SRB outlines three pillars for operational crisis readiness in Banking Union
The Single Resolution Board (SRB) is enhancing its operational crisis readiness to ensure the orderly resolution of failing banks in the Banking Union. This ongoing effort builds on past experiences and is central to the SRM Vision 2028.
SRM's three pillars for swift action
Operational crisis readiness at the Single Resolution Mechanism (SRM) rests on three pillars: policies and procedures, tools, and trained people.
The SRB has developed simplified crisis policies and ready-to-use materials covering the full crisis cycle, from early detection to post-resolution activities, including bail-in execution and transfer tools.
National Resolution Authorities (NRAs) have drafted National Handbooks in coordination with the SRB.
Secondly, the SRB invested in an operational toolkit, featuring a bail-in calculator, a valuation tool, and the secure Ready for Crisis platform for stakeholder communication.
Thirdly, specialized crisis training, practical exercises, and expert networks foster a culture of preparedness across the SRM, ensuring teams can translate knowledge into effective action.
Simulation exercises and valuation capabilities are also critical elements.
Testing plans and valuation needs
Simulation exercises are fundamental for operational readiness, evaluating resolution plans and testing tool execution.
The SRB coordinates 'dry runs' involving the SRB, NRAs, ECB, and European Commission, fostering cooperation and revealing insights.
Accurate valuation capabilities are central to informed and timely resolution decisions.
The SRB's 'Expectations on Valuation Capabilities' aims to enhance banks' preparedness for robust valuations, requiring updated data repositories and clear playbooks.
This highlights that both banks and authorities must be equally prepared with high-quality data and analytical readiness for effective crisis management.
Beyond planning, into action
The SRB's shift to operational readiness marks a crucial evolution from theoretical planning.
While progress is evident, the true test lies in seamless execution during an actual crisis.
Sustained collaboration and robust data quality remain paramount to bridge any remaining gaps.