Featured Product

    EBA Consults on Revised Guidelines on Recovery Plan Indicators

    March 18, 2021

    EBA proposed to revise the guidelines on recovery plan indicators, under the Bank Recovery and Resolution Directive (BRRD or Directive 2014/59/EU). To strengthen the quality of recovery indicators framework and contribute to the effective crisis preparedness of institutions, the revisions provide additional guidance on indicators’ calibration, monitoring, and breaches notifications. Most provisions of the existing guidelines remain unaltered, apart from replacing or adding a few metrics to the minimum list of recovery indicators and updating the format of the existing text to the legal template for EBA guidelines. The consultation period for the guidelines ends on June 18, 2021.

    EBA issued the existing guidelines in 2015 and is now amending these guidelines based on the practical experience acquired in recovery planning. As part of the proposed revisions, additional guidance has been provided to institutions on the general principles to follow in setting the thresholds of recovery plan indicators, focusing on the treatment of recovery indicators in crisis, particularly in case of application of supervisory relief measures. The revised guidelines clarify that, in the case of systemic crisis, there should not be automatic recalibration of recovery plan indicators due to supervisory relief measures, except in duly justified cases and unless agreed with the competent authority. The revised guidelines recognize the importance of timely notification of recovery indicators breaches and of frequent monitoring of indicators in a situation of crisis. One indicator—cost of wholesale funding—has been removed while three new recovery indicators have been added to the minimum list of recovery indicators—minimum requirements for own funds and eligible liabilities/total loss-absorbing capacity, asset encumbrance, and liquidity position. 

    The key objective of the recovery plan indicators is to help institutions monitor and respond to the emergence and evolution of stress. Thus, the revised guidelines provide a common EU standard for the recovery plan indicators to ensure they can promptly signal a stressed situation and enable an institution to consider timely and effective recovery actions. On publication of the final guidelines, the original guidelines on the minimum list of qualitative and quantitative recovery plan indicators will be repealed.


    Related Links

    Comment Due Date: June 18, 2021

    Keywords: Europe, EU, Banking, BRRD, Recovery Planning, MREL, TLAC, Basel, Resolution Framework, Asset Encumbrance, Liquidity Position, EBA

    Featured Experts
    Related Articles

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News

    EBA Examines Remuneration Data and Use of Large Exposure Exemptions

    The European Banking Authority (EBA) published a report that examines the use of certain exemptions included in the large exposures regime under the Capital Requirements Regulation (CRR).

    July 22, 2022 WebPage Regulatory News

    BoE Issues Update on Ongoing Data Transformation Program

    The Bank of England (BoE) issued a communication to firms to provide an update on the progress of the joint data transformation program—which is being led by BoE, the Financial Conduct Authority (FCA), and the industry—for the financial sector in UK.

    July 21, 2022 WebPage Regulatory News

    EBA Issues Draft Methodology and Templates for 2023 Stress Tests

    The European Banking Authority (EBA) published the draft methodology, templates, and template guidance for the European Union-wide stress test in 2023.

    July 21, 2022 WebPage Regulatory News

    EBA Issues SREP Guidelines and Standards for Investment Firms

    The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) jointly published the final guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) for investment firms.

    July 21, 2022 WebPage Regulatory News

    BoE and PRA Publish Regulatory Updates for Financial Sector Entities

    The Prudential Regulatory Authority (PRA) proposed expectations, via CP8/22, in respect of changes to the instruments or claims that comprise unvested deferred sums awarded to material risk-takers as part of their variable pay.

    July 19, 2022 WebPage Regulatory News

    EIOPA Issues Taxonomy for Solvency II Reporting, Issues Other Updates

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.7.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 16, 2022 WebPage Regulatory News

    OSFI Updates Address BCAR Reporting, Basel Reforms, and Cyber Risk

    The Office of the Superintendent of Financial Institutions (OSFI) updated the 2023 Basel Capital Adequacy Reporting (BCAR) manual as well as the 2023 BCAR return.

    July 15, 2022 WebPage Regulatory News

    FSB Report Outlines Progress on Climate Risk Roadmap

    In a letter to the G20 Leaders, ahead of the July 2022 meeting, the Financial Stability Board (FSB) Chair set out an overview of the key work done by FSB.

    July 14, 2022 WebPage Regulatory News

    SRB Issues Resolvability Assessment and Bail-in Implementation Guide

    The Single Resolution Board (SRB) published its resolvability assessment and "heat map" for 2021, updated the operational guidance on implementation of bail-in tool, and issued the annual report for 2021.

    July 14, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8400