status: Adopted and published on the Official Journal
These Regulatory Technical Standards (RTS) specify the operational functioning of the resolution colleges that are to be established for those banking groups that operate on a cross-border basis within the European Economic Area (EEA). These RTS are based on specific requirements laid down in the Bank Recovery and Resolution Directive (BRRD), which provides a common resolution regime across the EU aimed at allowing home and host authorities to deal with failing institutions and cooperate in the process of resolution planning.
Final draft RTS on Resolution Colleges
Regulatory Technical Standards published on the Official Journal
EBA consults on the functioning of resolution colleges
The European Banking Authority (EBA) launched today a consultation on its draft Regulatory Technical Standards (RTS) specifying the operational functioning of the resolution colleges that are to be established for those banking groups that operate on a cross-border basis within the European Economic Area (EEA). These standards are based on specific requirements laid down in the Bank Recovery and Resolution Directive (BRRD), which provides a common resolution regime across the EU aimed at allowing home and host authorities to deal with failing institutions and cooperate in the process of resolution planning. The consultation will run until 18 March 2015.
Recent financial crises have shown that in the EU banking sector cross-border cooperation and coordination are key for effective resolution of failing institutions. In this respect, resolution colleges are the bodies that ensure cooperation at all stages. The RTS issued today specify the operational functioning of the resolution colleges from their establishment to going concern and resolution planning, to situations of cross-border resolution.
These draft RTS are structured under three parts. The first focuses on the operational organisation of resolution colleges and lays down provisions on their establishment as well as their on-going functioning. The second deals with resolution planning and joint decisions on the development and maintenance of group's resolution plan and performance of the resolvability assessment, the measures to address substantive impediments to resolvability and on setting the minimum requirements for own funds and eligible liabilities (MREL). The standards also handle situations of disagreement, so as to ensure transparency and interaction between home and host authorities when some of them disagree with draft joint decisions.
Finally, the third part focuses on cross-border group resolution and covers the situation where a notification on a failing or likely to fail institution is received by the group-level resolution authority and the ensuing process to assess the need for a group resolution scheme and for mutualising financing arrangements. The joint decision process on the group resolution scheme, where such a scheme is needed, is elaborated here.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. The deadline for the submission of comments is 18 March 2015. All contributions received will be published following the close of the consultation, unless requested otherwise.
A public hearing will take place at the EBA premises on 17 February 2015 from 11:00 to 13:00 UK time.
Legal basis and next steps
These draft RTS have been developed according to Article 88(7) of the BRRD, which mandates the EBA to specify the operational functioning of resolution colleges that are to be established for EEA cross-border banking groups. The EBA will submit the final draft RTS to the Commission by 3 July 2015.
EBA defines functioning of EU banking resolution colleges
The European Banking Authority (EBA) published today its Final draft Regulatory Technical Standards (RTS) that specify the operational functioning of the resolution colleges established for those groups that operate on a cross-border basis in the European Economic Area (EEA). These RTS have been developed within the framework established by the EU Bank Recovery and Resolution Directive (the BRRD) and specify how resolution colleges should function, from their establishment, going concern function and resolution planning, to situations of cross-border resolution.
The EBA's standards focus on the operational organisation of resolution colleges and describe the resolution planning process - from the assessment of the resolvability of an institution to the setting up of minimum requirements for own funds and eligible liabilities (MREL) -, and give detail on how the resolution of a cross-border group should be carried out.
Resolution colleges are the bodies that ensure cooperation of all parties at all stages of the resolution planning and resolution process of a failing bank. These RTS also cover situations of disagreement, so as to ensure that transparency is given to decisions taken on individual basis and cooperation and interaction between resolution authorities continues also in such cases. The involvement of resolution authorities of third countries, both in resolution planning and in group resolution, is also foreseen by these RTS, which require EU resolution authorities to develop and specify a framework covering this third country resolution authorities' involvement.
The recent financial crises have shown that cross-border cooperation and coordination are vital for effective resolution of failing institutions within the EU banking sector. These RTS have taken into account the EBA's experience in the organisation and running of EU supervisory colleges in the banking sector, as well as the lessons learned on home-host cooperation (the countries where an institution is authorised and the countries where it operates through subsidiaries or branches) during situations of both going concern and emergency.
These RTS have been developed according to Article 88(7) of the BRRD which mandates the EBA with the development of draft regulatory technical standards (RTS) to specify the operational functioning of the resolution colleges for the performance of the tasks referred to in paragraph 1 of that Article.
Consultation on Regulatory Technical Standards on resolution colleges (EBA/CP/2014/46)
These draft RTS are structured under three parts. The first focuses on the operational organisation of resolution colleges and lays down provisions on their establishment as well as their on-going functioning. The second deals with resolution planning and joint decisions on the development and maintenance of group's resolution plan and performance of the resolvability assessment, the measures to address substantive impediments to resolvability and on setting the minimum requirements for own funds and eligible liabilities (MREL). The standards also handle situations of disagreement, so as to ensure transparency and interaction between home and host authorities when some of them disagree with draft joint decisions.
Consultation paper
Association for Financial Markets in Europe
CLS Group
BSG Opinions
BSG response to Consulation paper (EBA-CP-2014-46) - 18 March 2015