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.
Keywords: Europe, EU, Poland, Banking, Resolution Scheme, Resolution Planning, Crisis Management Framework, Orderly Resolution, EC
Previous ArticleCFTC Extends Comment Period for a Proposal on Swap Data Reporting
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.