On 25 September 2014, The European Banking Authority (EBA) launched two consultations on its draft Guidelines and implementing technical standards (ITS) relating to recovery planning, resolution planning and resolvability assessments under the Bank Recovery and Resolution Directive (BRRD).
The draft Guidelines specify the criteria laid down in the BRRD by establishing a mandatory set of indicators against which competent and resolution authorities should determine the impact of the failure of an institution and its winding up under normal insolvency proceedings and therefore its eligibility for simplified obligations. A list of optional indicators is also provided which, in addition to the mandatory indicators, may be taken into account in the assessment process.
The Guidelines also clarify that Globally Systemically Important Institutions (G-SIFI) and Other Systemically Important Financial Institutions (O-SIFI) should not be subject to simplified obligations, since it is assumed that their failure would always be likely to have a significant negative effect.
The draft ITS launched for public consultation along with the Guidelines include a number of templates and definitions to be used by competent and resolution authorities for the identification and transmission of information to the EBA about the way they have assessed institutions against the criteria set out in the BRRD, including the mandatory indicators, and the nature of the simplified obligations applied to eligible institutions.
The consultation runs until 3 January 2015.