Page 38 - EBA 2015.1815 Annual report 2014 web 2

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E U R O P E A N B A N K I N G A U T H O R I T Y
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EBA will use this information to assess how
the principle of proportionality has been ap-
plied by competent and resolution authorities
for the purposes of informing the EBA’s report
to the European Parliament, the Council and
the Commission on any divergences of ap-
proach between authorities in terms of the
assessment of institutions against the criteria
(taking account of the EBA’s guidelines) and
the nature of the simplified obligations im-
posed in each case. The report must be sub-
mitted by 31 December 2017.
Recovery planning
Regulatory products relating to recovery plan-
ning were one of the main priorities during
2014. These products are essential for nation-
al competent authorities, the SSM and espe-
cially market participants in order to prepare
sound recovery plans. They should ensure a
common approach across the EU regarding
the assessment of recovery plans and so to
facilitate joint assessments of group recovery
plans by different competent authorities.
In 2014 the EBA:
(i) finalised RTS on the content of recovery
plans which provides details on the key
parts and information that must be in-
cluded in recovery plans to be drafted by
financial institutions;
(ii) finalised RTS on the criteria which compe-
tent authorities should apply when assess-
ing the recovery plan of an institution or a
group developed by financial institutions;
(iii) produced guidelines on the range of sce-
narios to be used in recovery plans;
(iv) published a consultation paper on draft
guidelines on recovery plans indicators
which identify the minimum qualitative
and quantitative indicators that institutions
should include in their recovery plans.
The EBA also finished the public consultation
on the RTS and guidelines specifying the con-
ditions for group financial support and on the
ITS on the form and content of disclosure of
financial support agreements. The proposed
RTS and guidelines establish a clear harmo-
nised legal framework to facilitate support
within banking groups, if one of its members is
in financial distress, and to enhance legal cer-
tainty by overcoming existing legal obstacles.
In particular, the guidelines specify the criteria
for authorising a temporary non-compliance
with prudential requirements of the provid-
ing entity. In the ITS, the EBA ensures a high
standard of transparency with regard to sup-
port agreements so that creditors of the group
are in a position to make informed investment
decisions and assess the consequences of the
agreement on individual subsidiaries and the
group as a whole.
Resolution planning
Resolution planning was a second pillar of
the EBA’s work during 2014. The EBA finished
RTS’ on resolution planning and resolvability
assessment, which describe content and the
categories of information which should be
included in a resolution plan, and the issues
which need to be considered when assessing
resolvability. This assessment is a linchpin of
the BRRD, and the common framework pro-
vided by the RTS will ensure that resolution
authorities across the EU all consider how re-
solvability is affected by, for example, the avail-
ability of financial resources (including mini-
mum requirement for own funds and eligible
liabilities (MREL)) or of information in a simi-
lar way. Proportionality is ensured both by the
simpler plans required for less complex banks
and the possibility to apply simplified resolu-
tion planning obligations to certain institu-
tions which meet the criteria specified in the
aforementioned EBA guidelines. Other Guide-
lines issued alongside the RTS further speci-
fies the circumstances under which resolution
authorities can require measures to overcome
obstacles to resolvability that might have been
Figure 6: Resolution planning
Content of
resolution plan / strategy
Measures to
remove
impediments
to resolvability
Assessment
of resolvability