07 June 2022
The European Banking Authority (EBA) launched today a public consultation on its draft Guidelines addressed to resolution authorities for the publication of their approach to implementing the bail-in tool. The Guidelines aim to ensure that a minimum level of harmonised information is made public with regard to the mechanics underpinning the execution of the bail-in tool. The consultation runs until 7 September 2022.
Transparency and predictability are key, both to the credibility of the resolution framework, and to the safeguard of investors’ protection. Practices by institutions and authorities differ with regard to the publication of information on how they would effectively execute the write down and conversion of capital instruments and the use of the bail-in tool (“exchange mechanic”).
All resolution authorities that have not yet published their bail-in mechanic are expected to start publishing a high-level document from January 2024 setting out the key aspects of their preferred approach. In particular, they should indicate whether they intend to make use of interim instruments. All the resolution authorities that have already published such information are expected to check if their publication complies with the EBA draft Guidelines.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page by 7 September 2022. All received contributions will be published at the end of the consultation, unless requested otherwise.
A public hearing on the draft Guidelines will take place via conference call on 19 July 2022 from 10:00 to 12:00.
You can register for the hearing here by 12 July 2022 16:00 CEST.
The EBA has recently initiated 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 testing.
Franca Rosa Congiu