Identifying and assessing the risks faced by supervised entities is crucial for successfully conducting banking supervision and serves as a basis for the supervisory priorities that are set during the regular strategic planning process. ECB Banking Supervision conducts an annual risk identification and assessment exercise in close cooperation with the national competent authorities (NCAs). The analysis draws on a wide range of contributions, including from the Joint Supervisory Teams and the ECB’s horizontal microprudential and macroprudential functions. It is also informed by discussions with banks and other relevant authorities