EBA published its final resolvability testing Guidelines
The European Banking Authority (EBA) today published its Guidelines addressed to institutions and resolution authorities on resolvability testing. The Guidelines aim to set-out a framework to ensure that resolvability capabilities developed to comply with the resolvability and transferability Guidelines are fit for purpose and effectively maintained.
Resolution authorities and banks are now moving to resolvability testing following several years of policy development by authorities and policy implementation by institutions. Both now need to ensure that the arrangements put in place to support the execution of the resolution strategy are adequate and that institutions will be ready to use those in the run-up to and upon entry into resolution.
The Guidelines also aim to promote the involvement of firms into the resolvability assessment process and increase their ownership of resolvability. As such, as a starting point, the Guidelines require institutions to submit a resolvability self-assessment at least every two years, to set out how they meet the resolvability and transferability capabilities and how they have gained assurance of their adequacy. The first self-assessment is expected by year-end 2024.
On the basis of this self-assessment, the Guidelines require authorities to develop testing programmes to gain assurance of firms’ resolvability, covering three years, so as to provide banks with sufficient visibility. The first multi-annual testing programme is expected by year-end 2025.
Finally, the Guidelines require the most complex banks to develop a master playbook to ensure a holistic approach to resolution planning. The first master playbook should be submitted by year-end 2025.
A presentation summarising the key points of the Guidelines, the guidelines will be translated in all EU official languages and a consolidated version of the resolvability Guidelines now including the chapter on testing will be made available as well for information.
Note to editors
The EBA has started several initiatives aiming to harmonise the approach to resolvability at EU-27 level and ensure the implementation of international standards on the matter. These Guidelines complement the already published Guidelines for institutions and resolution authorities on improving banks’ resolvability and the Guidelines on transferability as well as Guidelines to authorities for them to publish their approach to bail-in.
Guidelines amending Guidelines on improving resolvability for institutions and resolution authorities
(462.95 KB - PDF) Last update 25 August 2023
Background and key mesures
(798.68 KB - PDF) Last update 13 September 2023
Franca Rosa Congiu