The EACB welcomes the opportunity to comment on the draft EBA GLs for institutions and resolution authorities on improving resolvability.
Overall, we fear an excess of mandate in the approach taken by the EBA with regard to many elements outlined in this set of draft GLs. The resolution authority draws up and regularly updates the resolution plan: while it is true that, according to Art. 10(5) BRRD, resolution authorities may require institutions to assist them in the drawing up and updating of the resolution plans, we believe the GLs need reshaping to refrain from transferring duties of the resolution authority to institutions. In addition, wherever requirements for institutions are introduced, it must be borne in mind that any claims arising from the resolution planning may lead to liability risks for the resolution authority and to compensation claims against the SRF since the resolution plan has to be drawn up by the resolution authority.
In this vein, as far as resolution planning is addressed, we advise against the approach of the draft GLs to link “not fully complete resolution preparedness” to resolution impediments. The legislative basis stipulates that the resolution authority draws up the resolution plan and identifies any material impediments to resolvability. It is the resolution authority which outlines relevant actions for how those impediments could be addressed. Therefore, the draft GLs in their current form cannot be addressed to institutions as the content is addressed to resolution authorities.
Our members also do not support the proposal to introduce a system of “shifting the burden of proof”. If the resolution authority in its activities does not come into contact with deficient/insufficient resolution planning/resolvability, it should be assumed that the institution is resolvable.
Finally, the GLs relate to topics for which guidance already exists. In light of this, it is important that the GLsare aligned with policies/guidance that the SRB has already issued (i.e. SRB Expectations for Banks (EfB), SRB Operational Guidance on Operational Continuity in Resolution, SRB Operational Guidance for FMI Contingency Plans, SRB Operational Guidance on Bail-in Playbooks, Technical Notes issued by IRTs to the individual banks with reference to these topics etc.) or pare them down where the SRB has set unrealistic expectations.