Response to consultation on draft Implementing Technical Standards overhauling the EBA resolution planning reporting framework

Question 1: Are the instructions and templates clear to the respondents?

It is not clear whether it is planned still to provide the SRB LDR report (T-templates) and to waive the respective EBA Resolution Planning templates (Z-templates from CIR) or if it is now planned to submit the EBA Resolution Planning templates and skip the SRB LDR templates.

Question 2: Do the respondents need further clarification to understand which of the minimum reporting obligations would apply to their specific profile (Resolution entity, Liquidation entity, RLE, non-institution…?

Yes. Further aspects are not clear:

1) Which minimum reporting obligations would be relevant for entities, which are part of the group, but not part of resolution group and not a member of the banking union (as outside EU) (e.g. subsidiary of a Croatian bank in Montenegro, whose ultimate mother is in Austria)?

2) Whether the thresholds of 2% and 5bn assets also applicable for liquidation entities not subject to simplified obligations which we recommend specifying in the ITS. Otherwise, the reporting burden for liquidation entities that are not subject to simplified obligations would be extremely high.

▪ specify which element(s) of the proposal trigger(s) that particularly high cost of compliance

We see certain requirements that trigger higher additional costs:

The templates on Other Financial Liabilities as well as “value of transactions of which recurrent (in CFR)” will require major modifications to existing reporting infrastructure as well as significant working time of the reporting staff.

On Z08.xx templates and SRB’s requirement on service catalogue and contract repository we believe that the goal of relieving entities from parallel data collections coming from different authorities is only fulfilled if the SRB’s requirement on service catalogue and contract repository can be replaced by the Z08.xx templates (or vis versa). (see also answer to question 10c)

Ad Financial liabilities: We oppose the requirement to report these on an item-by-item basis. Beside the additional effort, the requirement to identify specific counterparties also increases security/privacy risks. In our opinion, the resolvability (and its assessment by the authority) is ensured with aggregated data and the detailed information will not support this additionally.

i. How does this change impact your organisation’s ability to report resolution data in a timely manner while still retaining data quality?

We see the proposed change to move the reporting deadline from 30 April to 31 March very critical. This adjustment would shift the deadline into the first quarter of the year, a period in which institutions are already heavily occupied with numerous other regulatory and operational requirements, such as year-end financial reporting and disclosure obligations.

The additional workload during this already demanding time frame poses the risk of compromising data quality. In practice, audited data is often available relatively late and usually not in the first quarter, leaving insufficient time for the completion of templates and proper data quality assurance. Shortening the deadline could result in inaccurate or incomplete reporting which is not in the interest of either the institutions or the resolution authorities.

From our perspective, the earlier submission of data does not offer significant added value for resolution authorities as the quality of the reported data would not necessarily improve, and the earlier submission would not substantially extend the time available for authorities to analyze the data. On the contrary, the increased time pressure could lead to a deterioration in data quality which could undermine the effectiveness of resolution planning.

In addition, we suggest considering dependencies between reporting objects and the considerable effort involved in collecting and providing additional data resulting from the new requirements. Apart from the regular reporting deadlines, experience shows that the publication of the technical packages for new EBA ITS is only publicly available in the final version after a substantial delay. This shortens the implementation and testing period as well as time for analysis, with negative effects on the quality of the reporting data. Implementation on the basis of interim drafts is associated with risks and multiple efforts.

For these reasons, the shortening of the submission deadline cannot be supported. We advocate for maintaining the current reporting deadline in order to allow sufficient time for preparation and testing. Reducing the burden on institutions and ensuring high data quality should be the priority to guarantee a smooth and effective resolution planning process.

Thus, the remittance date of 30 April should be kept.

i. Do you identify any issues with expanding the scope of Z01.01 to all entities in the group, bearing in mind that this report would only be requested at the level of the Group?

According to our understanding, Z01.01 has to be provided only on the level of the ultimate union parent undertaking (which is the CRR scope of consolidation) if a group comprises more than one resolution entity. The template should contain all entities of the IFRS scope of consolidation. Therefore, it is not expected to report Z01.00 also on Resolution Group level. A specification with this respect would be welcome and provide more clarity. 

International branches should be reported in separate rows. It is not clear which attributes should be filled in for the branches. Also TEM, TREA, Total Assets? Before/after Intra-entity-elimination?

Furthermore, we are of the opinion that thresholds to define Relevant Legal Entities should apply on Resolution Group level of Resolution Groups of EU member states in addition to the CRR scope of consolidation (see Article 1). A clarification here would also provide more clarity.

i. Do you see any issue in identifying “relevant services” as defined in the revised ITS?

Ad Z07.03 – c0010-0030 Core Business Line: The strict limitation of CBLs to the provided list (“The core business line shall be one of the business lines listed below”) would in future include also “non CBLs” as “CBLs”, e.g. Corporate might include different subcategories (SME, Large Corporate, Public Sector, Real Estate, ..) of which only single ones would be CBLs acc. applied indicators of Article 7(2) of Commission Delegated Regulation (EU) 2016/778. Beside a potential increase in essential services, it would especially lead to the requirement to continue additional non-core BLs in case of resolution (and to reflect that also in a business reorganization plan and resolution strategies (esp. for separation).

Additionally, we suggest defining CBLs according bank internal used and external reported segmentation (IFRS  8 “Information is based on internal management reports, both in the identification of operating segments and measurement of disclosed segment information.”)

Proposal: We suggest retaining the wording of “The business line shall be framed within one of the following” and including in Z07.03 a mapping of bank’s used internal Core BLs to the list provided in Annex II. This would enable the bank to use bank’s BL segmentation / definition to assess CBLs and limit the continuation of BLs in case of resolution to the core one. Whereby the mapping still provides the authority with information needed.

Ad Z08.01 – c0130 Contract ID: A reported service might (and it will be in most of the cases) underpinned by more than one contract. Displaying each relevant contract in an own row will conflict with the requirement of “General instructions item 7)”. The combination of values reported in columns 0010, 0020, 0040, and 0060 of this template forms a primary key which has to be unique for each row of the template.

Proposal: We suggest including c0130 to the combination to form a primary key.

Ad Z08.04 – c0050 Relevance for the Critical Function: Acc. Annex I of “OPERATIONAL GUIDANCE ON OPERATIONAL CONTINUITY IN RESOLUTION – November 2021 update” (13) degree of criticality [of services] should be assessed as high / medium / to be assessed. The introduction of a more detailed assessment (high / medium high / medium low / low) requires additional effort (change in the IT system, inputs required from service providers etc.).

Proposal: We suggest retaining the assessment with high / medium / to be assessed to avoid additional technical efforts.

ii. Do you think that that the data request on relevant services, as covered in the revised ITS, is sufficiently clear?

Ad Z08.01 – c0010 Service type: No. It is not clear which services would be expected to be reported under 1.3 “external communication”. Is it purely linked to external communication related to HR? Other “types” of external communication as Investor relations, Brand Management, Marketing would - in our view - not fit to the category 1. “Human resources support”, but should be reflected in an own Level 1 category (or under 11 “Other”).

Ad Z08.01 – c0170 Alternative mitigation actions: In line with “OPERATIONAL GUIDANCE ON

OPERATIONAL CONTINUITY IN RESOLUTION – November 2021 update” (42ff) we would understand that alternative mitigations actions have only to be explored if a contract is not assessed as resolution resilient, i.e. c0150 and/or c0160 is “no”. Therefore, we would expect to use “n/a” in c0170 for all cases, where c0150 or c0160 are marked as “yes” (as if the contract is resolution resilient, no other mitigation actions have to be applied).

Ad Z08.02 – c0040 Type of assets: We suggest an additional type “Self-Service devices in branches & ATMs” as these assets are substantial assets for a Retail Bank.

iii. Do you see any overlap between this data request and related data requests on relevant/critical services raised by your Resolution Authority as part of the resolvability assessment?

Yes, up to now SRB requested various/same information on services (critical & essential) (esp. service catalogue and contract repository). Submission deadline was 31.12. each year. The alignment of the EBA request and SRB’s data request is highly appreciated, and it would be appreciated if the data delivery to SRB with submission date 31.12. can be replaced by the data delivery to EBA with submission date 31.3. or 30.4. Nevertheless, it should be noted, that SRB’s “OPERATIONAL GUIDANCE ON OPERATIONAL CONTINUITY IN RESOLUTION – November 2021 update” requires further minimum fields (see Annex I and Annex II), so that further alignment would be appreciated to be able to replace SRB’s reports (service catalogue, contract repository) by the EBA resolution reporting.