The European Banking Authority (EBA) has issued a consultation paper containing a draft recommendation on the coverage of entities in a group recovery plan.
From its thematic reviews of recovery plans and its attendance at several colleges of supervisors, the EBA has identified that several group recovery plans are, currently, written predominantly from the EU parent undertaking perspective with little emphasis on the other entities of the group.
The recommendation is aimed at defining common criteria to identify entities (subsidiaries and branches) that need to be covered in group recovery plans, and the extent of such coverage. Such criteria should help institutions avoid a fragmented approach in providing information in recovery plans, and provide common guidance for home and host supervisors.
The EBA recommends that for recovery planning purposes entities should be categorised as: (i) relevant for the group; (ii) relevant for the economy or financial system of a relevant member state; or (iii) not relevant for neither of the two. Different levels of information are identified for each category. The EBA also includes a transitional phase to allow the incorporation of available information from existing individual plans into group plans.
The deadline for comments on the consultation paper is 2 June 2017.
View EBA consults on the coverage of entities in banking group recovery plans, 2 March 2017