EBA Assesses Interlinkages Between Recovery and Resolution Planning
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD). The comparative analysis of recovery and resolution plans by EBA indicates that further work is needed in this area to study the impact of resolution plans on recovery planning and develop further guidance on certain aspects of the interlinkage.
The report outlines the observations of EBA from its first comparative analysis of recovery and resolution plans and identifies best practices and areas where further improvement and/or clarifications are needed. In addition, on certain common elements between both types of plans, such as critical functions and access to central bank facilities, the report clarifies their specific purpose in each planning phase and the advantages or disadvantages of a potential convergence or harmonization. Finally, the report analyzes the potential impact of recovery options on the resolvability of an institution and introduces an assessment framework to support the assessment and consultation process between resolution and competent authorities. Annex 1 to the report includes a template used to perform comparative analysis of a sample of recovery and resolution plans while Annex 2 presents a practical tool to help resolution authorities in conducting the analyses of the potential impact of recovery options on the resolvability of an institution.
The assessment in this report is intended to enhance synergies between recovery and resolution planning phases and ensure consistency in their potential implementation. The findings of the comparative analysis of recovery and resolution plans reveal that further work is needed in this area. Therefore, EBA plans to perform further work on the impact of resolution plans—particularly the impact of measures to remove impediments to resolvability—on ongoing supervision and recovery planning. The guidance work on certain practical aspects of interlinkage, such as on the timelines of recovery and resolution planning cycles, will also be undertaken, as such work is deemed useful for enhancing interactions among competent authorities and the resolution authorities.
Related Links
Keywords: Europe, EU, Banking, Recovery Planning, Resolution Planning, BRRD, Systemic Risk, Comparative Analysis, Resolution Framework, EBA
Featured Experts
Blake Coules
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Previous Article
QCB Announces Measures to Address Impact of COVID-19 OutbreakRelated Articles
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
EC Mandates ESAs to Propose Amendments to SFDR Technical Standards
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
EBA Examines Supervisory Practices, Issues Deposits Reporting Template
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
US Agency Publications Address Basel, Reporting, and CECL Developments
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
SEC Extends Comment Period on Climate Risk Disclosures
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
APRA Reduces Committed Liquidity Facility, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
EBA Updates Standards for 2023 Benchmarking of Internal Approaches
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
EIOPA Responds to Stakeholder Views on Blockchain in Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.
