In the third edition of the Resolvability Assessment Report, published on 9th July 24, the Single Resolution Board (SRB) concludes that: - All banks which had to comply with their final (MREL) targets as of 1 January 2024 managed to meet their requirements (both external and internal). - For banks with longer transition periods the remaining external MREL shortfall equals EUR 6 bln, compared to MREL instruments global amount of 2,555 bn EUR. 📈 Compared to end of 2022, the SRB has observed significant progress from banks in three prioritised capabilities: ✅ Estimation of liquidity needs both under slow and fast-moving outflow scenarios in the resolution ✅ Extended identification of assets that can serve as collaterals for obtaining funding during and after resolution. Going beyond Central Bank eligible collaterals. ✅ Enhanced capabilities to generate the datasets for resolution planning, valuation, applying bail-in and preparation for a sale-of-business and the restructuring post bail-in. As a result, the SRB is shifting its focus to the operational readiness of banks for crisis management. 💡 The important message coming from the Resolvability Assessment Report is that as of next year, the SRM will open a new chapter of its resolvability assessment based on a revised methodology (Heatmap) and the systematic testing of banks’ capabilities. This new approach to assessing resolvability will be more risk-based. It is aimed to capture emerging risks and reflect lessons learnt from past crises in the resolvability assessment framework. Testing will rely on standard templates for all banks to enhance transparency, but also multi-annual testing programme specifically defined for each bank. The criteria for resolvability assessment and the guidance on testing will undergo public consultation.
New Report Alert! The Single Resolution Board has released its third annual resolvability assessment for banks across the Banking Union. 🏦💼 🚀 Key Highlights: 📈 Progress: Banks have made significant strides in developing their capacity to withstand crises. 🔍 Operational Readiness: The SRB is shifting focus to crisis preparedness, emphasising operational aspects of crisis management. 🔄 Testing Framework: Comprehensive testing—fire-drills, deep-dives, and on-site inspections - will challenge banks’ crisis readiness against evolving risks. Consult the report here: https://lnkd.in/e5yKhBua
