The EACB welcomes the SRB’s Operational Guidance on Resolvability Testing for Banks as a step toward a more structured and transparent approach for assessing banks’ crisis preparedness and resolution capabilities. However, the EACB stresses that the principle of proportionality must be properly applied, particularly for SNCIs, to avoid excessive pressure on resources and cost burdens. We support a risk-based approach, but argue that more complex and frequent tests should only be required where higher risks are present, rather than being imposed uniformly.
The administrative and financial burden of setting up such dedicated test environments, applying extensive testing techniques, and preparing multitudes of deliverables will severely impact institutions and may fall unduly on these banks that often operate with simple business models and/or limited resources. For non-significant institutions, the extremely tight deadlines imposed by the national resolution authority create an additional layer of complexity, becoming an obstacle to optimally managing the implementation of obligations.
Finally, we notice the potential inconsistency between very detailed requirements set out in the SRB guidance and the ongoing EU Commission efforts for simplification and rationalisation of regulatory reporting. The introduction of templates, reporting obligations, and annual testing rounds does not seem to align with the efforts and guidance coming from the Commission regarding simplification efforts and overall competitiveness of the EU banking system.