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These criteria will help institutions avoid a fragmented approach in providing information in recovery plans and gain a better understanding of the relevant supervisory expectations.
The EBA recommends that the coverage of entities in a group recovery plan be proportional to the relevance of the entities. For recovery planning purposes, entities should, therefore, be categorised as:
Different levels of information are identified for each category. The Recommendation provides also for an adjustment phase to ensure the smooth migration of recovery planning information currently available at the local level to the group level.
While the Recommendation does not interfere with the tasks and responsibilities of the home and host Competent Authorities under the Capital Requirements Directive (CRD) and Bank Recovery and Resolution Directive (BRRD), it is designed to limit requests for individual plans, based on an inadequate coverage of an entity in the group recovery plans. The Recommendation, therefore, aims at providing a common guidance to home and host supervisors, helping them to have better information at EU level and to ensure a smooth process in joint decisions.