EBA欧洲银行-EBA-Report-on-the-functioning-of-resolution-colleges-July-2018_17页_518kb

EBA Report on the Functioning of Resolution Colleges in 2017 Summary

Core Content

The European Banking Authority (EBA) published its first report on the functioning of resolution colleges in the EU during the 2017 resolution cycle. The report aims to monitor the progress of resolution colleges, identify areas for improvement, and increase transparency for stakeholders. It outlines the EBA's observations on the operational aspects, quality of discussions, and deliverables of the colleges.

Main Objectives and Scope

• Objective: To promote and monitor the effective and consistent functioning of resolution colleges across the EU.
• Scope: The report covers selected colleges from the 2017 cycle and the first quarter of 2018. It does not include resolution planning activities outside of resolution colleges.
• Focus Areas: Organisational aspects, quality of discussions, and deliverables such as joint decisions on resolution plans, resolvability assessments, and MREL.

Key Observations

1. Organisational Aspects

• Progress Achieved:

  • Most resolution authorities are in their third year of existence.
  • GLRAs (Group-Level Resolution Authorities) have dedicated significant time and resources to organising and running college meetings.
  • Host authorities have actively participated, contributing to the quality of discussions and achieving joint decisions.
  • Improved timelines for joint decisions, with clear communication of start dates and deadlines.

• Areas for Improvement:

  • Annual Cycle: 5 out of 13 monitored colleges were postponed to Q1 2018, leading to some meetings falling outside the 12-month window.
  • Minutes Circulation: 9 out of 13 GLRAs failed to circulate minutes promptly.
  • Information Sharing: There was a need for better circulation of supporting documents and information before meetings.
  • Timely Contributions: Host authorities were encouraged to meet deadlines to reduce the burden on organising authorities.
  • Third-Country Colleges: No formal joint decisions were made in these colleges, though some discussions were initiated.

2. Level and Quality of Interaction

• Progress Achieved:

  • Improved interaction and engagement among authorities.
  • More focused and in-depth discussions, with host authorities actively challenging and questioning the GLRA and other participants.
  • Pre-college bilateral engagement contributed positively to the quality of discussions.

• Areas for Improvement:

  • Recovery-Resolution Interplay: Limited in-depth discussion on the interlinkages between recovery and resolution plans.
  • Presentation Quality: Variability in the quality of presentations by host and competent authorities.
  • Bank Participation: Some banks did not provide sufficient detail or relevant information in their presentations.

3. College Deliverables

a. Joint Decisions on Resolution Plans and Resolvability Assessments

• Progress Achieved:

  • Most colleges achieved joint decisions on resolution plans and resolvability assessments.
  • Plans became more comprehensive and detailed, especially regarding operations in different jurisdictions and identification of critical functions.
  • Progress was noted in areas like loss-absorbing capacity, access to financial market infrastructures, and operational continuity.

• Areas for Improvement:

  • Operational Aspects: Some resolution plans still require improvements in key areas like bail-in execution, funding, and liquidity.
  • Critical Functions: Discrepancies in the assessment of criticality between home and host authorities.
  • Scope of Plans: Some plans lacked details on operations outside the home jurisdiction.
  • Resolution Strategies: Only a few colleges considered alternative resolution strategies, and the analysis needs to be more detailed.

b. Joint Decisions on Measures to Remove Substantive Impediments

• Progress Achieved:

  • Some progress was made in identifying and addressing impediments to resolvability.
  • Banks and authorities made strides in developing internal policies on MREL and setting up service companies for operational continuity.

• Areas for Improvement:

  • No Joint Decisions: No joint decisions were reached on the application of measures to remove substantive impediments.
  • Work Plans: Need for clearer work plans and escalation procedures.
  • Comparability: Progress was uneven, and consistent monitoring tools are needed.

c. Joint Decisions on MREL

• Progress Achieved:

  • For the first time since the BRRD came into force, most colleges reached joint decisions on MREL.
  • Clear MREL decisions enhance the credibility of resolution authorities and provide clarity to banking groups.

• Areas for Improvement:

  • MREL Framework: Needs to be finalised, particularly at the entity level.
  • Eligibility Criteria: Some MREL decisions were unclear, affecting banks' ability to plan funding needs and investor confidence.
  • Consistent Reporting: The EBA introduced a new requirement for consistent MREL reporting across jurisdictions.

Concluding Remarks and Next Steps

• The EBA highlights the progress made in the functioning of resolution colleges and encourages continued efforts to improve operational aspects.
• It will focus on supporting European authorities in the following areas:
  • Bail-in execution policies
  • Interplay between recovery and resolution
  • Monitoring the removal of impediments to resolvability
• The EBA also plans to monitor the consistent application of MREL policies.
• It encourages all relevant authorities to continue working on the operationalisation of resolution strategies, removal of impediments, and finalisation of the MREL framework.

Annex I - 2018 Key Recommendations

• The report includes a summary of the EBA's key recommendations, which are focused on improving the functioning of resolution colleges and ensuring compliance with the BRRD.