The report does not aim to impose additional requirements on banks. However, it makes reference to specific requirements set by the Bank Recovery and Resolution Directive (BRRD), the relevant Commission Delegated Regulation and European Banking Authority (EBA) guidelines. The ECB expects banks to comply with all these requirements in line with the law.
Overall, the report:
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clarifies the supervisory experience in relation to certain recovery plan-related requirements that have already been set by existing legislation;
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provides additional insights into a selection of practices adopted by some banks that may help other institutions further improve their recovery plans.
The scope of the report is limited to SIs.
ECB Banking Supervision has conducted three cycles of recovery plan assessments since the Single Supervisory Mechanism was established, and has performed comprehensive benchmarking analyses that were used to identify the lessons learned and best practices presented in this report.
One of the key conclusions of the benchmarking analyses was that recovery plans are not always operational during a stress situation and, thus, their usability could be improved. Recovery plans are useful tools that bank managers can employ in order to overcome crisis situations, but only if they are properly designed. When the ECB assesses recovery plans in future, it will increasingly focus its assessment on whether there is sufficient evidence that the recovery plan and individual recovery options can be implemented in a timely and effective manner, even in situations of severe stress.
The ECB encourages banks to consider the general lessons learned and best practices presented in this report when updating their recovery plans. However, for bank-specific feedback they receive individual feedback letters from the Joint Supervisory Teams. When reading the report, banks should also bear in mind the principle of proportionality, as the general considerations presented in this report depend on many factors, such as the nature of the banks’ business, the risks they are exposed to, their size and complexity and their capacity to react to a crisis in a timely and effective way.
Full report
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