On 11 March, the European Banking Authority (EBA) launched a consultation on Draft Regulatory Technical Standards (RTS) on the content of Recovery Plans. In doing so, the EBA starts the preparatory work for the implementation of the Recovery and Resolution Directive (RRD). The consultation runs until 11 June, 2013. These RTS will contribute to the European Single Rule Book in banking and aim to enhance financial stability and minimise the probability of banks' failure. Recovery plans shall set out the arrangements and measures a bank would adopt to restore long-term financial viability in case of severe distress. According to the proposed draft RTS, recovery plans developed at group and at individual level will need to include at least the following five key parts:
- summary of the recovery plan;
- governance, including the conditions and procedures necessary to ensure a timely implementation of the recovery options;
- strategic analysis, including a description of the institution's core business lines and critical functions together with the different recovery options designed to respond to financial stress scenarios;
- communication plan, including external and internal communication arrangements; and
- preparatory measures taken, or to be taken, to improve the implementation and effectiveness of the plan.
As the proposed consultation is based on the draft RRD, the text of which is still being discussed by the Parliament and Council, the draft RTS might be amended after the consultation to take into account possible changes in the final RRD.