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    SRB Consults on Expectations from Banks to Demonstrate Resolvability

    October 23, 2019

    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. 

     

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    Comment Due Date: December 04, 2019

    Keywords: Europe, EU, Banking, Resolution, Resolvability, Resolution Planning, Banking Union, Proportionality, Governance, SRB

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