First, as a general rule, the EBA should ensure that there is effective communication between the resolution college and the banking group in order for the college’s decisions to be well-informed.
We would welcome more transparency on the timetables agreed by the resolution college. The group-level resolution authority should transmit the timetables for joint decisions to the Union parent undertaking, rather than only communicating certain aspects of the timetables.
As regards to the communication on timetables, there seems to be a mistake in the drafting of Article 13 (5) which states that some aspects of the timetable will be communicated to the parent undertaking (as regards to point a; h and m) but does not mention point i which concerns the dialogue with the bank itself on the resolution plan.
Also, more transparency would be helpful concerning written arrangements to be adopted by the college. For instance, banks should be informed about the membership of the resolution college, frequency of meetings, and how resolution authorities intend to communicate within the college.
In the case of the joint decision process on group resolution plan and recovery assessment, Article 13 (i) states that a dialogue between the group-level resolution authority and the Union parent undertaking on the draft group resolution plan and its resolvability assessment should take place where “this is deemed appropriate” by the group-level resolution authority. We consider that an exchange of views on the draft plan is essential and should not be optional. We do not think that discussing the plan only when a joint decision has already been reached (Article 23) would be sufficient.
We suggest adding an article before Article 20 to reflect point (i), and specify that the dialogue with the Union parent undertaking on the joint decision would be automatic. The parent undertaking should have the opportunity to submit any observations or justifications to the group-level authority regarding the draft resolution plan and recovery assessment.
Second, we agree that the group-level resolution authority should be responsible for communicating with the Union parent undertaking (Article 10). For this reason we are concerned by Article 17 (2) which provides that a resolution authority can ask additional information to the Union parent undertaking, if it deems the information to be relevant to the entity or the branch under its jurisdiction. This could lead to multiple and uncoordinated requests, therefore it is important that the group-level resolution authority acts as coordinator for the collection and dissemination of information.
Article 17 (2) could be amended as follows: “Any authority receiving information from the group-level resolution authority may request additional information within the deadline of paragraph 1, if the relevant authority deems the additional information to be relevant to the entity or the branch under its jurisdiction. In this case, the resolution authority may ask the group-level resolution authority for additional information. The group-level authority will review the request and liaise directly with the Union parent undertaking. Article 16(4) shall then apply.”
Finally, Article 12 regarding operational tests could be clarified. As currently drafted, it is unclear whether the test would concern only members of the resolution college or if banks would be involved as well. The Union parent undertaking should be involved at least in the testing of communication and planning procedures.
The first critical step in the establishment of the resolution college will be the mapping exercise. It would be helpful to clarify in the RTS the entities that will be in the scope. The EBA does not specify whether only regulated entities are in the scope, or whether services entities or off-balance sheet vehicles would also be taken into account.
When creating the resolution college at EU level, it will be important to acknowledge the existing CMG established under the FSB framework. For G-SIBs, resolution has to be coordinated at the CMG level and there should be clear flexibility to keep the CMG as the main decision-making body, with the “EU” resolution college as a subset. This would allow greater efficiency.
The interaction between the resolution college at EU level and third countries which are not members of the CMG is not clearly articulated in the RTS. The EBA should follow the FSB’s Draft Guidance on Cooperation and Information Sharing with Non-CMG Host Authorities (October 2014) when establishing the framework for third countries.
We welcome the requirement that the resolution college should take into account the timetables for other joint decisions. In the case of the group recovery plan, we believe it makes sense to encourage coordination within the resolution college regarding the input that resolution authorities should provide independently to the supervisory college (recital 13). However, it is important to ensure that this input is done within the timeframe established in the EBA’s RTS on the assessment of recovery plans.
When preparing the group resolution plan, the college is asked to look at whether the banking group has a Single Point of Entry (SPE) or a Multiple Point of Entry (MPE) strategy, according to Article 14 (1a). This seems to imply that SPE and MPE are mutually exclusive, which is not necessarily the case. A banking group with an SPE strategy might have to resolve a subsidiary separately in specific circumstances. Therefore, we would recommend deleting this reference and keep only: “discuss preliminary proposal on the resolution strategy for the group”.
