2017年-EBA欧洲银行管理局_EBA_Comparative_report_on_recovery_options_March_2017_43页_945kb

EBA Recovery Planning Comparative Report Summary

Core Content

This report, published by the European Banking Authority (EBA) on 01 March 2017, is the fourth thematic comparative analysis on recovery planning in the European banking sector. It focuses on the recovery options that European cross-border banking groups have included in their recovery plans, assessing their plausibility, feasibility, and integration within the broader recovery strategy.

The report is based on the analysis of 23 European cross-border banking groups, with parent institutions located in 12 different EU countries, all of which submitted their recovery plans in the second half of 2016. The objective is to support supervisors and resolution authorities in identifying key elements that should be considered when designing credible recovery options.

Main Views

1. Recovery Options Overview

• Recovery options are central to assessing the viability of institutions in financial distress.

• The BRRD (Bank Recovery and Resolution Directive) and the Delegated Regulation (EU) 1075/2016 require recovery plans to include a wide range of recovery options that are plausible and viable.

• The most common recovery options identified across the sample include:

  • Disposal of subsidiaries
  • Sale of assets/loan portfolios
  • Liquidity improvement measures
  • Capital raising

• The number of recovery options varied significantly, from 8 to 56.

• About half of the recovery plans identified recovery options at the subsidiary level, though these were often based on parent support rather than formal intra-group agreements as required by Article 19 of the BRRD.

• Some plans lacked detailed descriptions of recovery options, which made it difficult to assess their feasibility.

2. Governance and Implementation

• Governance arrangements are essential for ensuring that recovery options can be implemented quickly and effectively.
• About half of the recovery plans provided detailed governance, decision-making, and implementation procedures for each option.
• A number of plans relied on general governance procedures, such as escalation and decision-making processes, without specifying how decisions would be made or who would be responsible.
• Some plans referenced internal handbooks but did not provide sufficient detail to evaluate the feasibility of these procedures.

3. Impact Assessment

• Financial impact assessments are required for each recovery option, focusing on key capital and liquidity metrics such as CET1 ratio, total capital ratio, and liquidity.
• However, only a few plans provided detailed assumptions and background reasoning for these calculations.
• Operational impact assessments were also included in most plans, addressing operation continuity, critical functions, core business lines, and access to financial market infrastructures (FMI).
• Many plans lacked specific analysis on how recovery options would affect operational continuity in different scenarios.

4. Credibility and Feasibility

• Credibility of recovery options depends on previous experience, estimated execution timelines, and potential impediments.
• While many plans referenced past experiences, they often did not provide specific details on how these experiences were used to inform the recovery plans.
• Estimated timelines for recovery option implementation were included in all plans, but insufficient explanation was provided to assess their realism and conservativeness.
• Potential risks and impediments were generally identified, but mitigating actions and preparatory measures were often generic and limited in scope, reducing their effectiveness.

Key Information

• Recovery planning is now a standard part of supervisory activities in the EU, following the implementation of the BRRD in 2015.
• Integration of recovery options with governance structures and scenarios is critical for the credibility and feasibility of recovery plans.
• Communication between parent and subsidiary in recovery planning is often lack of detail, and formal intra-group agreements are rarely structured.
• Scenario testing is required to evaluate the effectiveness of recovery options, but many plans did not fully test all options.
• Assessment of feasibility is often limited to qualitative terms, and quantitative analysis is underdeveloped in many plans.
• Preparatory measures and mitigation strategies are generally absent or insufficiently detailed, reducing the overall preparedness of institutions.

Conclusion

The report highlights improvements in recovery planning since the implementation of the BRRD, but also identifies significant challenges in the plausibility, feasibility, and integration of recovery options. It emphasizes the need for more detailed analysis, specific governance procedures, and scenario-based testing to ensure that recovery plans are robust and credible. Supervisors and resolution authorities are encouraged to focus on these aspects when reviewing recovery plans to ensure they are effective and ready for implementation in times of financial stress.