The Single Resolution Board today publishes a paper outlining its expectations for how banks engaging in mergers and acquisitions (M&As) can ensure resolvability.
Such transactions, in addition to prudential
and competition law implications, are highly likely to have consequences
for banks’ resolvability. Ultimately, well-designed and well-executed
transactions may enhance banks’ resilience and profitability and
strengthen their resolvability.
The SRB works closely with banking
supervisors on all such transactions, to ensure proportionality and
avoid duplication of efforts. As laid out in the SRB’s Expectations for Banks (EfB) policy[i],
any bank engaging in M&As or other corporate transactions should
contact the SRB to detail their intentions. This allows the SRB to
detect any resolvability concerns on time.
This publication
provides greater detail to banks on the information the SRB may need as
such cases progress. It also gives insights into the potential effects
on resolvability in selected areas, such as loss-absorption and
recapitalisation capacity, information systems, operational continuity
and access to FMI services and legal structure.
“Well-designed
bank mergers and acquisitions can strengthen resolvability. This
guidance brings greater clarity to how banks and the SRB can best work
together to achieve this.” – Elke König, Chair of the SRB.
[i] Principle 1.2 of the SRB Expectations for banks (EfB).
© Single Resolution Board
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