2015年-EBA欧洲银行管理局_EBA_Report_CFs_and_CBLs_benchmarking_18页_539kb

EBA Recovery Planning Summary

Introduction

The EBA (European Banking Authority) published this report as part of its mandate under Directive 2014/59/EU (BRRD) to support the development and coordination of recovery and resolution planning across European banks. The report compares the approaches taken by 27 cross-border banking groups in identifying Critical Functions (CFs) and Core Business Lines (CBLs) in their recovery plans. The analysis is based on a two-step method involving general questions and predefined assessment criteria, primarily derived from the Financial Stability Board (FSB) guidance.

The report aims to identify best practices and provide insight into current industry approaches, helping credit institutions and resolution authorities improve the quality and consistency of recovery planning.

1. Preliminary Considerations

• A total of 27 recovery plans were reviewed, representing banks from 12 EU Member States, covering approximately half of the total assets of EU banks.
• The core analysis focused on a subset of these plans, as only 12 and 17 plans included CFs and CBLs respectively.
• The sample is not comprehensive, but it provides a reasonable basis for comparative analysis.
• Recovery plans were developed in 2013 and 2014, before the BRRD came into force in January 2015.
• The report is part of a series of comparative analyses that will expand in the future to cover more detailed aspects of recovery planning.

2. Approach

The EBA used a two-step method to evaluate CFs and CBLs:

Step 1: General Questions Template

• A template with general questions was developed to assess the level of detail and granularity in identifying CFs and CBLs.
• The questions cover aspects like definition, criticality rationale, mapping, and impact on recovery options.

Step 2: Assessment Categories and Factors

• The following three assessment categories were used:
  1. Impact assessment: Evaluates the effect of a function's failure on external parties and the financial system.
  2. Supply-side analysis: Examines the market structure, substitutability, and barriers to entry.
  3. Firm-specific test: Assesses the importance of the institution to the function.

Annex II provides detailed underlying factors for each category.

3. Critical Functions (CFs)

3.1 General Considerations

• Most banks made progress in identifying CFs, but the concept is relatively new and challenging.
• Only a limited number of recovery plans included CFs, likely due to the lack of regulatory obligation before 2015.
• The FSB and EBA templates were used as references, though some banks created their own ad-hoc definitions.
• There was confusion between CFs and CBLs, with some banks including internal importance rather than external impact.

3.2 Definition

• Most banks used a definition based on the provision of services to third parties and the financial stability of the market.
• A few banks included internal importance or potential impact on the group, which may have blurred the distinction with CBLs.

3.3 Assessment Criteria

• The most commonly used criteria were systemic importance and substitutability.
• Fewer banks used impact assessment and contagion effects in their analysis.

3.4 Systemic Importance

• Banks used quantitative indicators such as market share, volumes, and number of customers to assess systemic importance.
• No standard market share thresholds were defined across banks.
• For retail deposits, a market share of 3–5% was generally considered critical, while for payment and asset management, thresholds were higher (over 10%).

3.5 Substitutability

• Substitutability was assessed based on the number of providers, market concentration, and barriers to customer switching.
• Banks generally used internal data to evaluate market concentration.
• Only a few banks considered the speed of substitution, with two setting a 30-day maximum timeframe.

3.6 Impact

• Impact analysis on external parties was limited and mostly involved scoring without detailed explanation.
• Some banks provided basic information on interbank exposures and derivative holdings to support their impact assessments.

3.7 Type/Number of Functions and Criticality Rationale

• The number of CFs identified varied depending on the bank's size and diversification.
• The median number of CFs across the sample was 11.
• Common CFs included:
  • Retail deposit current accounts
  • Retail lending (including mortgages)
  • Payments (cash/wire services)
  • Corporate lending
  • Corporate deposits
  • Clearing and settlement
  • Derivatives (interest rate, FX, equity)

3.8 Mapping

• Seven out of twelve banks mapped CFs to legal entities within the group.
• The mapping was usually in the form of a table listing CFs and the entities they were carried out in.
• However, the underlying criteria for mapping were not included, and the relative importance of entities was not clearly indicated.

4. Core Business Lines (CBLs)

4.1 Key Findings

• CBLs were more consistently addressed in recovery plans than CFs.

• Banks used both quantitative and qualitative criteria to define CBLs.

• Common quantitative criteria:

  • Contribution to group revenues
  • Contribution to operating profit
  • Total assets/ assets under management
  • Loan/deposit volumes

• Common qualitative criteria:

  • Strategic importance
  • Franchise value
  • Market potential
  • Regulatory threats
  • Customer value
  • Group strategy and cultural fit

• CBLs often aligned with main business lines reported in annual reports.

• Banks acknowledged that CBLs can change over time and with strategy.

5. Annex I: EBA Assessment Template

• Includes general questions on CFs and CBLs, such as:

  • Whether CFs are clearly defined
  • Whether they are mapped to legal entities
  • Whether recovery options restore the viability of CFs
  • Whether CFs and CBLs can be legally and economically separated

• Includes general questions on CBLs, such as:

  • Criteria used to identify CBLs
  • Whether each CBL is described
  • Whether governance arrangements and escalation procedures are covered
  • Whether scenario testing considers the impact on CBLs

6. Annex II: Assessment Categories and Factors