The EBA publishes its first Report on the implementation of the European Resolution Examination Programme
With a view to fostering convergence in resolution practices, the European Banking Authority (EBA) today published for the first time a Report which monitors the progress made by resolution authorities in embedding the key topics identified in the EBA’s 2022 European Resolution Examination Programme (EREP) into their respective priorities and resolution colleges in 2022. The Report observes that, overall, resolution authorities incorporated the work priorities set by the EBA, with MREL monitoring being a key focus. The EREP priorities set for 2024 mainly confirmed the areas of focus set for 2023 although with updated specific elements and extension of the operationalisation of the bail-in tool to cover the operationalisation of the resolution strategy more generally.
The EBA observed that the MREL monitoring was a key activity of focus for all resolution authorities, reflecting the criticality of this element to ensure feasibility of potential resolution actions. As of December 2022, resolution authorities were, overall, confident that most banks would reach their final requirements within the required deadline.
2022 was generally the first year when the MIS for valuation was considered high priority area, with most activities focused on initial preparatory tasks. While resolution authorities expect that most banks will have adequate capabilities in place by 2024, this may require specific IT system improvements and identification and/or recruitment of staff with appropriate experience.
In 2022, banks were requested to produce a first set of specific deliverables in the area of liquidity in resolution, focusing on identification and mobilisation of collateral. Strategies and actions suggested by institutions to support liquidity in resolution remained limited and mostly focused on accessing central bank facilities.
While college discussions positively evolved towards more practical aspects aimed at improving the ability to deal with a crisis event, the EBA believes that there is still space for improving the depth and quality of college interactions and also regarding the operationalisation of variant resolution strategies.
Note to the editors and next steps
According to Articles 25 and 29 of its founding Regulation, the EBA shall contribute to, and participate actively in, the development and coordination of effective, consistent and up-to-date recovery and resolution plans for financial institutions and shall also develop and maintain an up-to-date Union resolution handbook on the resolution of financial institutions in the Union.
The EBA proactively drives the convergence in resolution practices through the selection of topics deserving European traction based on its expertise in policy development and practical experience of resolution authorities, and its role in resolution colleges by establishing yearly the EREP. The EBA then assesses whether and how the selected topics are covered in resolution authorities’ priorities and activities.
The EBA set out the resolution priorities for 2023 in October 2022 following to monitor how they were followed by the resolution authorities once the period ends. In the current resolution convergence Report the EBA set the priorities for 2024
Resolution Convergence Report 2023 - EREP
(1.42 MB - PDF) Last update 3 August 2023
Franca Rosa Congiu