On 3 July 2018, the European Central Bank (ECB) published a report on recovery plans. The purpose of the report is to share the lessons ECB Banking Supervision has learned and the best practices it has identified after three successive cycles of analysing recovery plans in order to help significant institutions (SIs) further shape their plans and make them even more operational.

Overall the report:

• clarifies the supervisory experience in relation to certain recovery plan-related requirements that have already been set by existing legislation; and
• provides additional insights into a selection of practices adopted by some banks that may help other institutions further improve their recovery plans.

As a final point in the report the ECB highlights that, under the EU legal framework, recovery planning is designed to be an ongoing process. It does not stop once the bank’s management has approved the recovery plan but requires adequate maintenance of the plan. The overarching goal of both banks and supervisors is to achieve and maintain adequate preparedness for exceptional but plausible severe stress events.

Going forward the ECB reports that its main focus when assessing recovery plans will be on ensuring that they can fulfil their purpose of enhancing the resilience of banks. Having operational and effective recovery plans in place is crucial for enhancing the European crisis management framework and, thus, is a priority for supervisors.