August 17, 2017

BoE is consulting on the policy on valuation capabilities to support resolvability. The consultation sets out BoE’s proposed policy for the capabilities that firms should have in place to ensure that an inability to produce timely and robust resolution valuation does not impede resolvability. The responses are requested by November 17, 2017.

The consultation paper explains the role of valuations in resolution and the potential for valuation capabilities to constitute a barrier to resolvability. It sets out the proposed policy approach and its application, along with the proposed objectives for resolution valuation capabilities. The paper also contains proposed principles for resolution valuation capabilities, along with the rationale for these. The proposed policy includes principles for the data, information, models, processes, and governance arrangements that firms are expected to establish, maintain, and demonstrate. The firms would be expected to have capabilities in place to support the objective that valuations are sufficiently timely and robust not to impede the effectiveness of their preferred resolution strategy. The preliminary impact assessment provides a preliminary qualitative assessment of the costs and benefits of BoE's proposed valuations policy. BoE will use feedback received on this consultation paper to ensure effectiveness of any policy adopted in the future. The proposed policy applies to UK-based firms whose preferred resolution strategy involves the use of stabilization powers and to material UK subsidiaries of overseas-based banking groups. 

 

Related Link: Consultation Paper (PDF)

Comment Due Date: November 17, 2017

Keywords: Europe, United Kingdom, Banking, Valuation Capabilities, Resolvability, Resolution Planning, BoE

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