The Bank Recovery and Resolution Directive (BRRD) mandates the European Banking Authority (EBA) under Article 82(3) to develop draft regulatory technical standards (RTS) in order to specify the procedures and contents relating to the notifications referred to in Articles 81(1), (2) and (3) and the notice of suspension referred to in Article 83.

The EBA has now published final draft RTS that address three distinct notifications:

• the management body of an entity should duly notify the competent authority if they consider the entity to be failing or likely to fail;
• the competent authority should in turn inform the resolution authorities of any notification received from an entity as well as of any measures that the competent authority requires the entity to take pursuant to Article 104 of the BRRD; and
• the relevant authorities identified in Article 81(3) of the BRRD should receive communication from the competent authority or the resolution authority, as the case may be, that in accordance with Article 32(1)(a) and (b), an institution or an entity is failing or likely to fail and that there is no reasonable prospect that any alternative private measure or supervisory action would prevent the failure of the institution or the entity within a reasonable timeframe.

Also, the draft RTS set out the procedures and the content of the notice summarising the effects of the resolution action, including the decision to suspend or restrict the exercise of certain rights in accordance with Articles 69, 70 and 71 of the BRRD.

The final draft RTS will be submitted to the European Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council of the EU before being published in the Official Journal of the EU.

View EBA issues final standards on processes for notifying that a banking institution is failing, 3 July 2015