILAAP template use the preceding year-end, while the adequacy statements reflect the management body’s view at submission and the capital and funding plans are the latest available. A different deadline may be agreed for significant institutions for which the ECB is host supervisor.

Who has to sign the capital adequacy statement?

The management body is expected to produce and sign the capital adequacy statement each year, and to sign the liquidity adequacy statement for the ILAAP on the same basis. The institution decides which function signs on the management body’s behalf in light of national rules, but the statement must show genuine management-body understanding of capital and liquidity adequacy, not a boilerplate attestation.

How does the package connect to the SREP score?

The ICAAP and ILAAP feed all SREP assessments. The ICAAP informs the Pillar 2 capital determination, while the ILAAP informs the Pillar 2 liquidity determination. EBA/GL/2022/03 remains the applicable SREP framework until the revised Guidelines apply on 1 January 2027. From that date, the revised Guidelines will replace EBA/GL/2022/03 and EBA/GL/2017/05 as the EBA SREP framework for competent authorities. The ECB states that a good ICAAP reduces supervisory uncertainty and increases confidence in the institution’s ability to maintain adequate capitalisation and manage risks effectively.

Do the November 2018 ICAAP and ILAAP guides still apply?

The November 2018 ILAAP Guide remains part of the current reference set. The November 2018 ICAAP Guide has been superseded by the updated ICAAP Guide published on 15 July 2026. Read the July 2026 ICAAP Guide together with the November 2018 ILAAP Guide and the July 2026 clarification.

Key Takeaways

  • The ECB published an updated ICAAP and ILAAP package clarification and a revised ICAAP Guide in mid-July 2026, as part of a review of about 130 supervisory publications announced on 26 June 2026.
  • The clarification restates existing supervisory expectations in line with the 9 November 2018 ICAAP and ILAAP guides; it is not new law.
  • The revised ICAAP Guide clarifies that the management buffer is the bank’s own view of the capital its business model needs, and does not constitute a supervisory requirement; Pillar 2 guidance is the supervisor’s separate steer.
  • Packages apply to significant institutions supervised directly by the ECB under Article 2(16) of the SSM Framework Regulation; the ICAAP rests on Article 73 CRD and the ILAAP on Article 86 CRD.
  • EBA/GL/2016/10 sets out the ICAAP and ILAAP information that competent authorities collect for SREP purposes; the ILAAP framework includes the cost-benefit allocation mechanism.
  • The management body is expected to produce and sign the capital adequacy statement and the liquidity adequacy statement each year; each statement should demonstrate the management body’s understanding of the institution’s capital or liquidity adequacy, its main drivers and vulnerabilities, and the relevant ICAAP or ILAAP inputs and outputs.
  • The ICAAP and ILAAP feed all SREP assessments. The ICAAP informs the Pillar 2 capital determination, while the ILAAP informs the Pillar 2 liquidity determination. EBA/GL/2022/03 remains applicable until the revised SREP Guidelines take effect on 1 January 2027.
  • Apply the document-specific reference dates, submit the specified annual key documents by 15 March and operate the continuous-submission process for relevant new or significantly revised internal documents.

Sources and References

  • ECB Banking Supervision, “ECB streamlines supervisory guidance to improve clarity and transparency”, press release, 26 June 2026: bankingsupervision.europa.eu
  • ECB, “ECB clarification on ICAAPs and ILAAPs and respective package submissions” (July 2026): bankingsupervision.europa.eu
  • ECB, “Guide to the internal capital adequacy assessment process (ICAAP)”, revised version July 2026: bankingsupervision.europa.eu
  • ECB, “Guide to the internal capital adequacy assessment process (ICAAP)”, November 2018, superseded by the July 2026 Guide.
  • ECB, “Guide to the internal liquidity adequacy assessment process (ILAAP)”, November 2018: bankingsupervision.europa.eu
  • Directive 2013/36/EU, consolidated version current at 11 July 2026, Articles 73, 86, 108 and 109, EUR-Lex.
  • Regulation (EU) No 468/2014 (SSM Framework Regulation), Article 2(16), EUR-Lex: data.europa.eu
  • EBA, “Final Report on revised SREP and supervisory stress testing Guidelines”, 26 June 2026 (references EBA/GL/2016/10 on ICAAP and ILAAP information): eba.europa.eu
  • ECB Banking Supervision, “ECB publishes final guides for banks on their capital and liquidity management”, press release, 9 November 2018: bankingsupervision.europa.eu

Reading the July 2026 changes into next year’s package

The July 2026 material rewards a bank that treats its ICAAP and ILAAP package as a live governance product rather than an annual filing. The obligation has not moved, but the ECB has removed one persistent ambiguity, tidied the reference library your documentation points at, and restated the content it wants to see. Banks should separate the management buffer from Pillar 2 guidance, assess the package against the applicable information requirements and give the management body sufficient time to own and sign the capital and liquidity adequacy statements.

Last updated: July 2026

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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