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    SRB Publishes Annual Report and Guidance on Bail-In Playbooks

    July 05, 2021

    SRB announced that banks have paid EUR 10.4 billion into the Single Resolution Fund (SRF) for 2021. SRF is made up of contributions from over 3,000 credit institutions and investment firms in the 21 Banking Union countries. SRB also published is annual report, which details work done in 2020 and outlines the scope of future activities. The annual report notes that SRB is on track for the 2024 target of having reached operational resolvability and having Minimum Requirement for own funds and Eligible Liabilities (MREL) fully built up. SRB also published a new set of guidance documents on the implementation of the bail-in tool by banks. The documents include operational guidance on bail-in playbooks and instructions for bail-in data sets, which are accompanied by an explanatory note and a set of questions and answers (Q&A).

    The documents on bail-in guidance are not a new set of SRB policies, but they constitute a guide to help banks ensure the required preparation for bail-in application during the resolution planning phase and to fulfil the SRB Expectations for Banks, which is to ensure resolvability. The operational guidance on bail-in playbooks compiles the main elements that banks are expected to consider for developing their bail-in playbooks, to enable the timely and effective execution of the write-down and conversion of capital instruments and eligible liabilities pursuant to Article 21 of the Single Resolution Mechanism Regulation (SRMR or Regulation 806/20141) and the execution of the bail-in tool in resolution. In a crisis, depending on the specific situation and in line with the applicable legal framework, SRB reserves the right to deviate from actions and expectations of this publication, which is also subject to further revisions, including due to changes in the applicable EU legislation. The operational guidance document outlines the SRB expectations on the content of the playbook and its assessment both on internal and external execution of the bail-in tool. The bail-in playbook is an operational document owned by the bank is expected to address all internal and external actions that must be undertaken by or on behalf of the banks to effectively apply the bail-in tool.

    The explanatory note accompanying the operational guidance on bail-in playbooks aims to provide explanation with respect to the data required for the application of the bail-in tool. . It specifies, among others, the minimum expectations concerning liability data that a bank under resolution should provide to resolution authorities in an accurate and timely manner. It also elaborates on the required level of data quality and further considerations that need to be taken into account to ensure sufficient legal certainty while implementing the bail-in tool. The explanatory note includes information concerning the predefined set of bail-in data defined in the document “SRB Bail-in Data Set – Instructions” and should be read in conjunction with related SRB publications on bail-in implementation, such as the Operational Guidance on bail-in playbooks.

     

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    Keywords: Europe, EU, Banking, SRF, Annual Report, Bail In, Resolution Planning, Banking Union, Bail-In Playbook, MREL, Resolution Framework, SRB

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