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?
We acknowledge that the EBA proposal regarding a harmonisation of reporting requirements and to promote and review best practices, is, as stated, an attempt to take the principle of proportionality into consideration. Given the fact that even small and medium sized institutions that were previously wholly exempt from the requirement to provide information on their resolution planning will now be included in the scope of application of reporting, we cannot rule out a need to clarify the application and implementation of new reporting requirements.
Having said that, we request clarification of the following points:
- Specification, in Annex II, Section II.8.1 General instructions, regarding under which conditions – ideally providing specific examples – the core business lines and their essential services are to be reported.
- Clarification as to the extent to which Annex II and the EBA templates will, after being finalised, be adjusted to align with SRB requirements on the Data Collection Exercise, or to what extent these requirements will be replaced by the EBA requirements.
- Clarification as to what extent, after the introduction of this expanded EBA report, there will, as of 2026, no longer be a requirement to submit existing SRB reports (LDR, FMI, CF).
- Clarification that the new reporting requirements listed in this ITS also fulfil the SRB reporting requirements for calculating contributions to the Single Resolution Fund (SRF) and that no further data requirements will be put into place.
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…?
NA
Question 3: Do the respondents identify any discrepancies between these templates and instructions and the determination of the requirements set out in the underlying regulation?
NA
▪ specify which element(s) of the proposal trigger(s) that particularly high cost of compliance
NA
▪ explain the nature/source of the cost (i.e. explain what makes it costly to comply with this particular element of the proposal) and specify whether the cost arises as part of the implementation, or as part of the on-going compliance with the reporting requirements
NA
▪ offer suggestions on alternative ways to achieve the same/a similar result with lower cost of compliance for you
NA
i. How does this change impact your organisation’s ability to report resolution data in a timely manner while still retaining data quality?
While it seems true, at first glance and in principle, that changing the submission deadline from 30 April to 31 March every year will give resolution authorities more time to assess the data, this will result in significant duplicate efforts caused by a predictable need to update the reports on the part of the banks. This is because, as a general rule, final annual financial statement data is not available by the end of March (not to mention that the creation of reporting documents must begin in advance of the submission deadline). As such, the institutions would have to submit reports with preliminary figures; it would thus be practically impossible to avoid submitting corrections at a later date. An earlier submission deadline is thus inefficient, both from the perspective of the resolution authorities and from the perspective of the reporting institutions. The authorities would also have to check everything twice. Neither side has anything to gain from this proposal. In addition, we would like to point out that the resources required to create the EBA/CIR reports are already integrated into annual financial reports and therefore will not be available or fully available for the EBA/CIR report. An earlier submission deadline thus represents a significant operative challenge for the institutions. We therefore suggest, in the interest of both the resolution authorities and the institutions, that the submission deadline continue to be set for 30 April each year.
i. Do you have any comment on the changes in the definition of the RLE threshold, including the absolute threshold of 5 billion EUR?
NA
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?
NA
ii. Do you see an issue in the ability of the group to identify the resolution group to which each entity reported in the organizational structure belongs?
NA
i. Are the data-point definitions provided for reporting of the Carrying Amount sufficiently clear?
NA
ii. Do the revised data points for the reporting of Own Funds by Investment Firms better correspond to the reporting obligations for these types of Institutions? If not, please elaborate what changes you deem appropriate.
NA
iii. Do you anticipate any difficulties in providing the additional data required for the reporting of intragroup financial connections (for liabilities excluded from bail-in)?
NA
iv. Do you see merit in providing additional clarification about any data-point definition existing in the previous version of the CIR on Resolution Reporting? If so, for which specific data points?
NA
i. Do you have questions on how the new instructions on Onboarding Capacity should be interpreted for your organization?
We have no specific questions on the – in our opinion highly generalised – requirements for determining onboarding capacities. In our experience, however, institutions require more specific model assumptions for estimating appropriate onboarding capacities in order to ensure that the transmitted results can be compared by the resolution authorities and aggregated if necessary.
ii. Do you find the availability of a comments section useful to explain your assessment of the critical functions? Would you suggest another means of doing this, and if so, what?
See answer to point (i)
i. Do you see any issue in identifying “relevant services” as defined in the revised ITS?
Comments on “Z 08.01— Relevant services (SERV 1)”
Column 0060 Code: We understand the EBA’s reasoning in wanting to receive a LEI code for external contractual partners. However, the SRB has not yet requested any such information. As such, this requires integrating new data sources, which means implementation will be more complex. Implementation may also take longer. We therefore suggest forgoing this data point or allowing for reporting of alternative codes. These comments also apply to Column 0070 Type of Code.
Column 0150 Resolution Resilience features: The EBA proposes four characteristics. We suggest that N/A be reported not just for intra-entity group services but also for inter-group services. Internal group contracts (e.g. agency agreements) should not be required to exhibit “resolution resilience features”. Here, it should be appropriate to have a process with which these agreements can be ad-hoc designed as “resolution resilient” in the event of resolution.
Column 0160 Business Reorganization Plan (BRP): In our opinion, there is no need to collect this data, as the subject of BRP is already included in Column 0150. If the EBA disagrees, we ask for an explanation as to why this data should be reported in addition to Column 0150.
Comments on “Z 08.02— Relevant services mapping to operational assets (SERV 2)”
Column 0080 Contract ID: We fail to understand why there is a need to report a contract ID. N/A should also be a valid answer here. There are some configurations (e.g. “owned) for which there is no contract ID or for which an entry would not be expedient. Furthermore, the fields 0090 to 0120 would also not be reported.
ii. Do you think that that the data request on relevant services, as covered in the revised ITS, is sufficiently clear?
Do the amended EBA requirements (in particular template Z 08.XX) negate the requirement to create/submit deliverables for dimension 4 (in particular the service catalogue and contract database)?
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?
NA
i. Is the definition of “substitutability” provided in the new reporting on Alternative CCP providers (Z09.04 c0030) sufficiently clear? If not, what clarifications do you think would be necessary?
NA
ii. Are there additional or modified data points that you propose to include in Z09.03 to adequately capture the activity of the reporting entity with FMI service providers?
NA
iii. Are the instructions across Z09.01-Z09.04 sufficiently clear and detailed, and if not, what clarifications do you think are necessary and where?
NA
i. Are the data-point definitions provided for reporting of the Granular Liability Data sufficiently clear? If this is not the case, for which data points would you require additional clarifications?
The "Type of Liability” column for "Z10.06 - Secured Finance, excluding intragroup (LIAB-G-6)" has not yet been defined in "Annex II (Instructions)". We would appreciate clarification and/or additional information in the Guidance.
General comments
We would like to thank the EBA for giving us the opportunity, in the form of this consultation, to comment on the planned changes to reporting on the provision of information for the purposes of resolution plans. The EBA proposals for amending the specific reporting requirements have been made at a time in which European legislators have not yet come to a final decision on the specifics of the European Single Resolution Mechanism (SRM). The relevant proposed legislation (CMDI Review) includes significant changes to the structure of the SRM. A conclusive evaluation of the potential effects these changes will have on the German banking market is not yet possible. However, there is already a clear trend towards expanding the European resolution mechanism at the expense of national deposit and guarantee schemes. We find it doubtful that this will help to achieve the stated goal of improving stability on the banking market.
As we understand it, the Draft ITS from the EBA introduces, under the category “Institutions that are not part of a Group” and “Liquidation entity not subject to simplified obligations”, a category of institutions that has not previously been subject to reporting requirements. According to current legislation, national resolution authorities are responsible for creating resolution planning and evaluating the resolvability of businesses or groups that are not already supervised by the Single Resolution Board (SRB). When creating these resolution plans, the national resolution authorities decide whether or not institutions are to be subject to simplified obligations. In particular, the resolution authorities evaluate whether an institution can credibly and feasibly be resolved via liquidation within the framework of normal insolvency proceedings. The resolution authorities also decide, on an individual basis, whether there is a need for the institution to retain an additional sum for recapitalisation. They also determine the minimum requirements for own funds and eligible liabilities. In addition, resolution authorities check to what extent there is a need for provision of information in order to create resolution plans for institutions, and to what extent this is unnecessary. In our opinion, individual evaluation by the resolution authorities has been proven to work.
We wholly reject the idea that institutions that qualify for insolvency according to national resolution authorities but are not subject to simplified obligations should be required to provide blanket information on resolution planning.
On the one hand, the number of LSIs for which resolution via liquidation within the framework of regular insolvency proceedings is considered both credible and feasible, but which are not subject to simplified obligations, is relatively low, at around 55 institutions across all of Europe (see SRB, “SMALL AND MEDIUM-SIZED BANKS: Resolution Planning (…) for LSI”, 2024, P. 13). It is clear, on the German market, that there are no significant new insights to be gained that are currently not considered essential by resolution authorities. In particular, it is unclear why there is a need to collect regular aggregated liability data on institutions subject to insolvency proceedings, even though there are no MREL requirements for these institutions. If the resolution authorities determine a need for additional information in order to create resolution plans for institutions, they already have the authority to require that this information be provided.
On the other hand, we recognise that the EBA, when determining the scope of the data, is attempting to satisfy proportionality by reducing the scope of data that institutions subject to insolvency proceedings must provide to resolution authorities. However, in our experience, the effort required to compile, in particular, the Liability Data Report, the Critical Functions Reports and the FMI report is especially high for affected institutions. And yet it is these specific reports which are to become part of the reporting for liquidation entities not subject to simplified reporting requirements. We do not consider the cost/benefit ratio to be appropriate in this case.
These criticisms aside, we strongly welcome the fact that liquidation entities approved for simplified obligations are generally not subject to reporting requirements pursuant to the new ITS. This clarifies both current practice and the legal position re: proportionality. This simplification must then also be taken into account in downstream data requirements, such as SRB reporting as related to contributions to the Single Resolution Fund (SRF). The data collected by the SRB on ex-ante contributions for 2024 included, for the first time, data on the MREL risk indicator, based on resolution planning reporting. Institutions not required to complete such reporting were asked to transfer the data on a “best-effort-basis”. The current consultation now specifically clarifies, for this area of application, that liquidation entities subject to simplified obligations are (still) not required to report on resolution planning. Thus, argumento e contrario, proving that these institutions do not have the relevant data at hand and therefore cannot provide it for other data requirements, such as those of the SRB.