The EACB welcomes the opportunity to comment on the EBA draft Guidelines (GLs) on overall recovery capacity in recovery planning.
We support the aim to continue improving crisis preparedness and set up a consistent framework for the operationalization and usability of recovery plans. At the same time we believe that recovery plans must preserve the institution specific dimension and expectations should be pragmatic.
In terms of timeline, we notice that no explicit application date is envisaged for the GLs and we understand that the EBA would see institutions starting to implement the fundamental elements before the GLs are actually applicable. We suggest instead to clarify that the new requirements and expectation for both institutions and competent authorities should apply only as of the next recovery planning cycle.
Indeed, for institutions subject to an annual recovery planning update, the cycle starts already in Q1/Q2 by receiving the findings of the competent authority from the previous year. The work is then coordinated between multiple departments and the updated recovery plan is drawn up in early Q3 and, after quality checks and due process, signed off and submitted to the competent authority in Q4 (deadline which for some banks can be even fixed as early as Q3). In order to ensure legal certainty and to ensure a smooth process, we believe that application from the 2024 recovery planning cycle is key.