11 July 2014
The European Banking Authority (EBA) launched today a consultation on draft Regulatory Technical Standards (RTS) setting out the general criteria against which a valuer should be assessed to determine whether (s)he complies with the legal requirement of independence when performing valuation tasks with respect to a bank under resolution. These RTS are part of the EBA's work to promote a consistent and coherent approach to bank resolution across the European Union and will contribute to the completion of the Single Rulebook in the EU banking sector. The consultation runs until 11 October 2014.
The Banking Recovery and Resolution Directive specifies, among other things, that independent valuers shall be appointed to perform valuations of the assets and liabilities of institutions to inform the decisions on whether an institution is failing or likely to fail, as well as on the scope and size of resolution measures to be taken, and whether the "no creditor worse off" principle has been met. In this respect, the proposed RTS identify the circumstances under which a person will be deemed independent from both the resolution authority and the institution or entity subject to the valuation.
In particular, these RTS set forth general criteria to be used in order to determine, on a case by case basis, whether a valuer complies with the legal requirement of independence. For this purpose, the RTS also specify that possible relationships between the valuer and the creditors and shareholders of the institution may affect the requirement of independence. The general criteria for the assessment of independence are complemented by specific situations under which the valuer cannot be deemed independent.
Moreover, as a precondition for being considered independent, valuers need to have the qualifications and expertise required in the fields of valuation, accounting and banking, as well as sufficient capacities to perform the task without depending on third parties, namely the resolution authority and/or the institution.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 11 October 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise. A public hearing will take place at the EBA premises on 16 September 2014 from 10:00 to 13:00 UK time.
The proposed draft RTS have been developed on the basis of Article 36(14) of Directive 2014/59/EU (BRRD), which mandates the EBA to identify the circumstances under which a valuer is to be considered independent from any public authority, including the resolution authority, and the institution.
The EBA shall submit the draft RTS to the Commission by 3 July 2015.