Featured Product

    EBA Consults on Revised Guidelines on Recovery Plan Indicators

    March 18, 2021

    EBA proposed to revise the guidelines on recovery plan indicators, under the Bank Recovery and Resolution Directive (BRRD or Directive 2014/59/EU). To strengthen the quality of recovery indicators framework and contribute to the effective crisis preparedness of institutions, the revisions provide additional guidance on indicators’ calibration, monitoring, and breaches notifications. Most provisions of the existing guidelines remain unaltered, apart from replacing or adding a few metrics to the minimum list of recovery indicators and updating the format of the existing text to the legal template for EBA guidelines. The consultation period for the guidelines ends on June 18, 2021.

    EBA issued the existing guidelines in 2015 and is now amending these guidelines based on the practical experience acquired in recovery planning. As part of the proposed revisions, additional guidance has been provided to institutions on the general principles to follow in setting the thresholds of recovery plan indicators, focusing on the treatment of recovery indicators in crisis, particularly in case of application of supervisory relief measures. The revised guidelines clarify that, in the case of systemic crisis, there should not be automatic recalibration of recovery plan indicators due to supervisory relief measures, except in duly justified cases and unless agreed with the competent authority. The revised guidelines recognize the importance of timely notification of recovery indicators breaches and of frequent monitoring of indicators in a situation of crisis. One indicator—cost of wholesale funding—has been removed while three new recovery indicators have been added to the minimum list of recovery indicators—minimum requirements for own funds and eligible liabilities/total loss-absorbing capacity, asset encumbrance, and liquidity position. 

    The key objective of the recovery plan indicators is to help institutions monitor and respond to the emergence and evolution of stress. Thus, the revised guidelines provide a common EU standard for the recovery plan indicators to ensure they can promptly signal a stressed situation and enable an institution to consider timely and effective recovery actions. On publication of the final guidelines, the original guidelines on the minimum list of qualitative and quantitative recovery plan indicators will be repealed.

     

    Related Links

    Comment Due Date: June 18, 2021

    Keywords: Europe, EU, Banking, BRRD, Recovery Planning, MREL, TLAC, Basel, Resolution Framework, Asset Encumbrance, Liquidity Position, EBA

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7307