Response to consultation Paper on Guidelines amending Guidelines EBA/GL/2022/01 on improving resolvability for institutions and resolution authorities
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(LCA+RCA) that should be led either by the resolution authority of the resolution
entity or the host resolution authorities, should be limited in scope or adjusted
based on its individual requirements. Non-Resolution entities within a resolution
group and within the same member state for example might have limited
requirements in terms of operational continuity, bail-in, contractual clauses,
reorganization plan etc. The EBA Guideline should not only provide
proportionality for compliance as defined in number 23 or on formatting as
defined in 128, but also provide the possibility to limit the self-assessment based
on individually addressed requirements given by the local or group resolution
authority.
• The guideline should be enhanced by the requirement for the resolution
authority to present the authority’s assessment to the bank in order to identify
improvement areas and to avoid miscommunication.
authority a report, where they self-assess whether they meet, and to what degree, the
capabilities set-out. In section 4.1 to 4.5 and 4.8. of these guidelines, and in sections
2 and 3 of the Guidelines on transferability to complement the resolvability assessment
for transfer strategies (Transferability Guidelines), including inter alia the following
elements:
a. Degree in which the capability is met (low, mid, high, not applicable)
b. Description of how the capability is met or why it is deemed not applicable under
point a.
c. Gap assessment on the resolvability capabilities as set out in these guidelines and
those of the institution, on how this gap can be addressed and by when;
d. Description of how the capability is embedded in business as usual (BaU)
e. Description of how the capability relates to the recovery planning of the institution
(e.g. do operational continuity in resolution arrangements also support recovery
options such as disposals, or are recovery arrangements leveraged to support
resolution)
f. Any internal or external assessment performed on how these guidelines have been
applied by the institution, including internal or external audits reports, external
consultant assessments, dry runs or supervisory reviews;
g. Any additional topic set-out by the relevant resolution authority (e.g. lessons learned
from recent downturn or market event)”
Some banks have been measuring their progress based on the 2021 SRB Expectation
for Banks (EfB) and not the Guidelines EBA/GL/2022/01 on improving resolvability for
institutions and resolution authorities. In its advice, the EBA refers to an assessment
of its own guidelines (sections 4.1 to 4.5 and 4.8.). We suggest that reference is made
to the EfB as those are the more operationalized guidelines to achieve resolvability.
Until 2022, banks were asked to perform multi annual programs and progress reports
based on the expectations for banks principal. In 2022, a self-assessment tool is
provided by the SRB, to be filled out by the bank on a yearly basis. The listed
parameters as defined in section (4.6 (126)) deviate from the SRB in all parameters
and provide new requirements and extended scope except for the gap assessment.
Providing the clarification in 128, we assume it is not expected that the published EBA report on self-assessment is a complementary report, but the self-assessment report provided by the SRB is relevant. This is relevant to enable stability for proper planning
and reporting. A harmonized and stable reporting is necessary.
Ad d. Description of how the capability is embedded in business as usual (BaU):
• A better approach would be to use the SRB field showing related: Documents
Ad g. Any additional topic set-out by the relevant resolution authority (e.g. lessons
learned from recent downturn or market event)
• This point should not be a parameter (column) but rather listed together with
topic requirements such as performing dry runs.
“(125) In a preamble to the self-assessment set-out in paragraph 124, institutions
should summarise:
a. set-out their understanding of the resolution strategy as identified by the
resolution authority; and of their role and that of the authority (ies) in the
execution of that strategy.”
b. describe their testing and assurance framework that allow them to ensure their
capacity to support the execution of the resolution strategy on a continued
basis.”
Ad a. It is not clear whether it is expected by the banks to describe their understanding
of the role of the authority in executing the strategy. In order to respond to this
requirement, banks should receive the relevant resolution plan sections that are only
on high-level summary available to banks.
Ad b. This is a duplication to the requirements set under parameter 124 (f) (dry runs)
and should be removed.
Ad “(126) Reports should be submitted by institutions to the resolution authority on an annual basis. The first report should be submitted by 31 December 2024.”
• Provided that non-resolution entities requirement is new and having in mind the
date of effectiveness of publication, the deadline should be set with 2025.
• Besides, having in mind the considerable effort, we deem that a submission of
the self-assessment report every two years would be justified.
128. For the purpose of the self-assessment report referred to in paragraph 124, institutions should follow the format provided by their resolution authority.
We reinforce our argument by the fact that the EBA in paragraph 128 itself states that,
for the purpose of the self-assessment report referred to in paragraph 124, institutions
should follow the format provided by their resolution authority. We expect the resolution authority would like to refer to its own EfB.
whole (and not only the testing techniques as referred to in paragraph 133) should be:
(1) proportionate to the bank’s size, risk profile, business model and resolution
strategy; and
(2) adapted to other supervisory expectations (inter alia from the ECB), in other to
avoid overlap and overcrowded time use of a select part of the bank’s staff.
Based on the proportionality principle we propose that the frequency of the
multiannual testing programme follows the frequency set by the EBA Guidelines
on common procedures and methodologies for the supervisory review and
evaluation process (SREP) and supervisory stress testing under Directive
2013/36/EU to different categories of institutions based on their size and
complexity (Table 1, Sect. 2.4.5)
the resolution authorities on a successful resolution process that is interlinked would
be welcome. The expectations for banks should be based on an initial thought that
would be made clear.
Does the Master playbook that contains all relevant dimensions replace the other
playbooks/handbooks like bail-in playbook, FMI CFP and its annual update on a
separate basis or is this an additional playbook that should co-exist, by duplicating all
information from the source handbooks? To avoid unnecessary duplications, we argue for only one set of documents.
Ad b) to set-out timeframes on decisions in resolution, further information should be
provided by the authority for crucial information steps especially such as: when is the
bail-in process operationally to be kicked in / prepared if resolution notification is only
published at a later stage.
Also, for the master playbook we consider that a regular (and not yearly) submission
every two years is sufficient and proportionate.
Q1. Do you have any comments on the proposal to introduce a self-assessment to improve banks involvement in the resolution planning process?
• The scope of the self-assessment report & testing requirements (20) for non-resolution entities that have MREL requirements higher than own funds(LCA+RCA) that should be led either by the resolution authority of the resolution
entity or the host resolution authorities, should be limited in scope or adjusted
based on its individual requirements. Non-Resolution entities within a resolution
group and within the same member state for example might have limited
requirements in terms of operational continuity, bail-in, contractual clauses,
reorganization plan etc. The EBA Guideline should not only provide
proportionality for compliance as defined in number 23 or on formatting as
defined in 128, but also provide the possibility to limit the self-assessment based
on individually addressed requirements given by the local or group resolution
authority.
• The guideline should be enhanced by the requirement for the resolution
authority to present the authority’s assessment to the bank in order to identify
improvement areas and to avoid miscommunication.
Q2. Do you have any comments on the list of questions to banks included in the self-assessment as set-out in para 125-126?
“124. Institutions should annually prepare and submit to the relevant resolutionauthority a report, where they self-assess whether they meet, and to what degree, the
capabilities set-out. In section 4.1 to 4.5 and 4.8. of these guidelines, and in sections
2 and 3 of the Guidelines on transferability to complement the resolvability assessment
for transfer strategies (Transferability Guidelines), including inter alia the following
elements:
a. Degree in which the capability is met (low, mid, high, not applicable)
b. Description of how the capability is met or why it is deemed not applicable under
point a.
c. Gap assessment on the resolvability capabilities as set out in these guidelines and
those of the institution, on how this gap can be addressed and by when;
d. Description of how the capability is embedded in business as usual (BaU)
e. Description of how the capability relates to the recovery planning of the institution
(e.g. do operational continuity in resolution arrangements also support recovery
options such as disposals, or are recovery arrangements leveraged to support
resolution)
f. Any internal or external assessment performed on how these guidelines have been
applied by the institution, including internal or external audits reports, external
consultant assessments, dry runs or supervisory reviews;
g. Any additional topic set-out by the relevant resolution authority (e.g. lessons learned
from recent downturn or market event)”
Some banks have been measuring their progress based on the 2021 SRB Expectation
for Banks (EfB) and not the Guidelines EBA/GL/2022/01 on improving resolvability for
institutions and resolution authorities. In its advice, the EBA refers to an assessment
of its own guidelines (sections 4.1 to 4.5 and 4.8.). We suggest that reference is made
to the EfB as those are the more operationalized guidelines to achieve resolvability.
Until 2022, banks were asked to perform multi annual programs and progress reports
based on the expectations for banks principal. In 2022, a self-assessment tool is
provided by the SRB, to be filled out by the bank on a yearly basis. The listed
parameters as defined in section (4.6 (126)) deviate from the SRB in all parameters
and provide new requirements and extended scope except for the gap assessment.
Providing the clarification in 128, we assume it is not expected that the published EBA report on self-assessment is a complementary report, but the self-assessment report provided by the SRB is relevant. This is relevant to enable stability for proper planning
and reporting. A harmonized and stable reporting is necessary.
Ad d. Description of how the capability is embedded in business as usual (BaU):
• A better approach would be to use the SRB field showing related: Documents
Ad g. Any additional topic set-out by the relevant resolution authority (e.g. lessons
learned from recent downturn or market event)
• This point should not be a parameter (column) but rather listed together with
topic requirements such as performing dry runs.
“(125) In a preamble to the self-assessment set-out in paragraph 124, institutions
should summarise:
a. set-out their understanding of the resolution strategy as identified by the
resolution authority; and of their role and that of the authority (ies) in the
execution of that strategy.”
b. describe their testing and assurance framework that allow them to ensure their
capacity to support the execution of the resolution strategy on a continued
basis.”
Ad a. It is not clear whether it is expected by the banks to describe their understanding
of the role of the authority in executing the strategy. In order to respond to this
requirement, banks should receive the relevant resolution plan sections that are only
on high-level summary available to banks.
Ad b. This is a duplication to the requirements set under parameter 124 (f) (dry runs)
and should be removed.
Ad “(126) Reports should be submitted by institutions to the resolution authority on an annual basis. The first report should be submitted by 31 December 2024.”
• Provided that non-resolution entities requirement is new and having in mind the
date of effectiveness of publication, the deadline should be set with 2025.
• Besides, having in mind the considerable effort, we deem that a submission of
the self-assessment report every two years would be justified.
128. For the purpose of the self-assessment report referred to in paragraph 124, institutions should follow the format provided by their resolution authority.
We reinforce our argument by the fact that the EBA in paragraph 128 itself states that,
for the purpose of the self-assessment report referred to in paragraph 124, institutions
should follow the format provided by their resolution authority. We expect the resolution authority would like to refer to its own EfB.
Q3. Do you have any comments on the proposal to require authorities to communicate a multiannual testing programme?
We would expect that the EBA advises that the multiannual testing programme as awhole (and not only the testing techniques as referred to in paragraph 133) should be:
(1) proportionate to the bank’s size, risk profile, business model and resolution
strategy; and
(2) adapted to other supervisory expectations (inter alia from the ECB), in other to
avoid overlap and overcrowded time use of a select part of the bank’s staff.
Based on the proportionality principle we propose that the frequency of the
multiannual testing programme follows the frequency set by the EBA Guidelines
on common procedures and methodologies for the supervisory review and
evaluation process (SREP) and supervisory stress testing under Directive
2013/36/EU to different categories of institutions based on their size and
complexity (Table 1, Sect. 2.4.5)
Q4. Do you have any comments on the proposal to introduce a master playbook for the more complex banks?
Before asking banks to set up a master playbook, any guidance or information fromthe resolution authorities on a successful resolution process that is interlinked would
be welcome. The expectations for banks should be based on an initial thought that
would be made clear.
Does the Master playbook that contains all relevant dimensions replace the other
playbooks/handbooks like bail-in playbook, FMI CFP and its annual update on a
separate basis or is this an additional playbook that should co-exist, by duplicating all
information from the source handbooks? To avoid unnecessary duplications, we argue for only one set of documents.
Ad b) to set-out timeframes on decisions in resolution, further information should be
provided by the authority for crucial information steps especially such as: when is the
bail-in process operationally to be kicked in / prepared if resolution notification is only
published at a later stage.
Also, for the master playbook we consider that a regular (and not yearly) submission
every two years is sufficient and proportionate.