The members of the EACB welcome the opportunity to comment on the EBA draft RTS on simplified obligations for recovery and resolution planning under Art. 4(6) BRRD.
- We note that the draft paper only focuses on the methodology of assessment for the eligibility for use of simplified obligations. While it is (half-heartedly) establishing a de minimis threshold, it never raises the question of whether certain simplified obligations might be sufficient for certain banks’ sizes. It therefore avoids the fundamental questions: When would simplified obligations be sufficient and when is a full-fledged recovery and resolution planning useful and meaningful?
- The approach of the document appears overly cautious. Many parts of it read as if the key question were a complete exemption of smaller banks from recovery and resolution planning and not simplified obligations.
- We would like to recall that a recovery plan should ideally also be a management tool.
As such, it should be aligned to the management structures and management systems of a bank. A disproportionately complex recovery plan could therefore be more counterproductive than useful, especially in the practical implementation phase.
- Overall, we see that the cooperative form of enterprise is not adequately taken into account in the development of the criteria and metrics of the qualitative assessment. Certain qualitative presumptions would result into an undue discrimination of cooperative banks.
- The proportionality thresholds may require other adjustments than those foreseen to better reflect the reality of Member States’ markets. Any thresholds should be consistent as much as possible with other acts of regulation (e.g. on FINREP, remuneration etc).
- We see the need for an implementation period in cases where the assessment of the competent authority results in a new requirement for the institution to draw up recovery plans without applying any simplified obligations. In situations where an institution could prepare simplified recovery plans but due to a new decision of the competent authority full obligations are required, the institution will be faced with an additional amount of work and therefore a need for additional resources. The institution should then have a sufficient implementation period to minimise additional costs and maintain the quality of the recovery plans. We consider that a period of at least 1 year before the next recovery plans are drawn up would be necessary.