On 20 May 2020, the European Banking Authority (EBA) published a report, which assesses interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD), with the aim of enhancing synergies between the two phases and ensuring consistency in their potential implementation.
The report:
- outlines the EBA’s observations deriving from its first comparative analysis of recovery and resolution plans, identifying best practices and areas where further improvement or clarification is needed (section 1);
- provides the EBA’s views and conclusions on some specific common elements between recovery and resolution plans, clarifying their specific purpose in each planning phase and outlines the advantages / disadvantages of convergence / harmonisation (section 2);
- analyses the potential impact of recovery options on an institution’s resolvability, introducing an assessment framework comprising an ‘assessment table’ and an ‘assessment approach’, to support assessment and consultation between resolution authorities and competent authorities on this aspect (section 3); and
- underlines areas of interlinkage where further work could be performed by the EBA (section 4).
The EBA has also published two annexes:
- annex 1 – the ‘assessment grid’ template used to perform the comparative analysis of a sample of recovery and resolution plans; and
- annex 2 – the assessment table (in Excel format), which is a practical tool for supporting resolution authorities in conducting their analysis of the potential impact of recovery options on institutions’ resolvability.
