BaFin Issues Circular on Minimum Requirements for Implementing Bail-In

The circular is addressed to all institutions under the responsibility of BaFin as national resolution authority, provided that BaFin has informed the institutions in the context of resolution planning that the requirements have to be compiled with. The circular was submitted for consultation from February to March 2019. In the context of resolution planning, the resolution authority must examine the resolvability of institutions and groups, improve resolvability, and remove impediments to resolvability, if necessary. This includes examining whether a selected resolution strategy is feasible and whether there are potential grounds for refusal. Among other things, it must be examined whether

• Management information systems are able to provide the information that is essential for effective implementation of the institution at any time, even under the rapidly changing conditions
• An institution is able to provide the information necessary to determine the amount of the required write-down and/or recapitalization

The circular also supplements the information requirements of the Liability Data Reporting (LDR) of BaFin but does not replace them. Information for BaFin LDR template and the processes for preparation of this template can be used as a basis. However, information from the BaFin LDR template must be supplemented, first, because not all the necessary information relevant to decision-making with regard to WDCCI power and bail-in tool is taken into account. Second, in contrast to the BaFin LDR template, the bail-in information must be provided ad hoc and at short notice.

Related Links

• Press Release
• Circular 05/2019

Keywords: Europe, Germany, Banking, Minimum Requirements, Bail-In, Resolution Planning, Reporting, BaFin