The Single Resolution Board its role and cooperation with the National Resolution Authorities

Transcription

1 The Single Resolution Board its role and cooperation with the National Resolution Authorities Mauro GRANDE, Single Resolution Board Milano 8 May, 2015

2 Outline I. SRB and its role - General aspects - Governance and tasks II. Cooperation with the National Resolution Authorities (NRAs) - General aspects - Cooperation on specific issues 2

3 3 Key objectives of the SRM/SRB BRRD already goes a long way to reduce the likelihood of resolving banks with public intervention convergence of resolution tools, principle of bail-in, establishment of national resolution funds, setting-up of resolution colleges SRM/SRB goes further than the BRRD by pursuing a more effective and harmonised cross-border resolution coverage of all cross-border banks, centralisation of decision-making process for resolution actions, creation of a Single Resolution Fund SRM/SRB also ensures institutional consistency within the Banking Union potential misalignment of incentives between the single supervisor and the national resolution authorities

4 4 Timeline for the establishment of the SRB SRB begins operations Establishment of the Commission Task Force for the set-up of the SRB May 2014 Adoption SRM Regulation July 2014 Delegated First Board meeting act on 2 March 2015 contributions Board fully operational Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Today Planning and implementation phase

5 5 SRB governance Administrative and management structure Plenary Session (PS) Executive Session (ExS) Chair Tasks (Art. 50) Tasks (Art. 54) Tasks (Art. 56(2)) SRB Secretariat (Art. 43(5)(d)) provides the necessary administrative and technical support

6 Sessions of the Board ExS Chair + Vice-Chair* + 4 full-time Board Members * Non voting member NRAs when relevant ECB EC Other observers - Meetings as often as necessary (currently twice per months) - Two main tasks: 1. prepare all the decisions to be adopted by the PS 2. take all of decisions to implement the SRM Regulation, unless provided otherwise. This inter alia covers: o preparation, assessment and approval of resolution plans o determination of the minimum requirement for own funds and eligible liabilities (MREL) o application of simplified obligations o preparation of resolution schemes o decisions on Board's part II of the budget on the SRF PS Chair + Vice-Chair* + 4 full-time Board Members * Non voting member ECB NRAs EC Other observers - Meetings at least bi-annually (more in the initial phase) - Two main areas of responsibility: 1. general matters not related to resolution activities:*** SRB's internal rules; HR matters; budget/finance; annual work programme and activity reports 2. SRF-related issues (SRMR and IGA): ex-post contributions, voluntary borrowing from non-participating resolution funds, alternative financing means, mutualisation of national financial arrangements; investment strategy *** Involved in resolution decision-making: - if the use of the Fund for a specific resolution scheme exceeds 5 bn EUR (and the weighting of liquidity support is 0,5), decision can be taken by the PS (Art. 50.2) - when the cumulative use of the Fund reaches 5 bn EUR in the previous 12 months, the PS can give guidance to the ExS on the subsequent use of the Fund (Art d) 6

7 7 Interplay between the Executive and the Plenary Sessions Executive Session (Chair + Vice-Chair + 4 full-time Board Members + NRAs when relevant + Observers) Resolution decision* Draft decisions relating to the PS tasks (Art. 50.1) Plenary Session (Chair + Vice-Chair + 4 full-time Board Members + NRAs + Observers) * Exception Art 50.2 use of Fund above 5 bn EUR Decision-making Cooperation NRAs

8 8 SRB/SRM versus ECB/SSM SRB/SRM ECB/SSM Executive Session (Chair + Vice-Chair + 4 full-time Board Members + NRAs when relevant + Observers) Plenary Session (Chair + Vice-Chair + 4 full-time Board Members + NRAs + Observers) Supervisory Board (Chair + Vice Chair + 4 ECB representatives + NCAs + Observers) Resolution decision Resolution scheme - exception art 50.2 use of Fund above 5bn EUR Draft supervisory decision Commission Resolution scheme (a) non-objection procedure for resolution schemes (b) approval/objection Fund material modifications of the amount Council Draft dec. Governing Council Nonobjection

9 II. Cooperation with the NRAs 9

10 SRM as an integrated system for bank resolution Clear allocation of responsibilities to the SRB and the NRAs: SRB directly responsible for resolution activities relating to significant banks (under ECB direct supervision) and other cross-border banks NRAs directly responsible for resolution activities relating to all other banks (provided no use of the Fund is required) But close interplay between the two SRM components: (1) SRB perform its own tasks in close collaboration with the NRAs: modalities of cooperation to be defined in a cooperation framework to be approved (and made public) under Art SRMR Internal Resolution Teams (Art SRMR) likely to be the concrete cooperation mode for the SRB resolution activities NRAs implement the SRB decisions (Art. 29 SRMR) (2) NRAs perform their own tasks under the coordination and oversight of the SRB: SRB responsible for the effective and consistent functioning of the SRM (Art. 7.1 SRMR) SRB issues guidelines and general instructions to NRAs, may request information to NRAs on the performance of their tasks, receives draft resolution decisions of NRAs (Art SRMR) Establishing good cooperation between the SRB and NRAs is crucial NRAs exercise their powers in accordance with the conditions laid down in national law transposing the BRRD (Article 29 SRMR) 10

11 SRM as an integrated system direct responsibilities SRB oversees the system and takes the decisions Principles of coordination between SRB and NRAs: assisting, instructing, cooperating, exchanging information supports indirect responsibilities Internal Resolution Teams (IRTs) National Resolution Authorities (NRAs) Significant institutions Cross-border groups 11 Less significant institutions

12 12 Cooperation within the SRM on resolution activities SRB is preparing in close collaboration with NRAs 2 handbooks for the conduct of resolution activities within the SRM to ensure a high quality and consistent approach: Manual on Resolution Planning: in line with the EBA standards on resolution planning it will cover also simplified obligations for the banks under the direct responsibilities of NRAs actual resolution planning for banks under direct responsibility of the SRB is being organised on the basis of a prioritisation and taking into account the different degree of development of resolution activities at NRAs Manual on Crisis Management and Resolution: steps and procedures for the preparation of and decisions on resolution schemes smooth interplay with the European Commission (DG COMP and DG FISMA) as a key aspect SRB is conducting in close collaboration with NRAs preparatory work on the establishment of the Single Resolution Fund : steps and procedures for the collection and payment of banks' contributions to the SRF

13 13 Cooperation within the SRM on cross-institutional and cross-border issues SRB may conclude an MoU with the ECB and the NCAs/NRAs on the cooperation and exchange of information for the resolution planning, early intervention and resolution phases (Art SRMR) general obligation to share information among all parties organisation of information flows in both directions relating to the direct responsibilities of the SRB and the ECB SRB to establish Resolution Colleges for all cross-border groups headquartered in the Banking Union and having a presence in non-participating Member States: no resolution colleges for groups present in the Banking Union only transformation of the Crisis Management Groups set up under the FSB aegis (Key Attributes) for the G-SIBs SRB will represent the NRAs of participating Member States in the Resolution Colleges SRB to establish different types of cooperation agreements with NRAs outside the Banking Union: MoU between the SRB, the ECB and the NRAs/NCAs of non-participating Member States (Art SRMR): possible role of participating NRAs to be clarified non-binding cooperation agreements with third-country authorities in line with EBA framework cooperation arrangements (Art SRMR): SRB acting on behalf of participating NRAs

14 14 Conclusion Preparatory work is well under way to be ready on 1/1/16 when the SRB becomes fully empowered current focus on building the SRM as a system, establishing the resolution planning activity and preparing for the handling of possible future resolution cases The path is not exempt from challenges including: BRRD not fully implemented yet NRAs at different degrees of development completely new resolution framework combination of building-up activities and starting of operational responsibility many relevant stakeholders involved in resolution activities staff recruitment Every effort made to ensure that the SRB becomes an institution up to the high expectations placed on it

15 Questions Thank you for your attention! 15

16 Interactions between different "layers" Commission & Council Single Resolution Fund notify manages ECB SSM Single Resolution Board instructs contribute National Competent Authorities National Resolution Authorities Owners / creditors supervise resolve Failed bank All banks Internal Market 16