SRB published its first multi-annual programming document, including its Work Program for 2018. SRB sets out an ambitious roadmap for improving the resolvability of the banks under its remit over the next three years.
Key objectives include completion and refinements of resolution plans and definition of Minimum Requirement for own funds and Eligible Liabilities (MREL) for all major banking groups in the SRB remit, reinforced crisis preparedness, and further operationalization of the Single Resolution Fund (SRF). To achieve its objectives, SRB has defined the following five strategic areas of operation in which progress is to be accomplished:
- Strengthening resolvability for SRB entities and less significant institutions
- Fostering a robust resolution framework
- Preparing and carrying out effective crisis management
- Operationalizing the SRF
- Establishing a lean and efficient organization
With respect to the resolution plans, the objective is to complete resolution plans for all major banking groups by 2020, including binding minimum requirements for own funds and eligible liabilities (MREL) targets on all levels of a group. In 2017, SRB has started to develop binding targets for major banking groups. SRB intends to define MREL requirements for these groups in 2018, with an increased focus on the quality and the internal location of MREL, in particular ensuring that there are sufficient subordinated instruments to implement banks’ preferred resolution strategies. Beyond MREL, resolution plans will benefit from the growing experience and ongoing policy work in many domains, for example, on impediments to resolution. SRB will also reinforce the crisis preparedness, aiming to implement efficient workflows under multiple crisis scenarios. The SRB Chair Elke König said, "We are clearly committed to the SRB’s mission: ensuring an orderly resolution of failing banks with minimum impact on the real economy, the financial system, and the public finances of the participating member states and beyond."
Keywords: Europe, EU, Banking, Resolution Framework, MREL, LSI, Resolution Planning, Work Program, SRB
Previous ArticleFSI Paper on Supplemental Basel III Liquidity Monitoring Tools
HKMA is consulting on revisions to the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.
PRA provided further information on the application of regulatory capital and IFRS 9 requirements to payment holidays granted or extended to address the challenges arising from COVID-19 outbreak.
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
US Agencies (FDIC, FED, and OCC) published a final rule that makes technical changes to the March 31, 2020 interim final rule that provides a five-year transition period for the impact of the current expected credit loss (CECL) methodology on regulatory capital.
ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.