15 November 2022
The European Banking Authority (EBA) today launched a public consultation on its draft Guidelines addressed to institutions and resolution authorities on resolvability testing. The Guidelines aim to set-out a framework to ensure that resolvability capabilities developed to comply with the resolvability and transferability Guidelines are fit for purpose and effectively maintained. The consultation runs until 15 February 2023.
Resolution authorities and banks should now move to the resolvability testing following several years of policy development by authorities and policy implementation by institutions. Both now need to ensure that the arrangements put in place to support the execution of the resolution strategy are in fact adequate and that institutions will be ready to use those in the run-up to and upon entry into resolution.
The Guidelines are also aiming to promote the involvement of firms into the resolvability assessment process and increase they ownership of resolvability. As such, as a starting point, they propose that institutions submit a resolvability self-assessment annually where to set out how they will meet the resolvability capabilities and how they have gained assurance of their adequacy.
On the basis of this self-assessment, the Guidelines are proposing that authorities develop multi-annual testing programme so as to gain assurance of firms’ resolvability while providing sufficient visibility to banks.
Finally, for the most complex banks, the Guidelines are proposing to have them develop a master playbook to ensure a holistic approach to resolution planning.
Responses to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 15 February 2023.
A public hearing will take place via conference call on 11 January 2023 from 9:30 to 11:30 (CET).
The EBA has started several initiatives aiming to harmonise the approach to resolvability at EU-27 level and ensure the implementation of international standards on the matter. These draft Guidelines complement the already published Guidelines for institutions and resolution authorities on improving banks’ resolvability and the draft Guidelines on transferability. Further work is underway on the topic of resolvability transparency and resolvability in steady state.
Franca Rosa Congiu