20 May 2020
The European Banking Authority (EBA) publishes today a Report, which assesses interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD), with the aim of enhancing synergies between the two phases and ensuring consistency in their potential implementation.
Although formally separated under the BRRD, recovery and resolution planning could be seen as a continuum. It is, therefore, crucial to maximise synergies and ensure a smooth transition from one phase to another. In line with this objective, and following a first comparative analysis of a sample of recovery and resolution plans, the Report outlines the EBA’s observations and identifies best practices and areas where further improvement and/or clarifications are needed. In addition, on some specific common elements between both types of plans such as critical functions and access to central bank facilities, it clarifies their specific purpose in each planning phase and the advantages/disadvantages of potential convergence/harmonisation.
Lastly, the Report analyses the potential impact of recovery options on the institution’s resolvability and introduces an assessment framework to support the assessment and consultation process between resolution and competent authorities.
The Report is accompanied by two separate annexes. The first annex includes a template used to perform the comparative analysis of a sample of recovery and resolution plans. The second annex is a practical tool that will help resolution authorities in conducting their analysis of the potential impact of recovery options on the institution’s resolvability.
Franca Rosa Congiu