EBA highlights the importance of data and information preparedness to perform a valuation for resolution

10 March 2020

  • Enhancing institutions’ preparedness in business as usual to swiftly provide data and information contributes to the achievement of resolution objectives and to the effectiveness of resolution actions.
  • The EBA’s approach to institutions’ preparedness is balanced and proportionate.
  • The EBA’s approach relies on the combination of institutions’ internal data aggregation capabilities and internal valuation models suitable for valuation for resolution.

The European Banking Authority (EBA) published today the Chapter on how resolution authorities should assess institutions’ management information systems, in the context of the resolvability assessment, to ensure that data and information are swiftly provided to support a robust valuation for resolution  (valuation MIS). This Chapter, which is part of the EBA Handbook on valuation for purposes of resolution, aims at enhancing institutions’ preparedness in business as usual to support a timely and robust valuation in case of resolution.

The EBA approach to valuation MIS embeds the proportionality principle since it relies, as far as possible, on the institutions’ internal capabilities, intended as a combination of internal data aggregation capabilities and internal valuation models that are suitable for the valuation for resolution. The Valuation MIS approach is complemented by a data dictionary for benchmarking purposes, which does not introduce any reporting obligation and is expected to be used by institutions to perform a self-assessment of the internally available data and information. The results of the self-assessment will form the basis of a dialogue between the institution and the resolution authorities in the context of the resolvability assessment, to calibrate the valuation MIS requirements.

Legal basis and next steps

The adoption of the MIS Chapter relies on Article 29(2) of Regulation (EU) No 1093/2010 establishing the EBA. The Chapter, like the whole Handbook, is addressed to EU and national resolution authorities, and whilst it is not binding and not subject to comply/explain, it aims at fostering the convergence of resolution practices across the EU to ensure a level playing field.

 

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Franca Rosa Congiu

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