EBA publishes analysis on governance arrangements and indicators for recovery plans

05 July 2016

The European Banking Authority (EBA) published today a comparative Report on governance arrangements and indicators in recovery plans. Such a benchmarking exercise is aimed at supporting supervisors and institutions in identifying the crucial elements that should be considered when designing credible governance arrangements and effective indicator frameworks. This is the third thematic comparative analysis the EBA has conducted in the area of recovery planning.

In particular, the analysis has shown that in a number of recovery plans banks' approach on governance arrangements and indicators is already broadly in line with the requirements laid down in the Bank Recovery and Resolution Directive (BRRD). However, other plans still remain at a less advanced stage namely with regards to escalation procedures and decision making processes, where greater clarity is needed, and to governance arrangements and indicators, which need to be more consistent with the existing processes and frameworks.  Finally, the EBA has highlighted that coverage and integration of material legal entities within group recovery plans remains a challenging task for the majority of plans, as institutions have so far focussed mostly on the parent perspective, both with respect to escalation procedures and the use of recovery indicators.

Notes to editors

  • Following the implementation of the BRRD in January 2015 and in accordance with its role in contributing to effective recovery and resolution planning, the EBA has conducted a third thematic comparative analysis on 26 recovery plans across the EU with a focus on governance arrangements and indicators. 
     
  • For a recovery plan to be effective, clear governance arrangements, both in terms of the processes and procedures governing its development, maintenance, implementation and execution are needed. Moreover, institutions should include in their recovery plans an appropriate set of quantitative and qualitative indicators that adequately reflect their size and complexity and allow a proper and regular monitoring of potential risks.

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Franca Rosa Congiu

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