From the European Banking Authority’s (EBA) thematic reviews of recovery plans and its regular attendance of several colleges of supervisors, it was identified that several group recovery plans are, currently, written predominantly from the Union parent undertaking’s perspective, with little emphasis on the other entities in the group.
This approach clearly limits the credibility and the effectiveness of the plan, undermining both the idea that the group recovery plan be capable of offering credible recovery solutions for the whole group and compliance with the legal requirements pursuant to which the group recovery plan shall identify measures that may be required to be implemented at the level of the parent entity and each individual subsidiary.
The EBA has now published a final report on its recommendations on the coverage of entities in a group recovery plan.
The recommendations are addressed to both Member State competent authorities and institutions and define common criteria to identify entities that need to be covered in group recovery plans, as well as the extent of such coverage. The criteria will help institutions avoid a fragmented approach in providing information in recovery plans and gain a better understanding of the relevant supervisory expectations.
The recommendations apply from 1 January 2018.
View EBA recommends proportionate approach in coverage of entities in banking group recovery plans, 1 November 2017