EBA欧洲银行-EBA-GL-2015-04-Guidelines-on-the-sale-of-business-tool_19页_307kb

Summary of EBA/GL/2015/04 Guidelines

Core Content

The EBA/GL/2015/04 guidelines are issued under Article 16 of the EBA Regulation (EU) No 1093/2010, aimed at promoting convergent practices among resolution authorities in the European Union. These guidelines focus on two main areas:

1. Factual circumstances that amount to a material threat to financial stability arising from or aggravated by the failure or likely failure of an institution under resolution.
2. Elements related to the effectiveness of the sale of business tool under Article 39(4) of Directive 2014/59/EU.

The guidelines are designed to assist resolution authorities in determining whether deviations from the standard marketing procedures are justified due to the urgency of the situation and the need to preserve financial stability.

Main Views and Key Information

1. Purpose of the Guidelines

• To specify factual circumstances that could be considered as a material threat to financial stability.
• To identify elements that could undermine the effectiveness of the sale of business tool.
• To ensure convergence in the interpretation and application of resolution tools across the EU.
• To prevent adverse effects on financial stability by addressing the risk of loss of market confidence and uncertainty.

2. Scope and Applicability

• The guidelines apply to resolution authorities.
• They are intended to be non-exhaustive, allowing for case-by-case assessment.
• The focus is on factual circumstances that may impact market participants, including institutions, financial markets, infrastructure providers, and non-financial customers.

3. Material Threat to Financial Stability

Resolution authorities should consider the following circumstances that may indicate a material threat to financial stability:

• (a) Risk of a systemic crisis, such as a large number of institutions at risk of early intervention or resolution.
• (b) Discontinuance of critical functions or increase in prices for their provision.
• (c) Withdrawal of short-term funding or deposits.
• (d) Decreases in share prices or asset prices affecting the institution's capital situation.
• (e) Reduction in short or medium-term funding.
• (f) Impairment to the interbank funding market, such as increased margin requirements or reduced collateral availability.
• (g) Increases in credit default insurance prices or decreases in ratings of institutions or market participants.

Resolution authorities should assess the likelihood of these elements being impacted and how they could affect financial stability in other jurisdictions.

4. Elements Affecting the Effectiveness of the Sale of Business Tool

The guidelines outline the elements that resolution authorities should consider when assessing whether compliance with the marketing requirements could undermine the effectiveness of the sale of business tool:

• Transparency: The risk that broader marketing and disclosure of risks or valuations may increase uncertainty and reduce market confidence.
• Non-discrimination: The possibility that certain purchasers may be more likely to ensure financial stability due to their financial or market position, structure, or business model.
• Conflict of interest: The need to ensure that marketing arrangements do not hinder the practicability and timely implementation of resolution actions.
• Unfair advantages: The justification for incentivizing or limiting purchasers’ risk in order to achieve resolution objectives, especially in urgent situations.
• Maximizing sale price: The need to balance the objective of maximizing the sale price with the urgency of resolution and the need to ensure continuance of critical functions.

5. Implementation and Compliance

• The guidelines are effective from 1 August 2015 and should be reviewed by 31 July 2017.
• Competent authorities are required to notify the EBA by a specific deadline (dd.mm.yyyy) of their compliance or reasons for non-compliance.
• These notifications are published on the EBA website in accordance with Article 16(3) of the EBA Regulation.

6. Cost-Benefit Analysis and Technical Options

• The guidelines are qualitative and high-level, with no significant additional operational or administrative costs.
• Two technical options were considered for defining the scope of "material threat":
  • Option 1a: Define "material threat" in line with the public interest test in Directive 2014/59/EU (Article 32(1)(c) and 32(5)).
  • Option 1b: Set a higher threshold of risk than the public interest test.
• Option 1a was selected as the preferred approach, as it aligns with the resolution objective of financial stability without requiring a higher risk level than necessary.
• Two options for the list of circumstances and elements were also considered:
  • Option 2a: An exhaustive list.
  • Option 2b: A non-exhaustive/indicative list.
• Option 2b was chosen for its flexibility, allowing resolution authorities to adapt to different crisis scenarios and market conditions.

7. Stakeholder Feedback

• The Banking Stakeholder Group (BSG) supported the overarching objective of the guidelines, emphasizing the need for harmonization and convergence in supervisory and resolution practices.
• The BSG highlighted the importance of considering the impact on other institutions and financial markets.
• It also supported the flexibility of the guidelines and the use of resolution financing arrangements to facilitate the sale of business.
• The BSG expressed no particular concerns about the conflicts between marketing requirements and resolution objectives.

8. Public Consultation

• A public consultation was conducted for three months, ending on 22 December 2014.
• The feedback received was used to shape the final guidelines, which aim to provide a balanced and practical framework for resolution authorities.

Conclusion

The EBA/GL/2015/04 guidelines provide a non-exhaustive framework for resolution authorities to assess factual circumstances that may constitute a material threat to financial stability and to evaluate the effectiveness of the sale of business tool. The guidelines aim to promote convergence, reduce systemic risk, and ensure the orderly resolution of failing institutions while balancing market transparency and resolution urgency. They are non-binding, but resolution authorities are expected to incorporate them into their supervisory practices.