On July 9, 2015, the EBA published final guidelines on conditions for group financial support under the BRRD, together with final draft Regulatory Technical Standards, specifying the conditions for group financial support and final draft RTS on the form and content of disclosure of financial support agreements. The EBA’s guidelines enhance the means through which one member of a banking group may provide support to another member of the same group, which is in financial difficulty. This overcomes the current lack of a comprehensive group support mechanism across the EU, ensuring that such support may be enforced between cross-border institutions forming part of the same banking group. The RTS outline the factors to be considered when ascertaining whether the conditions for the provision of group financial support are satisfied. National regulators are also required to consider the possible reasons for the financial distress of the relevant entity (e.g., whether this is due to its business model, the current market situation or other circumstances). The guidelines and RTS also confirm that group support may be enforced in certain instances, even where prudential requirements have not been met.
The final guidelines are available at:
http://www.eba.europa.eu/documents/10180/1137032/EBA-GL-2015-17+Guidelines+on+group+financial+support.pdf and both final draft RTS are available at: http://www.eba.europa.eu/documents/10180/1136980/EBA-RTS-2015-08+RTS+on+financial+support.pdf; and http://www.eba.europa.eu/documents/10180/1136953/EBA-ITS-2015-07+ITS+on+Disclosure+of+Group+Financial+S upport+Agreements.pdf.