EBA consults on the coverage of entities in banking group recovery plans

The European Banking Authority (EBA) launched today a consultation on its draft Recommendation on the coverage of entities in banking group recovery plans, which is aimed at defining common criteria to identify entities (subsidiaries and branches) that need to be covered in group recovery plans, and the extent of such coverage. Such criteria should help institutions avoid a fragmented approach in providing information in recovery plans, and provide a common guidance for home and host supervisors. The consultation runs until 02 June 2017.

 

The draft Recommendation envisages that the coverage of entities in a group recovery plan needs to be proportional, so that the amount of information will vary according to relevance of the entities. The EBA, therefore, recommends that – for recovery planning purposes - entities should be categorised as (i) relevant for the group, (ii) relevant for the economy or financial system of a relevant member state or (iii) not relevant for neither of the two. Different levels of information are identified for each category.  A transitional phase is included to allow the incorporation of available information from existing individual plans into group plans.

 

While the draft 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 is also designed to support the effective assessment of group recovery plans in the context of the joint decision process on Recovery plans.

 

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 02 June 2017.

 

All contributions received will be published following the close of the consultation, unless requested otherwise. A public hearing will then take place at the EBA premises on 20 April 2017 from 13.00 to 16.00 UK time.

 

The EBA has drafted this Recommendation on its own initiative in accordance with Article 16 of Regulation (EU) No 1093/2010. The draft recommendation elaborates on the existing legal frameworks established by the Capital Requirements Directive (CRD), the Bank Recovery and Resolution Directive (BRRD) and the EU Commission Delegated Regulation 1075/2016, and builds on the experience the EBA has gained through thematic reviews of recovery plans as well as through its regular attendance of several colleges of supervisors.