SRB launched a consultation that sets out the capabilities banks are expected to demonstrate to show that they are resolvable. The Expectations for Banks document outlines best practices on key aspects of resolvability. The Expectations are structured along seven dimensions: governance, loss absorption and recapitalization capacity, liquidity and funding in resolution, operational continuity and access to Financial Market Infrastructures, information systems and data requirements, communication, and separability and restructuring. In addition, the business model, structure, and complexity or other areas might have to be addressed to achieve resolvability of a bank. Comment period on the consultation ends on December 04, 2019.
The document sets out the SRB expectations for banks in the resolution planning phase, to demonstrate that they are resolvable and prepared for crisis management. It is a guidance on the actions that banks, under the SRB remit, should undertake to ensure an appropriate level of resolvability. The expectations represent a common approach to ensure consistency and a level playing field within the Banking Union. While the expectations are general in nature, their application to each bank will have to be tailored, taking into account proportionality principles based on a dialog between each bank and its Internal Resolution Team. The result will feed into the annual resolution work programs for banks.
The expectations are not exhaustive and do not prejudge the content of further SRB communications related to resolvability requirements for banks. In this context, Internal Resolution Teams may go beyond what is described in the Expectations by requesting additional information and analyses on specific topics in the resolution planning cycle that are relevant to progress in resolution planning and to improve the resolvability of the respective bank. Taking proportionality into account when applying the expectations, Internal Resolution Teams might also deviate from some of the expectations, provided this is considered appropriate and proportionate in light of the bank-specific characteristics. Banks are expected to work toward resolvability by applying the principles set out in this document as of the date of its publication.
Comment Due Date: December 04, 2019
Keywords: Europe, EU, Banking, Resolution, Resolvability, Resolution Planning, Banking Union, Proportionality, Governance, SRB
Previous ArticleHKMA Publishes Update on Reform of Interest Rate Benchmarks
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).
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.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
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.
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.
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.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.