EBA proposed the guidelines on improving resolvability of banks. These guidelines set out the resolvability requirements for institutions or resolution groups for which the strategy involves the use of resolution powers as opposed to a liquidation procedure. The bulk of the guidelines are addressed to institutions, though some requirements also target the resolution authorities as they need to assist institutions in improving resolvability. The comment period for the proposed guidelines ends on June 17, 2021, with the final guidelines being aimed for publication by the first half of 2021. EBA stipulates that institutions and authorities in scope of these guidelines should comply in full by January 01, 2024.
The guidelines aim to implement existing international standards on resolvability and take stock of the best practices developed by EU resolution authorities on resolvability topics. The guidelines set out requirements to improve resolvability in the areas of operational continuity in resolution, access to financial market infrastructures, funding and liquidity in resolution, bail-in execution, business reorganization, and communication. However, they do not cover all topics relevant to resolvability either because those topics are covered elsewhere (for example, the calibration and eligibility of loss absorbing capacity is extensively covered in BRRD Directive) or because those topics will be further specified in future EBA regulatory products (for example, transferability). Certain requirements laid down in these guidelines may be resolution-tool-specific (for example, bail-in playbook) and the extent of their application to other resolution tools is left to the discretion of the resolution authority. To ensure proportionality, these guidelines are not mandatorily applicable for institutions, groups, or resolution groups that benefit from the simplified obligation regime, for which the extent of their possible application is left to the discretion of the relevant resolution authorities. These guidelines will be updated on a regular basis as progress is achieved on relevant policy topics, both at international and EU levels.
Comment Due Date: June 17, 2021
Keywords: Europe, EU, Banking, Resolution Planning, BRRD, Proportionality, Bail-In, Resolution Framework, MREL, EBA
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.