EBA consults on early intervention: EBA is consulting on two sets of draft guidelines:

  • Triggers for use of early intervention measures: these guidelines are aimed at helping competent authorities by clarifying the conditions for using early intervention measures set out in the Banking Recovery and Resolution Directive (BRRD). Early intervention is based primarily on the SREP (supervisory review and evaluation process). The draft guidelines also look at how significant events and material deterioration or anomalies in the key indicators might act as triggers, before the SREP scores show the effects of these.
  • Interpretation of when an institution is failing or likely to fail: EBA's aim is to ensure a smooth transition from the supervision that national regulators carry out under the Capital Requirements Directive to that required under the BRRD. The guidelines are for use by supervisory authorities in assessing failure against the SREP, and for resolution authorities when looking at the objective elements of the decision. EBA thinks it is important to ensure consistency of outcome.

EBA asks for comment on both papers by 22 December. (Source: EBA Consults on Early Intervention Triggers and EBA Consults on Interpretation of Failure)

EBA publishes guidelines on non-BRRD-triggering public recapitalisation: EBA has published its final guidelines on the types of tests, reviews or exercises to apply when determining when the provision of extraordinary public support to a bank will not trigger resolution action under the BRRD. (Source:Guidelines on BRRD Support Measures)

EBA consults on critical services in partial transfer: EBA is consulting on draft guidelines regarding the power of a resolution authority under the BRRD to require continuity of essential services from other parts of a group subject to a partial business transfer. (Source: Guidelines on List of Services Necessary for a Recipient to Operate a Business Transferred to It)

EBA consults on asset separation and sale of business tools: EBA is consulting on guidelines on the asset separation and sale of business tools under the BRRD. Those regarding sale of business specify when authorities may deviate from certain marketing requirements. The guidelines on asset separation cover what assets may be transferred depending on the impact of liquidation. (Source: EBA Consults on Asset Separation and Sale of Business Tools)

ESAs publish risks and vulnerabilities report: EBA and the other two European Supervisory Authorities (ESMA and EIOPA, together ESAs) have published their latest bi-annual report on risks and vulnerabilities in the EU financial system. The report considers the weak economic recovery in the EU and the asset quality reviews and stress tests in the banking sector. It then emphasises business conduct risks and the need for institutions to enhance compliance and risk management processes. (Source: Report - Autumn 2014)