Featured Product

    Boštjan Jazbec of SRB on Upcoming Resolution Reporting Requirements

    October 22, 2019

    Boštjan Jazbec of SRB spoke in Munich about the data information system requirements from a resolution perspective. He briefly explained how SRB and the resolution regime fit into the regulatory framework. Then, he described SRB requirements in terms of data reporting and what has bee achieved so far. Next, he focused on the ongoing work at SRB and the resulting data requirements, before looking at what is ahead in the coming months. He also informed that the EBA technical standards of uniform reporting templates, under the revised Bank Recovery and Resolution Directive (BRRD 2), are expected to be finalized by mid-2020.

    Mr. Jazbec explained that bank supervisors look at banks from a going-concern perspective whereas resolution authorities focus on the gone-concern perspective. In this context, he discussed the Liability Data Report,the resolution planning template, and the standardized template related to the identification of critical functions. Currently, the focus is on the reporting of standard resolution templates on a year-end basis. In the future, however, banks will be required to ensure their capability to provide these data on request. Thus, banks have to further adjust their data information systems. 

    In terms of the ongoing SRB work and the resultant data reporting requirements, the first major element is the recent revision of the legal framework of the EU resolution regime by law makers. This banking package will trigger substantial changes of the SRB reporting needs and will, therefore, have an impact on data system requirements. BRRD 2 will introduce new reporting requirements, for which EBA is developing technical standards on uniform reporting templates. EBA is expected to finalize these standards by mid-2020. SRB, however, needs to bridge the gap in the transitional period to facilitate a timely and effective transition toward the application of the new reporting framework. Therefore, SRB will frontload the future EBA implementing technical standards templates by launching a new data collection exercise in the transitional period. For instance, SRB will request additional data on loss-absorbing capacity and on internal minimum requirement for own funds and eligible liabilities (MREL), for example, to set the intermediate MREL targets. Thus, 2020 will see a further development of regulatory standards, implementing acts and the preparation by SRB, the national resolution authorities, and the banks under its remit for the application of the new rules. 

    The second major element that will impact SRB work is the decision to move from the two-stage resolution planning process 2018/19 to a new steady-state process. In 2020, SRB will re-align all banks under its remit to a uniform twelve-month resolution planning cycle. This new cycle will start in April, with banks‘ regular data reporting based on 2019 year-end data, and finish in March of the following year, with the approval of the resolution plan, including MREL decisions, followed by communication to the banks. This was necessary to take into account the new legal framework from 2020 with respect to the aim to ensure “fully-fledged resolution plans” and MREL decisions. The full operationalization of the SRB resolution strategies requires continuous improvements of bank data systems. To frame this process, SRB has defined a general approach that will guide banks in the right direction. For the 2020 resolution planning cycle, the phasing-in foresees three operational priorities for all SRB banks. These are:

    • Operationalization of the bail-in tool
    • Ensuring operational continuity in resolution
    • Maintaining access to financial market infrastructures and their intermediaries ahead of, and during, resolution.

    In the coming weeks, SRB will communicate further information on these three priorities. Based on that and the general expectations, banks will have to start their work and adjust their IT systems. For the operationalization of bank-individual resolution strategies, SRB will not rely on standardized templates. SRB will only communicate the general expectations and operational objectives that the data information systems have to fulfill. At the end of this year, SRB expects the first draft bail-in playbooks from all SRB banks and it will continue this work in 2020. At a later stage, SRB will request banks to perform dry runs on bail-in implementation to test, in particular, the readiness of data information systems of banks. The example “Bail-in Playbook“ should provide some background as to why SRB has chosen the above-described approach. In the end, only banks can ensure resolvability while the resolution authorities can only set the framework and evaluate whether there are substantive impediments to resolution that have to be removed. Mr. Jazbec concluded that, for good-quality resolution decisions, instant availability of up-to-date, reliable data is a necessity.  

     

    Related Link: Speech

    Keywords: Europe, EU, Banking, Reporting, Implementing Technical Standards, Resolution Framework, Resolution Planning, MREL, Data Collection, SRB

    Featured Experts
    Related Articles
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance for New Prudential Standard on Remuneration

    The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.

    October 18, 2021 WebPage Regulatory News
    News

    OCC Updated LIBOR Self-Assessment Tool for Banks

    The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).

    October 18, 2021 WebPage Regulatory News
    News

    TCFD Updates Guidance for Financial Disclosures on Climate Risk

    The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

    October 14, 2021 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.

    October 14, 2021 WebPage Regulatory News
    News

    ACPR Implements Updates Related to DPM Version 3.1

    The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.

    October 14, 2021 WebPage Regulatory News
    News

    EBA Note Examines Transition Risks of Benchmark Rates

    The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.

    October 14, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7571