Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 57

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 4
Chunk 57
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 is still under discussion, is the European Deposit Insurance Scheme (“EDIS”). The EDIS would enable the insurance of deposits regardless of the country of origin of the bank, thus creating a fully harmonized banking union. However, there remain political obstacles to the creation of the EDIS which have not yet been resolved. In 2019, a High Level Working Group on EDIS was created and charged with presenting a roadmap to start political negotiations. In April 2024, the European Parliament published a draft report to unlock the EDIS file, focusing only on liquidity support (the first stage of EDIS) and excluding banks subject to an institutional protection scheme and branches of foreign banks (the “EDIS Proposal”). The EDIS Proposal contemplates an eventual progress towards a fully mutualized EDIS, but a European Commission proposal would be needed for that. In May 2024, the Committee of Economic and Monetary Affairs (ECON) approved the EDIS Proposal; however, the plenary scheduled vote was postponed. 
At the national level, BBVA is subject to the Deposit Guarantee Fund of Credit Institutions, which operates under the guidance of the Bank of Spain.
Banks in the EBU face increasingly intense supervisory scrutiny, in particular with respect to asset quality and capital and liquidity levels. The Supervisory Review and Examination Process (“SREP”) is an annual exercise that determines a bank’s capital requirements, on a “Pillar 2” basis, as well as the qualitative requirements that the bank must address in the following year. This exercise takes four different elements of a bank into account: (a) business model and profitability, (b) capital, (c) liquidity and (d) governance and risk management.
In addition, any work done during the year related to on-site inspections, deep dives, thematic reviews, internal model investigations and other ad hoc requests (e.g., targeted review) feeds into the SREP. The SREP culminates with a supervisory dialogue at the end of the year, where a preliminary review of the bank is presented. In addition, prior to the beginning of each year, the SSM presents a Supervisory Examination Program (“SEP”) which details the inspections, high-level meetings and potential visits to group subsidiaries that are forecasted to occur throughout the year. The process for creating a SEP for each entity begins with defining the SSM’s risk dashboard and the classification of risks according to their probability of occurring and probable magnitude of impact, which then translates into the SSM’s priorities for the following