Featured Product

    BoE Addresses Banks in Scope of First Resolvability Assessment

    February 24, 2021

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle. The first RAF report submissions are due in October 2021. This letter, by Dave Ramsden of BoE, emphasizes the importance the regulator places on this exercise and sets out examples of good practices to assist firms in achieving the expected resolvability outcomes. The letter urges firms to focus on maintaining a "fit and ready” resolution regime, making resolution a more transparent process, being responsible for their own resolvability, and establishing effective assurance arrangements. BoE expects to engage with firms later in 2021, on the operational arrangements for the first RAF cycle.

    The RAF sets out what firms need to do to be considered resolvable by BoE. The letter highlights that BoE aims to maintain a “fit and ready” resolution regime: fit for the purpose of maintaining financial stability and market discipline and ready to be put into action to deal with the failure of one or more banks. BoE has committed to the UK Parliament that major UK banks will be resolvable by 2022. To make this happen, firms need to prepare in advance by identifying, designing, and implementing the capabilities necessary to enable the resolution process to be executed in an orderly manner. The letter also points out that a combination of firms disclosures under the RAF and public statements by BoE will reinforce existing initiatives to make the UK resolution regime more transparent and better understood. By allowing firms to demonstrate their progress through high-quality disclosures, the RAF also presents firms with a strategic opportunity to reinforce their reputation as safe and sound financial institutions. In this context, the BoE's public statement on resolvability, to be published by June 2022, will include views on individual firms.

    The letter also points out that, as set out in the RAF Statement of Policy, firms need to be able to achieve the three resolvability outcomes by January 2022: have adequate financial resources in the context of resolution, be able to continue to do business through resolution and restructuring, and be able to coordinate and communicate effectively within the firm and with the authorities and markets to ensure that resolution and subsequent restructuring are orderly. The Annex to the letter presents examples of good practices that can assist firms in designing and implementing resolvability capabilities to meet these three resolvability outcomes. Where there is any feedback on progress to date that is specific to a firm, BoE has provided this privately to firms in a second annex. Additionally, the letter emphasizes that, as set out in the RAF Statement of Policy, firms should apply their own assurance arrangements to ensure they have the necessary measures in place to support resolvability. During the first RAF cycle, BoE will particularly focus on examining how Boards and senior management have approached their responsibilities. In this context, BoE may engage with independent members of firms’ Boards in advance of the cycle to understand Boards’ anticipated approaches.


    Related Links

    Keywords: Europe, UK, Banking, Resolvability Assessment Framework, Resolution Framework, Reporting, Disclosures, BoE

    Featured Experts
    Related Articles

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699