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    NBB Maintains CCyB at 0%, Issues Guidelines on Recovery Plans

    March 30, 2022

    The National Bank of Belgium (NBB) published guidelines on simplified obligations for recovery plans and guidelines on drafting recovery plans for credit institutions. The regulator also decided to maintain the countercyclical buffer rate (CCyB) at 0% for the second quarter of 2022.

    The guidelines on simplified obligations for recovery plans set out the requirements for the recovery plans to be drafted by credit institutions that have been designated as qualifying for simplified recovery plan obligations. Credit institutions that qualify for simplified recovery plan obligations are expected to develop a recovery plan that is appropriate for the their size, business model, complexity, and shareholding structure. Simplified recovery plans should include a brief summary of the plan and of the institution’s own assessment of its overall recovery capacity as well as a description of the institution’s key vulnerabilities and of relevant scenarios that could severely impact the institution. Such plans should also include a description of recovery options that could be used to address an extreme solvency or liquidity shock and information regarding activation of the recovery plan.

    The guidelines on drafting recovery plans are intended to be a user-friendly tool to guide both credit institutions and parent undertakings in drafting recovery plans, in accordance with the requirements of the Bank Recovery and Resolution Directive (BRRD), the final draft Regulatory Technical Standards of the European Banking Authority (EBA) on the content of recovery plans, the EBA guidelines on the range of scenarios to be used in recovery plans and recovery plan indicators, and the EBA recommendation on the coverage of entities in a group recovery plan. The guidelines highlight that recovery plans contain five modules: summary of the recovery plan, governance, strategic analysis, communication and disclosure plan, and preparatory measures. NBB notes that recovery plan is a strategic document with highly sensitive content. Throughout the process, the recovery plan remains the institution’s property and should only be transmitted to NBB for assessment.

     

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    Keywords: Europe, Belgium, Banking, Regulatory Capital, Basel, Resolution Framework, BRRD, Governance, Guidelines, CCyB, Recovery Planning, NBB

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