EBA欧洲银行-Session-3.1-Bank-recovery-26-resolutionAndrew-Gracie_8页_123kb

EBA Proportionality Workshop Summary: Practical Implementation of Proportionality in Resolution Planning

1. Core Resolution Objectives

The resolution objectives under the Banking Act 2009 apply universally and include:

• Ensuring continuity of banking services and critical functions in the UK
• Protecting and enhancing the stability of the UK financial system
• Maintaining public confidence in the financial system
• Minimising reliance on public funds
• Protecting depositors and investors under compensation schemes
• Safeguarding client assets where relevant
• Avoiding interference with property rights, in line with the European Convention of Human Rights

These objectives guide the development and implementation of resolution strategies across all financial institutions.

2. Resolvability Across All Resolution Tools

Resolvability is a key requirement for all firms within the scope of the Bank Recovery and Resolution Directive (BRRD), regardless of the resolution tool used. This includes:

• BRRD Resolution Tools: Transfer (private sector purchasers, bridge bank), bail-in, MREL setting, operational continuity, valuation, access to financial market infrastructures (FMI), and contractual recognition
• Insolvency Procedures: Bank insolvency procedure with focus on depositor protection and access to Single Customer View files
• Administration Regime: Special administration regime for investment firms
• Client Assets Segregation: Ensuring client assets and money are properly separated from the firm’s own funds

The goal is to ensure that any resolution strategy can be executed effectively without undue disruption.

3. Selecting Appropriate Resolution Strategies

Resolution strategies must consider the following factors:

• Critical Economic Functions (CEFs) and Critical Shared Services (CSS)
• BRRD Level 1 text provides criteria for applying simplified obligations, including:
  • Size of the firm
  • Interconnectedness
  • Scope and complexity of activities
  • Risk profile
  • Legal status
  • Nature of business
  • Shareholding structure
  • Legal form
  • Membership in a group or in a International Parental Company (IPSC)

These criteria help determine the appropriate level of detail and requirements for resolution planning.

4. Resolution Requirement Process (RRP) and Proportionality

The UK has implemented a phased approach to resolution information requirements based on the Resolution Requirement Process (RRP):

• Phase 1: Basic information about the firm (applicable to all firms)
• Phase 2: Targeted information requests to address specific barriers to resolution (based on the firm's resolvability)

Key lessons from the first RRP submissions in 2012 included:

• The need to avoid a "one size fits all" approach
• Challenges in identifying and separating CEFs and CSS
• Importance of targeted questions to prevent information overload
• Need for timely submission of resolution information

This phased approach ensures proportionality in the information required.

5. Efficient Resolution Plan Drafting

Efficient resolution plans should be structured to maximise clarity and reduce administrative burden. Key features include:

• Template documents tailored for different firm types (e.g., G-SIBs, BIP firms)
• Standard sections applicable across multiple firms (e.g., access to FMI)
• Critical information such as resolution strategy, key barriers to resolution, and plans to address them

These elements allow for streamlined planning while ensuring all essential aspects are covered.

6. Addressing Impediments to Resolvability

The Bank of England has published a consultation paper on 22 May 2015 outlining its approach to directing institutions to address impediments to resolvability. Key points include:

• Remedial measures must be proportionate to the burden or restriction they impose
• Alignment with FSB Key Attributes and EBA Guidelines on removing impediments
• Adherence to public law conventions, including acting reasonably and respecting legal certainty

This approach ensures that resolution planning remains effective and fair.

7. Cross-Border Resolution Planning

Cross-border resolution planning is governed by BRRD Article 88 and the EBA RTS, which outline the requirements for resolution colleges. These include:

• Definition of the scope and roles of resolution authorities
• Mechanisms for joint decision-making
• Emphasis on cooperation and coordination between member states
• Uniformity in decision-making processes
• The UK’s engagement with existing Cross-Border Resolution Groups (CMGs) to enhance cooperation

Resolution colleges play a vital role in ensuring consistent and effective cross-border resolution planning.