Consultation on draft regulatory technical standards on the content of resolution plans and the assessment of resolvability

The EBA launched today a consultation on draft Regulatory Technical Standards (RTS) on resolution planning. The RTS are part of the EBA’s work to promote a consistent and coherent approach to bank resolution across the European Union. The consultation runs until 9 October 2014.

Bank resolution can be a complex process, and so robust and credible resolution strategies and plans are needed in advance. The proposed RTS specify the contents of resolution plans drawn up by resolution authorities for individual institutions and groups as well as the criteria on which the resolvability assessment should be based. Common European standards in these areas are essential to facilitate effective cooperation and joint decisions between resolution authorities.

The RTS identify eight categories of information which a resolution plan should contain, and set out both general and specific requirements to be included in each category to ensure the preferred resolution strategy is achieved.

The RTS also detail the criteria on which resolution authorities should base their assessment of the resolvability of an institution or group.  For this assessment, the draft RTS propose a staged approach. First, resolution authorities should assess whether liquidation under normal insolvency procedures is feasible and credible. If this is not the case, they should identify a preferred resolution strategy, and then assess the feasibility and credibility of that strategy. The preferred resolution strategy may be identified either as a single-point-of-entry (SPE) – in which resolution powers are applied to the top of a group by a single national resolution authority - or “multiple point of entry” (MPE) - in which resolution tools are applied to different parts of the group by two or more resolution authorities acting in a coordinated way. The draft RTS propose criteria to enable the choice between these two options.

The draft RTS recognise the need for proportionality, which is addressed through the staged assessment process, through the inherently less complex resolution plans needed for less complex institutions, and through the possibility for Member States to apply simplified obligations to certain institutions. Forthcoming EBA Guidelines will expand on the criteria laid down in the Bank Recovery and Resolution Directive (BRRD) for applying simplified obligations.

Consultation process

Comments to these consultations can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 9 October 2014.

All contributions received will be published following the close of the consultation, unless requested otherwise. A public hearing will take place at the EBA premises on 18 September 2014 from 9:30 to 12:30 UK time.

Legal basis and next steps

The draft technical standards have been developed in accordance with Articles 10, 12 and 15 of Directive 2014/59/EU (BRRD), which mandates the EBA to specify the content of resolution plans for institutions and for groups, as well the criteria which resolution authorities should apply in the resolvability assessment.