SRB launched a consultation that sets out the capabilities banks are expected to demonstrate to show that they are resolvable. The Expectations for Banks document outlines best practices on key aspects of resolvability. The Expectations are structured along seven dimensions: governance, loss absorption and recapitalization capacity, liquidity and funding in resolution, operational continuity and access to Financial Market Infrastructures, information systems and data requirements, communication, and separability and restructuring. In addition, the business model, structure, and complexity or other areas might have to be addressed to achieve resolvability of a bank. Comment period on the consultation ends on December 04, 2019.
The document sets out the SRB expectations for banks in the resolution planning phase, to demonstrate that they are resolvable and prepared for crisis management. It is a guidance on the actions that banks, under the SRB remit, should undertake to ensure an appropriate level of resolvability. The expectations represent a common approach to ensure consistency and a level playing field within the Banking Union. While the expectations are general in nature, their application to each bank will have to be tailored, taking into account proportionality principles based on a dialog between each bank and its Internal Resolution Team. The result will feed into the annual resolution work programs for banks.
The expectations are not exhaustive and do not prejudge the content of further SRB communications related to resolvability requirements for banks. In this context, Internal Resolution Teams may go beyond what is described in the Expectations by requesting additional information and analyses on specific topics in the resolution planning cycle that are relevant to progress in resolution planning and to improve the resolvability of the respective bank. Taking proportionality into account when applying the expectations, Internal Resolution Teams might also deviate from some of the expectations, provided this is considered appropriate and proportionate in light of the bank-specific characteristics. Banks are expected to work toward resolvability by applying the principles set out in this document as of the date of its publication.
Comment Due Date: December 04, 2019
Keywords: Europe, EU, Banking, Resolution, Resolvability, Resolution Planning, Banking Union, Proportionality, Governance, SRB
Previous ArticleHKMA Publishes Update on Reform of Interest Rate Benchmarks
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.