11 July 2014

EBA: Consultation on technical standards on independent valuers

The EBA launched a consultation on draft RTS setting out the general criteria against which a valuer should be assessed to determine whether (s)he complies with the legal requirement of independence when performing valuation tasks with respect to a bank under resolution.

The Banking Recovery and Resolution Directive specifies, among other things, that independent valuers shall be appointed to perform valuations of the assets and liabilities of institutions to inform the decisions on whether an institution is failing or likely to fail, as well as on the scope and size of resolution measures to be taken, and whether the "no creditor worse off" principle has been met. In this respect, the proposed RTS identify the circumstances under which a person will be deemed independent from both the resolution authority and the institution or entity subject to the valuation.

In particular, these RTS set forth general criteria to be used in order to determine, on a case by case basis, whether a valuer complies with the legal requirement of independence. For this purpose, the RTS also specify that possible relationships between the valuer and the creditors and shareholders of the institution may affect the requirement of independence. The general criteria for the assessment of independence are complemented by specific situations under which the valuer cannot be deemed independent.

Moreover, as a precondition for being considered independent, valuers need to have the qualifications and expertise required in the fields of valuation, accounting and banking, as well as sufficient capacities to perform the task without depending on third parties, namely the resolution authority and/or the institution.

Comments to this consultation can be sent to the EBA by 11 October 2014. A public hearing will take place at the EBA premises on 16 September 2014 from 10:00 to 13:00 UK time.

Press release

Consultation paper

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