On 1 December 2021, the Single Resolution Board (SRB) published guidance on solvent wind-down of derivatives and trading books in resolution. This guidance was released in line with the SRB’s Expectations for Banks (EfB) document which was published in April 2020.
The guidance builds on the principles in the EfB and provides banks with details on how to demonstrate resolvability with regard to the size and complexity of the trading books. For certain banks, the size and complexity of their trading books could impede the credible and feasible implementation of their envisaged resolution strategies. This guidance sets out the scope and minimum expectations for solvent wind-down planning and potential execution. The main aims are to:
- adequately prepare, develop and maintain banks’ capabilities for the planning of a solvent wind-down in resolution; and
- to ensure execution capabilities of the solvent wind-down plan in a reasonable timeframe.