We broadly agree with the approach but highlight a number of observations and reservations in our detailed comments attached. In particular, we would suggest that any EBA guidelines on valuer independence leverage existing procedures which other global regulators will already have confirmed meet their requirements. In addition, we would suggest that the issue of a valuer’s competence is dealt with as a necessary pre-condition of appointment, but separate from the concept of independence.
Any time limits should be linked to a discussion on the materiality of any previous involvement with the institution subject to valuation and threats to the objectivity of the valuer. Hence, there should be consideration of the specific valuation services offered and other relationships with the institution. It is not clear why the timeframe for the provision of valuation services is inconsistent with the one year period for the provision of audit services.
In our opinion and experience, the administrator (temporary or otherwise) will need different skills from a valuer and both roles would unlikely to be capable of being fulfilled by the same person. Whilst this will differ within the various member states, we would typically expect the administrator to be a natural person or named individual. If they are supported by a large organisation, then valuation specialists from within that organisation could fulfil the independent valuer role, although industry practice would also suggest separation of these two roles to ensure independence.
As noted in our response to Question 2, there should be consideration of any historic provision of valuation series and, in particular, if the valuer has acted in an advocacy role for the institution which might affect their objectivity and hence ability to perform an independent valuation role under the European Union Bank Recovery and Resolution Directive
We are in broad agreement. However, as noted in our response to Question 1, we would suggest that the issues of technical competence, expertise and resources are dealt with separately from considering the independence of the valuer. In addition, and from a practical perspective, an outright ban on the use of 3rd parties to assist in the valuation, especially in respect of a unique asset class, may frustrate the ability of the appointed valuer to complete their duties in full.
Viral Desai