EBA Consults on Guidelines to Improve Bank Resolvability
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.
Related Links
Comment Due Date: June 17, 2021
Keywords: Europe, EU, Banking, Resolution Planning, BRRD, Proportionality, Bail-In, Resolution Framework, MREL, EBA
Previous Article
CFTC Sets Up Climate Risk Unit to Accelerate Engagement in ESG SpaceRelated Articles
EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR
The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).
OSFI Issues Results of Pilot on Climate Risk Scenario Analysis
The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.
ECB Issues Opinions on Green Bonds Standard and CRR Proposals
The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.
ESRB Explores Policy Response to Risks Arising from Digitalization
The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.
EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues
The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice.
FI Publishes Multiple Regulatory and Reporting Updates
The Swedish Financial Supervisory Authority (FI) announced that the capital adequacy reporting as at December 31, 2021 must be done by February 11, 2022.
BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance
The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.
US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
EBA Issues Guide on Bank Resolvability, Consults on Transferability
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
