29 September 2021

SRB bi-annual reporting note to Eurogroup

This note is aimed at reporting to Eurogroup on the SRB’s (1) forward looking approach to its 2022 priorities in terms of banks’ resolvability and (2) update regarding the operationalisation of the Single Resolution Fund, including the recent ex-ante contributions’ Court rulings.

1. SRB’s 2022 priorities

Priorities for 2022 in terms of banks’ resolvability

The SRB’s overarching priority remains to make banks fully resolvable by end-2023. To achieve this, the SRB
has set out (in 2020) in the SRB Expectations for Banks (“EfB”) the capabilities banks are expected to
demonstrate, in order to show they are resolvable, and 2022 is a key year for their phased-in implementation.
The SRB 2022 Work Programme will be published in November this year: it sets out the priorities in the different
SRB strategic areas and it is naturally rooted in the SRB’s Multi-Annual Programme 2021-2023. In the area of
resolvability for SRB banks, main priorities for the 2022 Resolution Planning Cycle (‘RPC’) include:
(i) Liquidity and Funding in resolution: The SRB will assess banks’ capabilities to identify, mobilise
and monetise assets that can be used as collateral in resolution. Banks will need to detect the
sources of liquidity and collateral in resolution to address the funding needs that were identified
as part of the 2021 RPC.

(ii) Separability and Reorganisation plans: Separability is a broad concept relevant to all resolution
strategies. It covers several expectations which are key for both resolution planning and the bail-
in implementation, such as business reorganisation plans (as outlined in the EfB). To support the
implementation of the EfB on transfer tools, a separability analysis report will be requested from
banks with transfer resolution strategy. The SRB will also publish an operational guidance to assist
banks in meeting this working priority.

(iii) Management information system (“MIS”) capabilities: Banks will be requested to further
demonstrate MIS capabilities to produce the datasets for bail-in execution and for valuation.
The abovementioned priorities are complemented by bank-specific priorities, as defined by the respective
Internal Resolution Teams (“IRTs”), both being communicated to banks through “priority letters” at the end of
September 2021.

Resolvability assessment

In the 2021 RPC, the SRB implemented for the first time a horizontal “heat-map” to monitor the progress made
by banks on EfBs implementation and MREL build-up, and their relative impact on the feasibility of the
resolution strategy. The heat-map (cf. a template in figure 1 below) takes into account proportionality by
considering banks’ business model characteristics and specific resolution strategies, and it ensures a level-
playing-field. Clearly, multiple iterations will be needed to ensure the heat-map provides a stable picture....

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