CBE Issues Circular on Formulation of Recovery Plans by Banks

The Central Bank of Egypt (CBE) published a circular that sets out general rules for preparing recovery plans for banks. As per CBE, a recovery plan should contain a plan summary, strategic analysis of bank, plan indicators, recovery options, evaluation of recovery options, plan scenarios, disclosure and communication plan, and governance requirements. The instructions further specify that banks should prepare a brief guide that includes all aspects of the recovery plan to be used by the bank’s board of directors and senior management when needed to activate the recovery plan to support the decision-making process. It may contain a clear and concise explanation of the main business lines and important functions of the bank; a summary of the disclosure plan and the responsibility of the various parties; a simplified explanation of the main elements of the plan, such as recovery indicators, stress scenarios, recovery options and their feasibility; the necessary preparatory measures to implement the plan; and the timeframe for plan implementation.

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