EBA Publishes Handbook on Valuation for Bank Resolution
EBA published a handbook on valuation for the purposes of bank resolution. The handbook is addressed to national and EU resolution authorities. It aims to foster the convergence and consistency of valuation practices as well as the interaction with independent valuers across the EU.
The handbook, which is the result of close cooperation with national resolution authorities and the Single Resolution Board (SRB), intends to bridge the resolution regulatory approach with the valuation practices, by providing concrete guidance on the practical steps of the valuation process, on the specific valuation criteria applicable to the various resolution tools and, with a view to facilitating the adoption of an informed decision by the resolution authority, by indicating the content that is expected to be included in the valuation report. While the Handbook covers both the valuation before resolution and after resolution (aimed to determine the no creditor worse off), it focuses on the valuation before resolution, thus supporting the resolution decision, which immediately impacts shareholders and creditors.
The adoption of the handbook follows the regulatory activity of EBA in the area of valuation for resolution (regulatory technical standards, or RTS, on valuation before resolution, RTS on valuation after resolution, RTS on valuation of derivative liabilities for purposes of bail-in, and RTS on independent valuers) with the view to harmonizing valuations performed across the EU to support uniform resolution practices.
Related Links
Keywords: Europe, EU, Banking, Valuations in Resolution, Resolution, BRRD, SRB, EBA
Featured Experts
Cayetano Gea-Carrasco
Offers wide-ranging expertise on capital markets, AI analytics, and software management.
Tomer Yahalom
Insurance enterprise risk researcher; credit portfolio modeling expert
Previous Article
BCBS Updates Basel III Monitoring Workbook and FAQsRelated Articles
HKMA Consults on Supervisory Policy for OTC Derivatives Transactions
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 on Regulatory Capital and IFRS 9 Requirements for Payment Holidays
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.
PRA Finalizes Policy on Supervisory Approach for Insurance SPVs
PRA published final policy (in PS13/20) setting out the approach and expectations for authorization and supervision of insurance special purpose vehicles (ISPVs or insurance SPVs).
BoE Publishes Version 2.0.1 of Capital+ XBRL Utility
BoE published version 2.0.1 of the Capital+ XBRL Utility, along with the related release notes.
HKMA on Fintech Adoption and Innovation by Banks in Hong Kong
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS on Impact of Increasing Use of Cloud Technology on Cyber Risk
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB Consults on Guide for Managing Climate and Environmental Risks
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 Issues Opinion on Revisions to CRR in Response to COVID Crisis
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA Assesses Interlinkages Between Recovery and Resolution Planning
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB Publishes Final MREL Policy Under the Banking Package
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
