On Wednesday 1 April, the Single Resolution Board (SRB), the European authority responsible for resolving systemically failing banking groups within the euro area banking union, presented its expectations regarding the ex ante planning that the banks in question should be doing to prepare for a potential resolution.
The document the SRB has published sets out in detail what the institutions in question must do to demonstrate that they are preparing for a potential financial crisis where they may be subject to a resolution in accordance with the provisions of the Bank Recovery and Resolution Directive (2014/59).
In their resolution plans, the banks must work on the following issues that will have to be addressed in a very short period of time if they fail: governance; loss absorption and recapitalisation capacity (MREL assets, operationalisation of ‘bail-in’ measures); liquidity and funding in resolution; operational continuity and access to financial market infrastructure services; information systems and data requirements; and communication.
These dimensions do not all have to be operational at the same time, particularly liquidity in the event of resolution, which will not be fully resolved.
To consult the document, go to: https://bit.ly/3aC2DRA (Original version in French by Mathieu Bion)