SRB Approach to Public Interest Assessment Under Resolution Framework
SRB published a paper that outlines its approach to the public interest assessment under the resolution framework in EU. The public interest assessment examines whether the resolution of a particular bank that is failing or likely to fail would be necessary, for example, to ensure one or more of objectives of resolution. The objectives of a resolution are to maintain financial stability, protect covered depositors, and safeguard public funds by minimizing reliance on extraordinary public financial support. If resolution is not deemed necessary, resolution actions would not be taken and national insolvency procedures would apply.
The published document offers clarity about the factors that SRB takes into account when conducting a public interest assessment and explains how SRB applies the criteria set out in EU law. When SRB considers whether to plan for or to take resolution action—both at the resolution planning stage and after a failing or likely to fail declaration—it performs a public interest assessment. The conclusion of public interest assessment drives the decision on whether resolution is to be considered as the preferred option in resolution planning. The approach was developed by SRB and national resolution authorities, in consultation with ECB and EBA, to ensure a common understanding across the Banking Union. It is one of the key policies underpinning the work of SRB.
Related Links
Keywords: Europe, EU, Banking, Resolution Framework, Public Interest Assessment, Resolution Action, Banking Union, ECB, EBA, SRB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Dieter Van der Stock
IFRS subject matter expert; LDTI subject matter expert; accounting authority; risk management specialist
Related Articles
EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
FSB Sets Out Work Priorities for 2021
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU Publishes Corrigendum to Revised Capital Requirements Regulation
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs Issue Statement on Application of Sustainability Disclosures Rule
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC Consults on Crisis Management and Deposit Insurance Frameworks
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Addresses Banks in Scope of First Resolvability Assessment
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.
