EBA Guides on Assessment of MIS of Firms for Valuation in Resolution
EBA published information on how resolution authorities should assess management information systems of institutions, in context of the resolvability assessment. The intent of this assessment is to ensure that data and information are swiftly provided to support a robust valuation for resolution (valuation MIS). This information (chapter) is a part of the EBA handbook on valuation for purposes of resolution and aims to enhance institutions’ preparedness in business as usual to support a timely and robust valuation in case of resolution.
The EBA approach to valuation MIS embeds the proportionality principle since it relies, as far as possible, on the institutions’ internal capabilities, intended as a combination of internal data aggregation capabilities and internal valuation models that are suitable for the valuation for resolution. The valuation MIS approach is complemented by a data dictionary for benchmarking purposes, which does not introduce any reporting obligation and is expected to be used by institutions to perform a self-assessment of the internally available data and information. The results of the self-assessment will form the basis of a dialog between the institution and the resolution authorities in the context of the materiality of on‐and off‐balance‐sheet positions and the resolvability assessment, to calibrate the valuation MIS requirements; this takes into account the internal valuation models suitable for the valuation for resolution, the size, complexity, and business model of the institution.
If expectations of resolution authorities about the data and information needed to support a robust valuation are not met by an institution, the authority should consider requiring that the institution carries out actions proportionate to the nature and materiality of the failure to meet such expectations to ensure the feasibility and credibility of the resolvability of an institution. The resolution authorities should determine a timeline within which institutions should be expected to complete the development of the Valuation MIS. This timeline should take into account resolution planning needs aimed at ensuring the credibility and feasibility of the resolution strategy and operationalization requirements of institutions.
The information is addressed to the resolution authorities, with a view to strengthening the convergence of resolution practices across EU to ensure a level playing field. It not only sets out EU best practices and high-quality methodologies and processes but also supports the resolution authorities in their interaction with the institutions destined for resolution for the purposes of the development or adjustment of the Valuation MIS.
Related Links
- Press Release
- Chapter on Valuation MIS (PDF)
- Data Dictionary (XLSX)
- Note on Use of Data Dictionary (PDF)
- Combination Information and Data with Valuation Approaches (XLSX)
Keywords: Europe, EU, Banking, Resolvability Assessment, Proportionality, Resolution Framework, EBA Handbook, Valuation of MIS, Resolution Plannning, EBA
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