Recovery, resolution and DGS

Under the Bank Recovery and Resolution Directive (BRRD) on crisis prevention, management and resolution, the EBA is mandated  to develop a wide range of Technical Standards, Guidelines and Reports with the aim of ensuring effective and consistent procedures across the Union, in particular with respect to cross-border financial institutions. The ultimate objective of the BRRD framework is to enhance financial stability, reduce moral hazard, protect depositors and critical financial services, save public money and ensure the smooth functioning of the internal market for financial services. The BRRD is complemented by the Deposit Guarantee Scheme Directive (DGSD), which also assigns rulemaking tasks to the EBA, and by other forthcoming regulatory initiatives on financial institutions other than banks. The DGSD aims to facilitate access to the internal market through the freedom of establishment and the freedom to provide financial services while increasing the stability of the banking system and the protection of depositors.
 
To fulfil its role of monitoring the implementation of the BRRD and the DGSD, national authorities must notify the EBA of any relevant information as well as of any actions taken. The EBA publishes the non-confidential elements of these notifications on its website (i.e. notifications on resolution, liquidation cases with DGS payouts and other DGS interventions), which can be accessed here. Similarly, Member States must periodically report to the EBA data relating to the funding levels of their national Deposit Guarantee Schemes.
 

 

Technical Standards, Guidelines & Recommendations

  • Report on the implementation of the Guidelines on methods for calculating contributions to DGSs

    The report assesses whether the principles outlined in the EBA Guidelines on methods for calculating contributions to DGSs (Guidelines) are being met in practice. It also evaluates whether there is appropriate and consistent implementation of these Guidelines across Member States.

    Status: Under development

  • Regulatory Technical Standards on valuation

    These draft Regulatory Technical Standards (RTS) aim to provide a common structure to decisions made by resolution authorities and independent valuers. They are intended to promote the consistent application of methodologies for valuations across the Union, giving a common structure to the decisions of resolution authorities. However, they do not seek to provide detailed valuation rules for particular types of asset or liability, but to specify the principles on the basis of which the valuer must apply their own information and expertise in particular cases.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Regulatory Technical Standards on Simplified Obligations

    These Regulatory Technical Standards further specify the eligibility criteria to determine whether institutions should be subject to simplified obligations when drafting their recovery and resolution plans.

    Status: Under development

  • Recommendations on the coverage of entities in a group recovery plan

    These draft recommendations are aimed at defining common criteria to identify entities that need to be covered in group recovery plans, and at providing a common guidance for the extent of such coverage.

    Status: Final (awaiting translation into the EU official languages)

  • ITS on MREL reporting by Resolution Authorities

    These standards will enable the EBA to monitor on a consistent basis the implementation of MREL across the Union.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Report on the appropriate target level basis for resolution financing arrangements under BRRD

    This report defines the reference point for the target level of national resolution financing arrangements. The appropriateness of the basis for the target level is assessed on the basis of a number of qualitative criteria and historical data. The draft report recommends changing the basis from covered deposits to a total liabilities based measure.

  • Guidelines on cooperation agreements between deposit guarantee schemes

    These Guidelines are part of the EBA's work to promote a consistent and coherent approach to cooperation agreements between deposit guarantee schemes (DGSs) across the European Union (EU). The proposed Guidelines specify the objectives and minimum content of cooperation agreements, with the aim of contributing to strengthen the European system of national DGSs.

    Status: Final and translated into the EU official languages

  • Regulatory Technical Standards on Business Reorganisation Plans

    These Regulatory Technical Standards (RTS) define the content of “Business Reorganisation Plans and Progress Reports”. These RTS have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD) which sets procedures for the recovery and resolution of credit institutions, investment firms and related entities across the EU. The draft RTS develop in detail the elements that should be included in a resolution plan and the content of the related progress reports.

    Status: Final and translated into the EU official languages

  • Guidelines on Business Reorganisation Plans

    These Guidelines focus on the assessment of these plans and have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD) which sets procedures for the recovery and resolution of credit institutions, investment firms and related entities across the EU. The draft Guidelines specify further the minimum criteria for a plan to be approved by Resolution and Competent Authorities across the EU, who should assess the credibility of the assumptions, as well as the presence of concrete performance indicators in the plan.

    Status: Final and translated into the EU official languages

  • Guidelines on stress tests of deposit guarantee schemes

    The proposed Guidelines will provide the methodological principles to assess whether the operational and funding capabilities of deposit guarantee schemes (DGSs) are sufficient to ensure deposit protection in the event of a bank failure. In line with the Deposit Guarantee Schemes Directive (DGSD), these Guidelines will promote the quality and the consistency of these stress tests. The resulting data will also facilitate future peer reviews by the EBA, contributing to a safe and sound EU framework for the benefit of depositors and financial stability.

    Status: Final and translated into the EU official languages

  • Guidelines on how information should be provided under the BRRD

    These Guidelines outline how confidential information collected under the Bank Recovery and Resolution Directive (BRRD) should be disclosed in summary or collective form without identifying individual institutions or relevant entities. The aim of these Guidelines is to promote convergence of supervisory and resolution practices regarding the disclosure of confidential information. In particular, the draft Guidelines specify that the disclosure of confidential information in summary or collective form should be made available in anonymised form, either by means of a brief statement or on an aggregate basis, and define principle based factors which should be considered in order to ensure that information is disclosed in such a form.

    Status: Final and translated into the EU official languages

  • Guidelines on early intervention triggers

    The Guidelines on the triggers for using early intervention measures (triggers for early intervention) ensure continuum between the on-going supervision conducted by national authorities in line with the CRD, and the Bank Recovery and Resolution Directive (BRRD). They aim at promoting convergence of supervisory practices in relation to how to apply early intervention measures.

    Status: Final and translated into the EU official languages

  • Guidelines on recovery plans indicators

    These Guidelines identify the minimum qualitative and quantitative indicators that institutions should include in their recovery plans. They have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD) for the recovery and resolution of credit institutions and investment firms.

    Status: Final and translated into the EU official languages

  • Implementing Technical Standards (ITS) on the disclosure of group financial support agreements

    The Implementing Technical Standards (ITS) on the disclosure of group financial support agreements refers to one entity of a banking group providing support to another entity of the same group on the basis of a financial support agreement. The ITS aims at ensuring high standards of transparency with regard to support agreements, enabling creditors and other stakeholders of the group to make informed investment decisions and to assess the consequences of the agreement both on individual subsidiaries and the group as a whole.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Guidelines specifying the various conditions for the provision of group financial support

    These Guidelines specify the various conditions for the provision of group financial support and aim to establish a clear harmonised legal framework to facilitate group support and to enhance legal certainty, despite existing legal obstacles. In addition, they will ensure adequate safeguards for financial stability are also maintained in relation to prudential requirements.

    Status: Final and translated into the EU official languages

  • Regulatory Technical Standards (RTS) on conditions for the provision of group financial support

    These Regulatory Technical Standards (RTS) will establish a clear harmonised legal framework to facilitate group support and to enhance legal certainty. They will ensure adequate safeguards for financial stability are maintained including in relation to public interests, such as the resolvability of the entity providing the support.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Implementing Technical Standards on simplified obligations

    These ITS propose a number of templates and definitions to be used by competent and resolution authorities for the identification and transmission of information to the EBA about the way they have assessed institutions against the criteria set out in the BRRD, including the mandatory indicators, and the nature of the simplified obligations applied to eligible institutions. They are part of the EBA’s work to promote convergence of practices between competent and resolution authorities across the EU.

    Status: Adopted and published in the Official Journal

  • Guidelines on simplified obligations

    These Guidelines define how EU authorities should assess whether an institution is eligible for simplified obligations. They are part of the EBA’s work to promote convergence of practices between competent and resolution authorities across the EU.

    Status: Final and translated into the EU official languages

  • Implementing Technical Standards on procedures, forms and templates for resolution planning

    The Bank Recovery and Resolution Directive (BRRD) requires resolution authorities to draw up resolution plans that outline the actions to be taken in case an institution meets the conditions for resolution. The ITS on procedures, standard forms and templates for the provision of information for the purpose of resolution plans sets out a procedure that should be followed when resolution authorities require information about an institution for the purpose of drawing up a resolution plan.

    Status: Adopted and published in the Official Journal

  • Regulatory Technical Standards on independent valuers

    These RTS set forth general criteria to be used in order to determine, on a case by case basis, whether a valuer complies with the legal requirement of independence when performing valuation tasks with respect to a bank under resolution. These RTS also identify the circumstances under which a person will be deemed independent from both the resolution authority and the institution or entity subject to the valuation.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Regulatory Technical Standards on notifications and notice of suspension

    The draft Regulatory Technical Standards (RTS) on notifications and notice of suspension have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD). These RTS aim at harmonising the process and content of notifications and notice of suspension arising from a determination that a firm is failing or likely to fail and the subsequent resolution actions.

    Status: Adopted and published in the Official Journal

  • Regulatory Technical Standards on minimum requirement for own funds and eligible liabilities (MREL)

    These draft Regulatory Technical Standards (RTS) aim to specify the criteria to set the minimum requirement for own funds and eligible liabilities (MREL) laid down in the Bank Recovery and Resolution Directive (BRRD). They clarify how the institution’s capital requirements should be linked to the amount of MREL needed to absorb losses and, where necessary, recapitalise a firm after resolution. Finally, the RTS propose that for systemic institutions, resolution authorities should consider the potential need to be able to access the resolution financing arrangement if a resolution relying solely on the institution’s own resources is not possible.

    Status: Adopted and published in the Official Journal

  • Regulatory Technical Standards on resolution colleges

    These Regulatory Technical Standards (RTS) specify the operational functioning of the resolution colleges that are to be established for those banking groups that operate on a cross-border basis within the European Economic Area (EEA). These RTS are based on specific requirements laid down in the Bank Recovery and Resolution Directive (BRRD), which provides a common resolution regime across the EU aimed at allowing home and host authorities to deal with failing institutions and cooperate in the process of resolution planning.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Regulatory Technical Standards on contractual recognition of bail-in

    These draft Regulatory Technical Standards (RTS) support the effective application of the write-down and conversion powers in relation to liabilities governed by the law of a third country. These RTS and are part of EBA's work to promote the effective application of recovery and resolution powers to banks and banking groups with a cross-border presence and to foster convergence of practices between relevant authorities and institutions across the EU.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Guidelines on payment commitments

    These guidelines lay down the requirements that will secure reliable funding for the Deposit Guarantee Scheme (DGS) and clarify the prudential treatment of payment commitments, so as to ensure they are technically sound and implemented in a consistent way across the Single Market.

    Status: Final and translated into the EU official languages

  • Guidelines on methods for calculating contributions to Deposit Guarantee Schemes (DGSs)

    These Guidelines set principles and specify necessary elements for calculating risk-based contributions to Deposit Guarantee Schemes (DGSs). They foster convergence in contributions practices across the EU and promote level playing field for banks within the Single Market. In addition, the Guidelines offer a comparable basis for assessing progress in convergence when reviewing the framework of DGS contributions in 2017.

    Status: Final and translated into the EU official languages

  • Guidelines on failing or likely to fail

    The Guidelines on the circumstances under which an institution shall be considered as ‘failing or likely to fail’ (triggers for resolution) ensure continuum between the on-going supervision conducted by national authorities in line with the CRD, and the Bank Recovery and Resolution Directive (BRRD). They aim at promoting convergence of supervisory and resolution practices in relation to how resolution should be triggered.

    Status: Final and translated into the EU official languages

  • Guidelines on necessary services

    The Guidelines on necessary services aim at fostering convergent practices among Member States’ resolution authorities by giving comprehensive guidance on which circumstances resolution authorities should assess when taking their decisions. They define, in particular, a minimum list of necessary ‘critical’ services that the resolution authority may require from the institution under resolution.

    Status: Final and translated into the EU official languages

  • Guidelines on the sale of business tool

    The Guidelines on the sale of business tool aim at fostering convergent practices among Member States’ resolution authorities by giving comprehensive guidance on which circumstances resolution authorities should assess when taking their decisions. They specify, in particular, when authorities may deviate from certain marketing requirements for the sale of the business of an institution under resolution.

    Status: Final and translated into the EU official languages

  • Guidelines on the asset separation tool

    The Guidelines on the asset separation tool aim at fostering convergent practices among Member States’ resolution authorities by giving comprehensive guidance on which circumstances resolution authorities should assess when taking their decisions. In particular, they give guidance on assets that may be transferred under the asset separation tool.

    Status: Final and translated into the EU official languages

  • RTS defining methodologies for the valuation of derivative liabilities

    These Regulatory Technical Standards (RTS) define methodologies for the valuation of derivative liabilities for the purpose of bail-in in resolution. They have been developed within the framework of the Bank Recovery and Resolution Directive (BRRD). The RTS provide EU resolution authorities with a methodology for the valuation of derivative liabilities of credit institutions placed under resolution and ensure that the discipline brought in by the new bail-in tool can effectively be extended to these liabilities too.

    Status: Final and translated into the EU official languages

  • Regulatory Technical Standards on detailed records of financial contracts

    These draft Regulatory Technical Standards (RTS) on detailed records of financial contracts of institutions or relevant entities have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD). These standards aim to guarantee appropriate convergence in record keeping across the EU, whilst also ensuring that differences in institutions or relevant entities are taken into account.

    Status: Adopted and published in the Official Journal

  • Guidelines on the rate of conversion of debt to equity in bail-in

    These Guidelines clarify when and how different conversion rates from debt to equity should be set for different types of liability. They propose the criteria that resolution authorities need to take into account when setting conversion rates, and in particular how they should take account of valuation information.

    Status: Final and translated into the EU official languages

  • Guidelines on the treatment of shareholders in bail-in

    These Guidelines clarify the circumstances which should guide the choice between cancellation and severe dilution of existing shares (or other instruments of ownership) when applying the bail-in tool or the write down or conversion of capital instruments power provided for in the BRRD.

    Status: Final and translated into the EU official languages

  • Guidelines on treatment of liabilities in bail-in

    These Guidelines clarify the interrelationship between the sequence in which liabilities should be written down or converted when the bail-in power introduced by the Bank Recovery and Resolution Directive (BRRD) is used, and the hierarchy of capital instruments in the Capital Requirements Regulation (CRR). This is the first of several EBA regulatory mandates under the BRRD which aim to ensure that bail-in power is an effective way of absorbing losses and recapitalising banks in resolution and that resolution authorities and other stakeholders have a clear understanding of the terms under which it should be applied.

    Status: Final and translated into the EU official languages

  • Guidelines on the types of tests, reviews or exercises that may lead to support measures

    These Guidelines specify the types of tests, reviews and exercises and provide details of the main features of such measures. They are part of the EBA’s work to promote the consistent and coherent approach to bank resolution across the European Union.

    Status: Final and translated into the EU official languages

  • Guidelines on measures to reduce or remove impediments to resolvability

    These Guidelines complement the EBA technical standards on resolution planning and resolvability assessment by setting out the circumstances under which resolution authorities can impose measures to overcome obstacles to resolvability identified by the assessment.

    Status: Final and translated into the EU official languages

  • Regulatory Technical Standards on resolution planning

    The proposed RTS specify the contents of resolution plans drawn up by resolution authorities for individual institutions and groups as well as the criteria on which the resolvability assessment should be based.

    Status: Adopted and published in the Official Journal

  • Guidelines on the range of scenarios to be used in recovery plans

    These Guidelines aim at specifying the range of scenarios of severe macroeconomic and financial distress against which institutions shall test the impact and feasibility of their recovery plans. The recovery plans detail the arrangements which institutions have in place and the early action steps that would be taken to restore their long-term viability in the event of a material deterioration of financial situation under severe stress conditions. When the consultation was launched, there was an existing mandate in the Bank Recovery and Resolution Directive (BRRD) for the EBA to develop technical standards for the range of scenarios to be used by firms to test their recovery plans. During legislative process the mandate has been amended and the EBA was asked to develop Guidelines instead.

    Status: Final and translated into the EU official languages

  • Regulatory Technical Standards on the assessment of recovery plans

    These Regulatory Technical Standards (RTS) will outline the matters that competent supervisors must assess when reviewing individual and group recovery plans developed by financial institutions. The main objective is to ensure a common approach across the EU regarding the assessment of recovery plans and so to facilitate joint assessments of group recovery plans by different supervisory authorities.

    Status: Final draft adopted by the EBA and submitted to the European Commission

  • Regulatory Technical Standards on the content of recovery plans

    These Regulatory Technical Standards will provide details on the key parts and information that must be included in recovery plans to be drafted by financial institutions as requested by the Recovery and Resolution Directive (RRD). Recovery plans shall set out the arrangements and measures a bank would adopt to restore long-term financial viability in case of severe distress.

    Status: Adopted and published in the Official Journal

  • Recommendation on the development of recovery plans

    The EBA adopted a formal Recommendation to ensure that major EU cross-border banks develop group recovery plans by the end of 2013. The plans shall be submitted to the respective competent authorities and discussed within colleges of supervisors. The aim of the Recommendation is to spur the development of recovery plans and to foster convergence on the highest standards across the Union.

    Status: Final and translated into the EU official languages

Opinions, Reports and other Publications

 

Reports

Opinions