Bank resolvability self-assessment guided by new SRB framework
The Single Resolution Board (SRB) has published new operational guidance to help banks conduct their resolvability self-assessments. This document aims to support the enhanced operationalisation of resolution strategies by promoting convergence of practices across the banking union.
From expectations to practical self-assessment
The Single Resolution Board (SRB) has issued comprehensive operational guidance, building on its 'Expectations for Banks' (EfB) published in April 2020.
The EfB outlined the minimum capabilities banks need to demonstrate resolvability and prepare for crisis management.
This new guidance aligns with the SRM Vision 2028, which emphasizes crisis readiness and the operationalisation of resolution plans.
It places a greater focus on banks conducting regular self-assessments and testing their resolution capabilities, with a multi-annual testing programme set to commence from 2026.
The primary objective is to guide banks under the SRB's direct remit in their self-assessments, fostering convergence across the banking union.
The guidance provides a harmonised resolvability self-assessment report, consisting of an executive summary and a detailed template, to ensure consistent evaluation against EfB criteria.
Assessing capabilities, identifying impediments
The self-assessment report is central to the SRB's annual resolution planning, informing Internal Resolution Teams (IRTs) on banks' capability implementation.
IRTs use this evidence to calibrate the multi-annual testing programme and assess banks' adherence to resolvability capabilities, with results reflected in a Heatmap.
The assessment also considers the impact of each capability on the chosen resolution strategy, applying proportionality.
This combined evaluation identifies impediments to resolvability and defines necessary follow-up actions.
Should substantive impediments be identified, the SRB may initiate a formal procedure under Article 10 of the Single Resolution Mechanism Regulation (SRMR), recommending proportionate measures for their removal.
Empowering banks, enhancing oversight
This guidance marks a crucial step towards operationalizing resolvability, shifting more responsibility onto banks themselves.
While promoting convergence across the banking union, its ultimate effectiveness will hinge on consistent application by institutions and rigorous oversight by the SRB.
This initiative underscores the ongoing commitment to strengthen the EU's crisis management framework, ensuring financial stability through proactive preparedness.