SRB Sketches Path to Further Ensure Bank Resolvability
In a recently published article, the SRB Board member Boštjan Jazbec discussed the progress made in ensuring bank resolvability in 2020. Introduction of a new resolution planning cycle based on a 12-month period was a major milestone in 2020 while the start of the gradual phase-in of the Expectations for Banks was the second key milestone. Additionally, in a press briefing, the SRB Chair Dr. Elke König highlighted that, in the coming years, SRB focus will continue to be on building resolvability for banks. SRB must keep up the momentum on increasing the Minimum Requirement for own funds and Eligible Liabilities (MREL), especially in light of the new rules and deadlines in the revised Bank Recovery and Resolution Directive (BRRD2), she noted.
The SRB Chair announced that the 2021 MREL policy, an expansion of the current policy, will be published in time for the new resolution planning cycle. Also, SRB will soon publish an updated framework on the "Public Interest Assessment," which is a key element for deciding whether a bank will be resolved or go into insolvency. This updated framework will complement the existing idiosyncratic assessment with a scenario reflecting systemic stress, or to put it into simple terms “a rainy day scenario.” In the next few years, SRB plans to fully operationalize the use of all resolution tools and their combined use for all banks, and not least for mid-size banks heavily reliant on deposit funding, which may find it challenging to access markets and issue debt. The SRB Chair also noted that all banks under the SRB remit have received bespoke work programs for 2021 and are expected to have built up their capabilities on all aspects of ensuring resolvability by the end of 2023. Finally, she emphasized the necessity of completing the Banking Union and of the progress toward building a harmonized deposit insurance framework and insolvency procedure for banks across all EU member states.
Related Links
Keywords: Europe, EU, Banking, Resolution Planning, MREL, Basel, Banking Union, Resolution Framework, BRRD, Regulatory Capital, SRB
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Trevor Howes
IFRS 17 technical advisor; AXIS actuarial modeling system expert; extensive experience in life insurance and life reinsurance, with focus on modeling, valuation, and financial reporting
Previous Article
SRB Communicates Approach to Determine Post-Brexit MREL EligibilityRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.