On 22 September 2014, the European Banking Authority (EBA) published its final Guidelines required by Article 32(4)(d)(iii) of the Bank Recovery and Resolution Directive (BRRD). The Guidelines specify the type of tests, review or exercises that may lead to extraordinary public support measures for institutions in the banking sector
The Guidelines specify the main features of the types of tests, reviews or exercises that may lead to support measures. These features include a timeline, a scope, a time horizon and reference date, a quality review process, a common methodology and, where relevant, a macro-economic scenario and hurdle rates, as well as a timeframe to address the shortfall.
The EBA expects competent authorities to implement the Guidelines by 1 January 2015. Competent authorities and resolution authorities must notify the EBA as to whether they will comply with the guidelines by 1 December 2014.