EC Approves Prolongation of Polish Resolution Scheme for Small Banks
EC approved the prolongation of the Polish resolution scheme for six months. The measure will continue to be available for cooperative banks and small commercial banks with total assets below EUR 3 billion, only if they are found to be in distress by the competent national authorities. The scheme, which was initially approved in December 2016, is intended to facilitate the work of the Polish resolution authorities, if needed.
In cases where a small bank is in serious difficulties, this type of scheme allows the prior authorization of aid, enabling the national authorities to carry out an orderly resolution of that bank. The scheme has been prolonged twice before, with the last prolongation being August 2018. This third prolongation also includes the possibility for the State to grant liquidity aid in resolution under certain conditions. EC found the prolongation of the scheme to be in line with the EU State aid rules, in particular the 2013 Banking Communication and EU banking rules. In July 2013, EC had adapted its temporary state aid rules for assessing public support to financial institutions during the crisis. The main changes were aimed to improve the restructuring process and the level playing field between banks. In principle, a bank needs to work out a restructuring plan, including a capital raising plan, convincingly demonstrating how it will become profitable in the long term before it can receive recapitalization measures. If the viability of the bank cannot be restored, an orderly winding down plan needs to be submitted instead.
Related Links
Keywords: Europe, EU, Poland, Banking, Resolution Scheme, Resolution Planning, Crisis Management Framework, Orderly Resolution, EC
Previous Article
CFTC Extends Comment Period for a Proposal on Swap Data ReportingRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
BIS Bulletins Discuss DeFi Lending and Aspects of Crypto-Assets
The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
