On 7 December 2020, the Single Resolution Board (SRB) published a paper outlining its expectations for how banks engaging in mergers and acquisitions (M&As) can ensure resolvability.
The SRB has set out the necessary capabilities that banks need to demonstrate to be considered resolvable in its Expectations for Banks document, published in April 2020. In that document, the SRB sets the goal of the end of 2023 for achieving resolvability across its banks in a phased way. However, the SRB recognises that M&As and other corporate transactions may have an impact on banks’ existing paths to resolvability. Therefore, in the case of a relevant M&A transaction, the SRB expects banks to prepare a revised resolvability work plan respecting the overall requirements, including the elements presented in the paper.
The SRB will cooperate closely with supervisory authorities early on to ensure that any potential resolvability concerns that may arise are promptly detected, thus avoiding duplicate requests for information. However, to facilitate this cooperation, banks engaging in M&As and other corporate transactions, are expected to contact the SRB as soon as possible. This will ensure that resolvability considerations are embedded in banks’ business integration plans. It will also enable the SRB to re-examine existing resolution approaches in a timely manner, supporting consistency between the banks’ new set-up and the selected resolution strategies.