Resolution authorities and banks should now move to the resolvability testing following several years of policy development by authorities and policy implementation by institutions.
The European Banking Authority (EBA) today launched a public
consultation on its draft Guidelines addressed to institutions and
resolution authorities on resolvability testing. The Guidelines aim to
set-out a framework to ensure that resolvability capabilities developed
to comply with the resolvability and transferability Guidelines are fit
for purpose and effectively maintained. The consultation runs until 15
February 2023.
Resolution authorities and banks should now move to the resolvability
testing following several years of policy development by authorities
and policy implementation by institutions. Both now need to ensure that
the arrangements put in place to support the execution of the resolution
strategy are in fact adequate and that institutions will be ready to
use those in the run-up to and upon entry into resolution.
The Guidelines are also aiming to promote the involvement of firms
into the resolvability assessment process and increase they ownership of
resolvability. As such, as a starting point, they propose that
institutions submit a resolvability self-assessment annually where to
set out how they will meet the resolvability capabilities and how they
have gained assurance of their adequacy.
On the basis of this self-assessment, the Guidelines are proposing
that authorities develop multi-annual testing programme so as to gain
assurance of firms’ resolvability while providing sufficient visibility
to banks.
Finally, for the most complex banks, the Guidelines are proposing to
have them develop a master playbook to ensure a holistic approach to
resolution planning.
EBA
© EBA
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