EBA publishes Guidelines on recovery plan indicators
- The Guidelines provide a common EU approach for the recovery plan indicators to ensure they can promptly signal a stressed situation and enable the institution to consider timely and effective recovery actions.
- The Guidelines include a minimum list of recovery indicators and focus on practical aspects such as calibration of the thresholds of recovery plan indicators and their monitoring.
- The key objective of the Guidelines is to strengthen the quality of the recovery indicators framework in order to ensure institutions’ effective crisis preparedness.
The European Banking Authority (EBA) published today Guidelines on recovery plan indicators. The Guidelines establish a common EU approach for developing the framework of recovery plan indicators, providing additional guidance on indicators’ calibration, monitoring and breaches notifications. The guidelines aim at strengthening the quality of recovery indicators framework and contributing to effective crisis preparedness of institutions.
The main objective of recovery plan indicators is to help institutions monitor and respond to the emergence and evolution of stress. The EBA first issued guidelines on recovery plan indicators in 2015 and decided to amend them based on practical experience acquired in recovery planning.
These Guidelines provide additional guidance on the calibration of thresholds of recovery indicators to ensure that recovery options are implemented early enough, so as to be effective. The Guidelines also emphasise the importance of constant monitoring of recovery indicators and timely notification of their breaches to supervisors. Lastly, the minimum list of indicators includes three new additional recovery indicators (MREL/TLAC, asset encumbrance and liquidity position) to the minimum list of recovery indicators and one of them (cost of wholesale funding) has been removed.
In accordance with Article 9(1) of the Bank Recovery and Resolution Directive (BRRD), a recovery plan should include a framework of indicators established by each institution with the aim of identifying the points at which the escalation process should be activated and to assess what appropriate actions referred to in the recovery plan may be taken.
These Guidelines have been developed under the mandate of Article 9(2) of BRRD. Since the development of the Guidelines in 2015 (EBA-GL-2015-02), significant practical experience in developing and assessing recovery plans has been acquired. Against this background, the EBA has concluded that, while limited amendments to the 2015 Guidelines were needed, it was necessary to introduce additional guidance on certain parts of the indicator framework. The 2015 Guidelines are therefore repealed at the same time as the publication of these Guidelines.
Final Report on Guidelines on recovery plan indicators
(451.61 KB - PDF) Last update 10 February 2022
Franca Rosa Congiu