Featured Product

    EBA Revises Guidelines on Recovery Plan Indicators Under BRRD

    November 09, 2021

    The European Banking Authority (EBA) published revised guidelines on recovery plan indicators under the Bank Recovery and Resolution Directive (BRRD or Directive 2014/59/EU). The guidelines establish a common EU approach for developing the framework of recovery plan indicators, providing additional guidance on indicators’ calibration, monitoring, and breaches notifications. The revised guidelines retain most provisions of the existing guidelines, with the exception of replacing or adding a few metrics to the minimum list of recovery plan indicators and updating the format of the existing text to the current legal template for EBA guidelines.

    EBA first issued the guidelines on recovery plan indicators in 2015 and decided to amend them based on practical experience acquired in recovery planning. The existing guidelines have been expanded in the following areas:

    • Calibration of recovery plan indicators. Additional guidance is provided to institutions on the general principles to follow in setting the thresholds of recovery plan indicators, focusing on the treatment of recovery plan indicators in a crisis, in particular in the case of the application of supervisory relief measures. The guidelines clarify that, in the case of a systemic crisis, there should not be automatic recalibration of recovery plan indicators due to supervisory relief measures, unless it is duly justified and agreed with the competent authority.
    • Actions and notifications upon a recovery plan indicator breach and monitoring of recovery plan indicators. The guidelines recognize the importance of timely notification of recovery plan indicator breaches and of frequent monitoring of indicators in a situation of crisis for the institution and the competent authority.

    The guidelines specify the minimum list of categories of recovery plan indicators that should be covered (capital, liquidity, profitability, and asset quality indicators) plus two other categories (market-based and macroeconomic indicators) to be included, unless the institution justifies to the competent authorities that they are not relevant to its legal structure, risk profile, size and/or complexity. Limited amendments have been introduced minimum list of indicators. 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 revised guidelines will apply from two months after the publication in all European Union languages. The 2015 guidelines on recovery plan indicators will be repealed at the same time.


    Related Links

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

    Featured Experts
    Related Articles

    EBA Launches Stress Tests for Banks, Issues Other Updates

    The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.

    January 31, 2023 WebPage Regulatory News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8700