Banking Recovery and Resolution Matters - Newsletter 3

On 29 September 2022, the European Banking Authority (EBA) published its annual work programme for 2023, describing the key strategic areas of work for the Authority for the coming year, as well as related activities and tasks.

In 2023, the EBA will continue delivering on the priorities defined for the period 2022-2024 in its programming document. Its focus will be on: i) finalising the Basel implementation in the EU, ii) running an enhanced EU-wide stress test, iii) providing data to all stakeholders, iv) addressing the new challenges arising from the digitalisation of finance, and v) further contributing to the build-up of the capacity to fight ML/FT and to protect consumers in the EU. Moreover, it will continue to pay particular attention to the European ESG agenda, in its regulatory and risk assessment mandates, as well as in its own organisation, building on its recent EU Eco-Management and Audit Scheme (EMAS) registration.

Given the political agreements reached in 2022 on the Digital Operational Resilience Act (DORA) and Markets in Crypto-Assets (MiCA) legislations, the EBA will also actively start its preparations to be able to discharge the new oversight responsibilities it will receive, together with the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA). Against this background, it will continue to foster all possible internal and external synergies, working closely with Competent Authorities and other European bodies, and carry out the modernisation of its organisation engaged in recent years. Against that background, the number of over-arching activities was further reduced to facilitate coordination and readability,

The work programme benefitted from the recommendations of the EBA’s Advisory Committee on Proportionality.

The 2023 work programme may be accessed through this link.

On 28 September 2022, the EBA published its final Guidelines on transferability to support the resolvability assessment for transfer strategies. In particular, the guidelines on transferability provide guidance relating to (i) the definition of the transfer perimeter and (ii) the steps to operationalise the implementation of the transfer. The transferability Guidelines complement the  resolvability Guidelines, which were published on 13 January 2022.  Institutions and resolution authorities should comply with these Guidelines in full by 1 January 2024.

Transferability is defined as the elements of resolvability that will facilitate the transfer of an entity, a business line or a portfolio of assets, rights and/or liabilities (“transfer perimeter”) to an acquirer, a bridge institution, or an asset management company. The Guidelines deal with the transfer perimeter definition, separability (that is, how to facilitate separation of an entity or a business from the rest of the group in resolution) and operational transfer of this perimeter.

The transferability Guidelines aim at supporting the assessment of the feasibility and credibility of transfer strategies and include requirements relating to the implementation of transfer tools. The transferability Guidelines include proportionality measures, as they do not apply to institutions subject to simplified obligations or earmarked for liquidation, unless resolution authorities decide so (in full or in part). In addition, discretion is left to authorities with regards to the extent of application of the Guidelines in cases where the transfer tool is only part of the variant strategy.

These Guidelines maybe accessed through this link.