EBA Assesses Interlinkages Between Recovery and Resolution Planning
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD). The comparative analysis of recovery and resolution plans by EBA indicates that further work is needed in this area to study the impact of resolution plans on recovery planning and develop further guidance on certain aspects of the interlinkage.
The report outlines the observations of EBA from its first comparative analysis of recovery and resolution plans and identifies best practices and areas where further improvement and/or clarifications are needed. In addition, on certain common elements between both types of plans, such as critical functions and access to central bank facilities, the report clarifies their specific purpose in each planning phase and the advantages or disadvantages of a potential convergence or harmonization. Finally, the report analyzes the potential impact of recovery options on the resolvability of an institution and introduces an assessment framework to support the assessment and consultation process between resolution and competent authorities. Annex 1 to the report includes a template used to perform comparative analysis of a sample of recovery and resolution plans while Annex 2 presents a practical tool to help resolution authorities in conducting the analyses of the potential impact of recovery options on the resolvability of an institution.
The assessment in this report is intended to enhance synergies between recovery and resolution planning phases and ensure consistency in their potential implementation. The findings of the comparative analysis of recovery and resolution plans reveal that further work is needed in this area. Therefore, EBA plans to perform further work on the impact of resolution plans—particularly the impact of measures to remove impediments to resolvability—on ongoing supervision and recovery planning. The guidance work on certain practical aspects of interlinkage, such as on the timelines of recovery and resolution planning cycles, will also be undertaken, as such work is deemed useful for enhancing interactions among competent authorities and the resolution authorities.
Related Links
Keywords: Europe, EU, Banking, Recovery Planning, Resolution Planning, BRRD, Systemic Risk, Comparative Analysis, Resolution Framework, EBA
Previous Article
QCB Announces Measures to Address Impact of COVID-19 OutbreakRelated Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
HM Treasury Announces G7 Agreement on Green Agenda Ahead of COP26
HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.