BaFin Updates Bail-in Requirements and FAQ on COVID Measures
BaFin recently updated the frequently asked questions(FAQ) on COVID-19 measures for credit risk. In addition, post a consultation, BaFin finalized the enhanced version of a circular on the minimum requirements for information systems for the feasibility of a bail-in. This circular replaces Circular 05/2019 (A) on minimum requirements for the feasibility of a bail-in, which was published in July 2019. The circular is aimed at all institutions under the direct responsibility of BaFin as the national resolution authority, for which no insolvency scenario has been defined as a resolution strategy.
BaFin had published the original circular on the minimum requirements for the feasibility of a bail-in on July 04, 2019. The consultation on the changes that had been proposed in this circular closed on December 16, 2020. The Circular addresses requirements for the management information systems of the concerned institutions. The requirements are intended to ensure provision of the information necessary for an effective and efficient implementation of the resolution instruments. The revised version of the circular also includes requirements for the technical and organizational equipment to ensure that the information can be provided within 24 hours of being requested by the resolution authority. Minimum requirements for the feasibility of a bail-in have been expanded in certain other areas too. The main extensions relate to additional data points for the further development of the external bail-in implementation, the extension to all bail-in-capable liabilities (taking into account the principle of proportionality), and the inclusion of a catalog of frequently asked questions.
Related Links (in German)
Keywords: Europe, Germany, Banking, FAQ, Credit Risk, Bail In, Resolution Planning, Basel, COVID-19, Resolution Framework, BaFin
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