BNM Consults on Recovery and Resolution Planning Framework
BNM issued exposure draft on the recovery and resolution planning framework for financial institutions. To facilitate a systematic approach for financial institutions to conduct assessments or provide material information within the recovery planning process, the policy document is accompanied by a set of reporting templates listed in Appendix 1. As per the proposal, a financial institution shall submit its first recovery plan within 12 months from the date it receives a request from BNM. The comment period for this draft ends on March 31, 2020.
The recovery and resolution planning framework seeks to put in place an effective and efficient process to enhance supervisability, recoverability, and resolvability of financial institutions. The framework will incorporate the essential elements of the FSB's "Key Attributes of Effective Resolution Regime for Financial Institutions" into the domestic regulatory, supervisory, and resolution regimes. Under the proposed framework, each financial institution will be required to identify and plan for the execution of a suite of recovery options to restore its long-term viability under a range of idiosyncratic and system-wide stress events. For the purpose of this draft, a financial institution refers to a banking institution and financial holding company, wherein a banking institution refers to a licensed bank, a licensed Islamic bank, and/or a licensed investment bank. The requirements set out in this proposed policy document shall apply to financial institutions on a consolidated basis. For the purpose of this proposed policy document, this shall include the global operations of the financial institution and all its financial and non-financial subsidiaries, including insurance and/or takaful subsidiaries.
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Keywords: Asia Pacific, Malaysia, Banking, Recovery Planning, Recovery and Resolution Framework, Reporting, BNM
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