Featured Product

    SRB Discusses Resolution Cycle and MREL Policy During Industry Dialog

    June 14, 2021

    SRB held the twelfth Industry Dialog, which brings together several stakeholders at the EU and national levels, including the national resolution authorities, EC, European Parliament, and ECB. During the event, SRB had addressed updates on resolution planning cycle (RPC) for 2021, the Single Resolution Fund, and certain aspects of minimum requirement for own funds and eligible liabilities (MREL) policy and approach to resolvability assessment. SRB has now published these presentations on its website.

    The presentation on the resolution planning cycle for 2021 highlights that this cycle aligns with the processes of external stakeholders and of all SRB banks and supports the implementation of the Banking Package and the legal requirement to review resolution plans at least annually. During the 2021 cycle, SRB and the national resolution authorities will update and enhance resolution plans for 104 banking groups under the SRB remit; they will also set binding external and internal MREL for the banks and their subsidiaries and prepare the resolvability assessment for relevant SRB banks. As the first deadline set by the SRB Expectations for Banks, institutions are expected to prepare full bail-in playbooks by the end of 2021. As set out in the Multi-annual Work Program 2021-2023, the 2021 resolution planning cycle will continue the phase-in of the Expectations for Banks to support the banks building up their capabilities in terms of resolvability. Dedicated guidance has been shared and may be updated if required to support banks in becoming compliant with the Expectations for Banks. Additionally, SRB will provide banks with further guidance on evidencing their progress on resolvability. The preparations for the 2022 resolution planning cycle have been started and the priority letters for 2022 are expected to be sent by the end of the third quarter of 2021. The priority letters will communicate bank-specific priorities, along with the common priorities for 2022, which relate to liquidity and funding in resolution, separability and reorganization plans, and information systems (focused on bail-in and valuation data).

    The presentation on the Single Resolution Fund highlights that, by June 2021, SRB expects to receive EUR 10.4 billion in the 2021 ex-ante contributions (after deductions and adjustments), after which the Single Resolution Fund will hold nearly EUR 52 billion. By December 31, 2023, the available financial means of the Single Resolution Fund shall reach at least 1 % of the amount of covered deposits of all credit institutions authorized in all of the participating member states. SRB notes that it provided institutions with a possibility to review the preliminary 2021 decision on ex-ante calculation before its adoption and to comment on key aspects of the calculation exercise. This was seen by the institutions as a positive step to provide more transparency in the ex-ante decision-making process. The presentation notes that the timeline and key steps for the next cycle will be communicated in October, along with the data reporting form and guidance. SRB will keep excel reporting in place until the 2022 cycle. The presentation also offers an update on the common backstop to the Single Resolution Fund, highlighting that collateral is required if the common backstop is used for liquidity purposes and that loan collateralization will enhance the SRB repayment capacity. 

    The presentation on the MREL policy covers the MREL targets, impact of COVID-19 on cost of funding and issuance, the MREL Maximum Distributable Amount (M-MDA) regime, the SRB Permission regime to reduce eligible liabilities, data to be reported to SRB in 2021, and the outlook for next resolution planning cycles. SRB collects quarterly data on MREL and total loss-absorbing capacity (TLAC) issuance and outstanding stock, to monitor the build-up of MREL at banks. For the reference date of the first quarter of 2021, the reporting deadline is June 30, 2021 under the revised Bank Recovery and Resolution Directive (BRRD2) framework. For the reference date of the second quarter of 2021, the reporting deadline is September 30, 2021 for the templates in XBRL format, in line with the EBA implementing technical standards on MREL/TLAC Reporting, and for the additional Excel-based templates on quarterly MREL issuances and forecasts. SRB will continue to work on the MREL policy by assessing the possibility to reflect more elements in the "no creditor worse off" methodology, enhancing the MREL policy for the transfer strategies, and revising the MREL policy once new EBA regulatory technical standards are endorsed. The presentation also covers the SRB approach to resolvability assessment, outlines the focus areas for the 2021 resolution planning cycle, and presents the resolvability heatmap, which classifies banks according to the progress made on each resolvability condition and the impact of each condition on the feasibility of the resolution strategy. 

     

    Related Links

    Keywords: Europe, EU, Banking, MREL, MREL Policy, Resolution Planning, Industry Dialog, Resolution Framework, Single Resolution Fund, Common Backstop, Reporting, TLAC, BRRD2, SRB

    Featured Experts
    Related Articles
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies

    The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)

    September 13, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514