EBA Consults on Guidelines to Improve Bank Resolvability
EBA proposed the guidelines on improving resolvability of banks. These guidelines set out the resolvability requirements for institutions or resolution groups for which the strategy involves the use of resolution powers as opposed to a liquidation procedure. The bulk of the guidelines are addressed to institutions, though some requirements also target the resolution authorities as they need to assist institutions in improving resolvability. The comment period for the proposed guidelines ends on June 17, 2021, with the final guidelines being aimed for publication by the first half of 2021. EBA stipulates that institutions and authorities in scope of these guidelines should comply in full by January 01, 2024.
The guidelines aim to implement existing international standards on resolvability and take stock of the best practices developed by EU resolution authorities on resolvability topics. The guidelines set out requirements to improve resolvability in the areas of operational continuity in resolution, access to financial market infrastructures, funding and liquidity in resolution, bail-in execution, business reorganization, and communication. However, they do not cover all topics relevant to resolvability either because those topics are covered elsewhere (for example, the calibration and eligibility of loss absorbing capacity is extensively covered in BRRD Directive) or because those topics will be further specified in future EBA regulatory products (for example, transferability). Certain requirements laid down in these guidelines may be resolution-tool-specific (for example, bail-in playbook) and the extent of their application to other resolution tools is left to the discretion of the resolution authority. To ensure proportionality, these guidelines are not mandatorily applicable for institutions, groups, or resolution groups that benefit from the simplified obligation regime, for which the extent of their possible application is left to the discretion of the relevant resolution authorities. These guidelines will be updated on a regular basis as progress is achieved on relevant policy topics, both at international and EU levels.
Related Links
Comment Due Date: June 17, 2021
Keywords: Europe, EU, Banking, Resolution Planning, BRRD, Proportionality, Bail-In, Resolution Framework, MREL, EBA
Previous Article
CFTC Sets Up Climate Risk Unit to Accelerate Engagement in ESG SpaceRelated Articles
CFPB Finalizes Rule on Small Business Lending Data Collection
The Consumer Financial Protection Bureau (CFPB) published a final rule that sets out data collection requirements on small business lending, under section 1071 of the Dodd-Frank Act.
BCBS to Consult on Pillar 3 Climate Risk Disclosures by End of 2023
The Bank for International Settlements (BIS) published a summary of the recent Basel Committee (BCBS) meetings.
FINMA Approves Merger of Credit Suisse and UBS
The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
US Congress Report Examines Data Privacy and Cybersecurity Regulations
The U.S. Congressional Research Service published a report on banking, data privacy, and cybersecurity regulation.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
EU to Conduct One-Off Scenario Analysis to Assess Transition Risk
The European authorities recently made multiple announcements that impact the banking sector.
APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
