Page 37 - EBA 2015.1815 Annual report 2014 web 2

Basic HTML Version

2 0 1 4 a n n u a l r e p o r t
Final draft ITS on joint decisions on
prudential requirements (internal models)
These technical standards enable the con-
solidating supervisor and the relevant com-
petent authorities to cooperate and to reach
joint decisions on the approval of internal
models in a timely and efficient manner when
deciding whether to grant permission to use
internal models for credit, counterparty, op-
erational and market risk for the calculation
of own funds requirements. They specify the
joint decision process and cover aspects of
home-host cooperation e.g. assessment of
completeness of the application, preparing
the joint decision timeline, and drafting the
joint decision document.
Contributing to the EU framework on
bank recovery, resolution and deposit
guarantee schemes
In 2014 the EBA focused on the recovery and
resolution regulation. This was in line with the
additional mandates and tasks given to the EBA
by the adoption of the BRRD and regulation es-
tablishing the SRM establishing the second pil-
lar of the Banking Union. As a result the EBA
had to develop a number of regulatory products
under each recovery and resolution stage (Fig-
ure 5).The EBA’s objectives in this respect are
to conclude the Single Rulebook and to ensure
greater harmonization of rules across the Sin-
gle Market. For implementation of the BRRD, a
number of new regulatory products have to be
prepared by mid-2015. The EBA is working on
around 40 EBA guidelines, RTS, ITS and provid-
ing advice to Commission regarding delegated
acts. The principle of proportionality was cen-
tral when preparing regulatory products on this
topic, as this principle recognizes the impor-
tance of the diversity of the EU banking system
and explicitly refers to the need to develop and
apply rules in such a way that this diversity is
acknowledged and preserved.
In 2014, the EBA finalised regulatory products
relating to recovery planning and resolution
planning, therefore, the Single Resolution
Board (SRB) and national resolution authori-
ties were able to start their activities from 1
January 2015 in a more harmonised environ-
ment within the Single Market and with the
most important regulatory products already in
place. Moreover, these harmonised rules will
ensure greater cooperation and coordination
between competent and resolution authori-
ties and will help them to overcome obstacles
to the application of resolution actions on a
cross-border basis, also with regard to third
Simplified obligations in relation to recovery
and resolution planning
In order to secure proportionality when de-
termining the nature of the obligations under
the BRRD in relation to recovery and resolu-
tion planning and resolvability assessments
for institutions, competent and resolution
authorities should take into consideration the
impact the failure and subsequent winding
up of an institution under normal insolvency
proceedings could have on financial markets
and other financial bodies. For this purpose,
the BRRD details a series of criteria against
which institutions should be assessed.
To complement the BRRD criteria, the EBA
has prepared guidelines further specifying
how EU authorities should assess whether an
institution is eligible for simplified obligations
in order to promote convergence of practices
between competent and resolution authorities
through a common framework, in line with the
principle of proportionality.
The guidelines are complemented by the EBA’s
ITS to specify uniform formats, templates and
definitions for the identification and transmis-
sion of information to the EBA on how authori-
ties have applied simplified obligations. The
Figure 5: Recovery and resolution stages
Regulatory products
have been finalised
Regulatory products
have been finalised
Regulatory products
under development
Regulatory products
under development
Early intervention
Resolution planning
Recovery planning