The Single Resolution Board (SRB) published the operational guidance on the identification and mobilization of collateral in resolution, set out its approach to minimum requirement of own funds and eligible liabilities (MREL) calibration, announced the intent to consult on the 2022 ex-ante contributions to the Single Resolution Fund (SRF), and adopted the resolution decisions for Slovenian and Croatian subsidiaries of Sberbank Europe AG.
Below are key highlights of the aforementioned developments:
- The operational guidance on identification and mobilization of collateral in resolution is structured around three objectives. One objective is to ensure that collateral governance and management of banks is able to support the resolution scheme. The other two objectives are to ensure that banks have capacity to identify collateral, including its amount, location, governing law, currency, and overall availability, and to assess banks’ capacity to mobilize collateral. The guidance offers a clear understanding of the operational and legal requirements that banks need to anticipate to maximize the amount of assets that could be mobilized as collateral, in and after resolution.
- SRB announced that the final MREL targets will be re-calibrated in the 2022 resolution planning cycle based on the leverage amount, including the central bank exposures temporarily excluded on the basis of the relief measure, to ensure adjustment of the MREL before the compliance date of January 01, 2024. In the meantime, SRB will compute, where relevant, notional final MREL targets based on institutions’ leverage amount, including the central bank exposures. SRB will communicate these notional targets to institutions affected by the relief measure in the context of the 2021 resolution planning cycle and will use them to monitor the institutions’ build-up of MREL resources towards the final MREL targets.
- SRB announced consultation on the 2022 Single Resolution Fund contributions, until March 17, 2022. Nearly 3,000 banks and other financial institutions, across the 21 European Union countries that make up the Banking Union, will contribute to the Single Resolution Fund in 2022. SRF, which is an emergency fund to support bank resolution, is being built up over eight years between 2016 and 2023. SRB has published reporting information such as the taxonomy, reporting form, validation and filing rules, and XBRL instance. In the 2022 ex-ante contributions cycle, the national resolution authorities can provide the data of the institutions to SRB in either XBRL or Excel formats. The resolution authorities can require the institutions to submit their data in any of these formats, provided that they make the templates available to the institutions in the corresponding format. In April 2022, the final decision on the calculation of the 2022 ex-ante contributions will be adopted by SRB and communicated to the national resolution authorities. By May 01, 2022, the institutions will be notified by their respective authorities about adoption of the final decision determining the 2022 ex-ante contributions and will be invited to pay their individual ex-ante contributions.
- SRB adopted resolution decisions for Slovenian and Croatian subsidiaries of Sberbank Europe AG and decided no resolution action is required for parent company in Austria. The European Commission has endorsed the two resolution decisions and all three of the decisions will be implemented by the national resolution authorities, the Austrian Financial Market Authority, the Croatian National Bank, and the Bank of Slovenia. SRB found that there was a public interest in resolving the two subsidiaries to protect financial stability and avoid disruption to the Croatian and Slovenian economies. In the case of the Austrian parent, the bank was not considered to provide critical functions to the economy and that winding it up under normal insolvency proceedings would not have a negative impact on financial stability or the economy in Austria.
- Guidance on Collateral in Resolution
- Approach to MREL Calibration
- Consultation on SRF Contributions
- Ex-Ante Contributions Data Collection
- Resolution of Sberbank Europe AG
Keywords: Europe, EU, Banking, Single Resolution Fund, SRF, Banking Union, Resolution Framework, CRR, MREL, Basel, Covid-19, Leverage Ratio, Reporting, Regulatory Capital, SRB, Subheadline
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