Decision on recovery plans of credit institutions. Subject matter Article 1

Transcription

1 Pursuant to Article 101, paragraph (2), item (8) and Article 154, paragraph (2) of the Credit Institutions Act (Official Gazette 159/2013) and Article 43, paragraph (2), item (9) of the Act on the Croatian National Bank (Official Gazette 75/2008 and 54/2013), the Governor of the Croatian National Bank hereby issues the Decision on recovery plans of credit institutions 1 GENERAL PROVISIONS Subject matter Article 1 1) This Decision prescribes in detail the manner and scope of application of the requirements related to drawing up of recovery plans of credit institutions and the content of such plans and the manner of and time limits for their submission. (2) This Decision shall apply to credit institutions which have their head office in the Republic of Croatia and are authorised by the Croatian National Bank. (3) This Decision shall, as appropriate, apply to a branch of a third-country credit institution authorised by the Croatian National Bank to provide services. Definitions Article 2 The individual terms used in this Decision shall have the following meaning: 1) "extraordinary public financial support" means state aid within the meaning referred to in Article 107, paragraph (1) of the Treaty on the Functioning of the European Union or any other public financial support on supranational level which would, were it to be granted on a national level, constitute state aid which is granted for the purpose of maintaining or restoring sustainability, liquidity or solvency of a credit institution or a group; 2) "critical functions" are activities, services or operations the termination of provision of which in one or more Member States would probably lead to a termination of services vital for the real economy or disturbances in the financial stability due to the size, market share, external and internal interdependence, complexity or cross-border activities of a credit institution or a group, particularly in light of substitutability of these activities or services; 1

2 3) "core business lines" are business lines and the accompanying services which provide material sources of income, profit or the value of the franchise for a credit institution or a group to which the credit institution belongs; 4) "guarantee within a group" is an agreement whereby one entity in a group guarantees to a third party for the obligations of another entity in a group; 5) "material change" is each change which has the potential to affect the ability of a credit institution or a parent undertaking or one or more subsidiaries of that credit institution to implement a recovery plan or apply the recovery option envisaged in the recovery plan; 6) "early warning signals" are benchmarks which constitute a part of the internal risk management procedure of a credit institution or a group of credit institutions and which are used for monitoring its financial situation and reporting to the management on the signals which might materialise; 7) "material branch or legal entity" is a branch or an undertaking significantly contributing to the profit of a credit institution for which a recovery plan is being drawn up or to its financing or accounting for an important share of its assets, liabilities or capital and meeting either of the following conditions: a) performs critical functions; b) performs critical operational functions within a group, risk management function or administrative functions; c) carries great risk, which under the worst case scenario may threaten sustainability of a credit institution or a group of credit institutions; d) may not cease operating without contributing to a significant risk for a credit institution or a group of credit institutions; or e) a branch or an undertaking is vital for the financial stability in at least one Member State in which it has a head office or in which it operates; 8) "recovery options" are activities, agreements, measures or strategies of a credit institution or a group covered by a recovery plan which are aimed at restoring financial stability in the situations of a severe financial distress; 9) "material impediment" is each factor which has the potential to negatively influence the timely execution of the recovery option, in particular legal, operational, business, financial and reputation risk as well as any other risk that may result in a reduction of the credit rating of a credit institution; 10) "reverse stress testing" is a form of stress testing which is based on the possible result of a near-default and identifies the circumstances in which this could take place; 2

3 11) "situations of a severe financial distress" are situations which threaten the financial intermediation function of a credit institution to the point of its market survival, i.e. its further undisturbed provision of services for which it is authorised and which may caused by an external or an internal event. Scope of application of the Decision Article 3 (1) A credit institution which is not a part of a group of credit institutions in the Republic of Croatia and a credit institution which is excluded from a group of credit institutions in the Republic of Croatia in accordance with Article 19 of Regulation (EU) No 575/2013 shall apply the provisions of this Decision on an individual basis. (2) A parent credit institution in the Republic of Croatia shall apply the provisions of this Decision on a consolidated basis to its group of credit institutions in the Republic of Croatia. (3) The recovery plan drawn up by the parent credit institution in the Republic of Croatia for its group of credit institutions in the Republic of Croatia shall apply to all members of the group and shall contain measures the implementation of which is required on the level of a parent credit institution in the Republic of Croatia as well as on the level of each subsidiary individually (hereinafter: group recovery plan). (4) The provisions of paragraphs (1) and (2) of this Article shall not apply in cases where based on the Credit Institutions Act, a mutual decision has been reached that a credit institution with a head office in the Republic of Croatia which is a part of a group of credit institutions in the European Union is not obligated to draw up an individual recovery plan. 2 RECOVERY PLAN DRAWING UP AND MONITORING Recovery plan drawing up procedure Article 4 (1) A credit institution shall draw up and apply the recovery plan referred to in Article 154, paragraph (1) of the Credit Institutions Act determining the measures for improving its financial position in situations of a severe financial distress. (2) A credit institution shall ensure that the recovery plan meets the following conditions: 3

4 1) the implementation of the measures proposed in the plan shall ensure and restore sustainability of regular operations and stability of the financial position of a credit institution in situations of a severe financial distress, taking into account preparatory measures which the credit institution has taken or plans to take; and 2) quick and efficient implementation of the recovery plan and the measures envisaged under this plan in situations of a severe financial distress so as to avoid adverse consequences to the financial system, including the situations of simultaneous implementation of recovery plans in other financial system institutions. (3) The recovery plan shall not assume availability of extraordinary public financial support or receipt thereof. (4) The aim of the recovery plan for a group is to achieve stability of the group as a whole or stability of any member of the group in situations of a severe financial distress, for the purpose of resolving or eliminating the cause of the distress and improving the financial position of a group or the credit institution, while taking account of the financial position of other entities in the group. (5) A credit institution shall adopt and implement a policy specifying in detail the procedure for drawing up, implementing and updating the recovery plan. (6) A credit institution shall document and regularly monitor the procedure for drawing up, implementing and updating the recovery plan. (7) A credit institution shall provide the Croatian National Bank with complete and detailed information on the procedure for drawing up, implementing and updating the recovery plan. 3 CONTENTS OF THE RECOVERY PLAN Key information and summary of the recovery plan Article 5 (1) A credit institution shall include the following information in the recovery plan: 1) summary of the key elements of the recovery plan; 2) information on governance; 3) strategic analysis; 4) communication and public disclosure plan; and 5) preparatory measures analysis. 4

5 (2) The summary of the key elements of the recovery plan referred to in paragraph (1), item 1) of this Article shall contain the following information: 1) a summary on governance; 2) a strategic analysis summary, including the summary of overall recovery possibility; 3) a summary of each material change in a credit institution, a group of credit institutions or a recovery plan that has taken place since the delivery of the last recovery plan to the Croatian National Bank; 4) a summary of the communication and public disclosure plan; and 5) a summary of preparatory measures. Governance Article 6 The part of the recovery plan relating to governance shall include a detailed description of the following information on: 1) the manner of drawing up the recovery plan, including: a) the role and the functions of the persons responsible for the drawing up, implementation and updating of each particular part of the plan and of the plan as a whole; b) procedures in the situations where the recovery plan needs to be amended due to material changes which affect the credit institution, its group or the environment in which they operate; c) a description of the integration of the recovery plan in the corporate governance system and in the overall risk management system of a credit institution or a group it belongs to, in particular as regards its risk profile and the link between the recovery plan and stress testing in the internal capital adequacy assessment process (hereinafter: ICAAP) and ICAAP in general; d) where a recovery plan is drawn up for a group of credit institutions, a description of the measures taken and agreements concluded on a group level which ensure coordination and consistency of the recovery option of a group as a whole and each subsidiary; 2) policies and procedures of the recovery plan approval, including: a) whether the recovery plan has been evaluated by an internal auditor, external auditor or a risk committee; b) a confirmation that the recovery plan was assessed and approved by the management board of a credit institution, indicating whether the supervisory board has given its approval; 5

6 3) processes and procedures for ensuring timely implementation of the recovery options, including: a) a detailed description of the indicators referred to in Article 7 of this Decision; b) a description of the decision-taking procedure regarding the implementation of a recovery option in response to a situation of a severe financial distress when individual indicators reach the value defined under the recovery plan for considering taking the recovery plan measures (including the role and the functions of the persons included in the procedure, the procedures that need to be applied and the time and the manner of notification to the Croatian National Bank that the indicators have reached the determined values); 4) internal information and reporting system, including a description of the manner in which timely and reliable information are made available which are necessary for decision-taking regarding the use of the recovery option in situations of a severe financial distress. Recovery plan indicators Article 7 (1) The recovery plan shall contain indicators which reveal possible vulnerabilities, weaknesses or threats to different areas of business, in particular as regards: capital; liquidity; profitability; and risk profile. (2) The indicators referred to in paragraph (1) of this Article shall relate to the financial position of a credit institution in case of an individual recovery plan or to the financial position of a group of credit institutions in case of a group recovery plan. The indicators shall be qualitative and quantitative and easily monitored. (3) The indicators referred to in paragraph (1) of this Article shall be consistent with the indicators used by a credit institution or a group for which a recovery plan is drawn up in the risk management process and shall include as a minimum: 1) capital indicators, i.e. common equity tier 1 capital ratio, the total capital ratio and the leverage ratio; 2) liquidity indicators, i.e. the minimum liquidity coefficient - MLC, the liquidity coverage ratio - LCR and the net stable funding ratio (NSFR); 3) asset quality indicators, i.e. the share of non-performing placements in total placements and the coverage of non-performing placements by value adjustments; 6

7 4) profitability indicators (such as return on assets, ROA or return on equity, ROE); and 5) other indicators (such as market based indicators, macro indicators, etc.). (4) The recovery plan shall contain an explanation for the selection of each individual indicator and the selected levels of this indicator. The level of an indicator that is being monitored should be set in such a manner that it ensures timely taking of the recovery plan measures. A credit institution shall, as a minimum once a year, and if necessary more frequently, review the efficacy of the selected indicators and the selected levels of their values. (5) A credit institution shall set up an adequate system for regular monitoring of the selected indicators and prescribe by means of internal by-laws as a minimum the dynamics and the manner of monitoring as well as the reporting procedure. (6) Where a credit institution establishes by regular monitoring of the selected indicators that these indicators have reached the level determined for taking recovery plan measures, the management board of the credit institution shall, within no more than five working days, take a decision on taking or refraining from taking the recovery plan measures and inform the Croatian National Bank thereof without delay. A credit institution that has taken a decision to refrain from taking the recovery plan measures shall provide a detailed explanation of any such decision. (7) The management board of a credit institution may take a decision on taking the measures envisaged under the recovery plan even though the determined indicators have not reached the level envisaged for taking measures and shall inform the Croatian National Bank thereof without delay. Strategic analysis Article 8 (1) In a strategic analysis, a credit institution shall determine core business lines and critical functions and determine the procedures necessary to maintain their functioning in situations of a severe financial distress. (2) The strategic analysis contained in the recovery plan shall include the following: a) information on a credit institution and members of a group to which the recovery plan relates; and b) recovery options. 7

8 Recovery plan information on credit institutions and group members Article 9 The information referred to in Article 8, paragraph (2), item a) of this Decision shall include the following: 1) general information on a credit institution and members of a group covered by the recovery plan, including: a) a description of their general business strategy and risk strategy; b) the business model and the business plan, including a list of countries in which they operate through material branches of other legal entities; c) core business lines and critical functions; d) a description of the procedures and methods for determining core business lines and critical functions; 2) distribution of core business lines and critical functions across material branches and legal entities in a group; 3) a description of intra-group connections of all connected legal entities and a detailed description of the legal and financial structure of a credit institution or a member of a group to which the recovery plan relates, and in particular a description of the following: a) all existing significant intra-group exposures, financing and capital flows within a credit institution or a group, existing guarantees within a group or guarantees the provision of which is, as appropriate, envisaged by the recovery plan; b) legal links, including all important legally binding intra-group agreements such as agreements on dominant influence or agreements on profit and loss transfer; c) operational links, i.e. the existence of centralisation of the functions important for the operation of other legal entities, branches or a group as a whole, in one legal entity or a branch and particularly the information technology functions, treasury functions, risk control functions or administrative functions; d) all the existing agreements on intra-group financial support, providing details of each such agreement such as the names of the members of the group who are parties to those agreements and the form and the conditions under which the financial support is provided; 4) a description of external links including: a) a description of significant exposures and obligations to material counterparties; 8

9 b) a description of important financial products and services which a credit institution or a member of a group covered by the recovery plan provide to other participants in the financial markets; and c) a description of important services provided by counterparties to a credit institution or a member of a group covered by the recovery plan. Recovery options Article 10 (1) The recovery plan shall contain a wide range of recovery options in response to situations of a severe financial distress. Recovery options shall be such that it can be expected that their use will help a credit institution or a group for which the plan is being drawn up to maintain or restore sustainability of their operations and financial position. (2) The recovery options shall be described in such a way that it is possible to assess the impact and feasibility of each recovery option. (3) The recovery options shall include regular measures, common for the business operations of a credit institution or a member of a group covered by the recovery plan, as well as extraordinary measures. A measure provided for under the recovery options may envisage changes in the business operations of a credit institution or a member of the group, in which case such a fact cannot constitute a ground for its exclusion from the recovery options. (4) The recovery plan shall also include measures which a credit institution may take provided the conditions for early intervention referred to in the Credit Institutions Act have been met. Contents of the recovery options Article 11 (1) In the section relating to recovery options, a credit institution shall list all recovery options and provide a detailed description and analysis of each option. (2) The recovery options shall contain an overview of the following envisaged activities, agreements, measures or strategies: a) activities in the area of capital and liquidity required to maintain or restore business sustainability and financial situation of a credit institution or 9

10 members of a group covered by the recovery plan, the main objective of which is to ensure sustainability of critical functions and core business lines; b) agreements and measures the main objective of which is to maintain or restore the required own funds of a credit institution or own funds on a consolidated group level through increase in own funds and other measures so as to improve the capital situation of a credit institution or a group for which the plan is being drawn up; c) agreements and measures aimed at ensuring access to sources of financing in extraordinary and contingent situations so as to ensure further provision of services and meeting of obligations as they fall due. These measures shall be external measures or measures of reorganisation of the liquidity available within a group. Contingent sources of financing shall include potential sources of liquidity, the assessment of available instruments of collateral and the assessment of the possibility of liquidity transfer within a group and between individual business lines, including, where appropriate, an analysis of the possibilities of how and when an institution may, under the conditions determined by the plan, resort to the use of central bank instruments, specifying the assets that might be used as an instrument of collateral; d) agreements and measures aimed at reducing risk and leverage, i.e. business lines restructuring, including, where necessary, an analysis of the possible material sale of assets. legal entities or business lines; e) agreements and measures aimed at achieving a voluntary liabilities restructuring, provided this does not lead to events such as default, termination of agreement, reduction in the value of assets of a credit institution or members of a group covered by the recovery plan, etc.; and f) other measures and strategies which ensure and restore the sustainability of regular operations and stability of the financial position of a credit institution or members of a group covered by the recovery plan. (3) By way of derogation from paragraph (2) of this Article, a credit institution which is not significant may, when drawing up a recovery plan, leave out some of the listed activities, agreements or measures and provide a detailed explanation why these have been left out. (4) The recovery options shall contain an assessment of the impact or each individual recovery option, including the following: a) an assessment of the financial and operational impact, indicating the expected impact on solvency, liquidity, sources of financing, profitability and business of the credit institution or a member of a group for which a recovery plan is being drawn up, and which is affected by an option; 10

11 b) an assessment of the external impact and an assessment of systemic consequences, indicating the expected impact on critical functions of a credit institution and members of a group covered by the recovery plan and their impact on shareholders, clients and counterparties; c) valuation assumptions and all other assumptions necessary for the assessment of items a) and b) of this paragraph, including the assumption of asset marketability and behaviour of other entities on the financial market. (5) The assessment of the impact referred to in paragraph (4) of this Article shall include a detailed description of the procedures for determining the value and marketability of core business lines, the part of business operations and assets of a credit institution or members of a group covered by the recovery plan. (6) The recovery options shall contain an assessment of the feasibility of each individual recovery option, in particular: a) an assessment of the risk associated with an individual recovery option, based on experience in the implementation of such a recovery option or similar measures; b) a detailed analysis and a description of material obstacles to an efficient and timely implementation of the plan and a description of the manner in which such obstacles may be removed; c) an analysis of the possible obstacles to efficient implementation of each individual recovery option which arises from the structure of the group or intra-group agreements, including the existence of a material practical or legal obstacle to a prompt transfer of own funds, settlement of liabilities or realisation of assets within a group (in case of a group recovery plan) and the description of the manner in which these obstacles can be removed; and d) an assessment of the manner of ensuring business continuity every time an individual recovery option is used. (7) The assessment of business continuity referred to in paragraph (6) of item d) of this Article shall include an analysis of: internal activities (e.g. information systems, relationships with suppliers and human resource management); the access of the credit institution or members of a group covered by a recovery plan to market infrastructure, such as access to clearing and settlement as well as to payment systems; all agreements and measures needed to maintain continuous access to the necessary financial market infrastructure; and 11

12 all agreements and measures needed to maintain continuous functioning of operating processes or a credit institution or members of a group covered by the recovery plan, including infrastructure and information technology support. (8) The recovery options shall contain an assessment of the expected time frame needed for the implementation and efficiency of each individual recovery option. (9) The recovery options shall also contain an assessment of the efficiency of the recovery options and indicators' adequacy in selected situations of a severe financial distress. This assessment shall determine which of the recovery options is suitable for a particular scenario, the possible impact of the recovery option, its feasibility and material obstacles to its implementation and the time frame for its implementation. (10) The assessment shall determine the possibility for overall recovery of a credit institution and members of a group covered by the recovery plan, including the possibility of their recovery in the conditions of a severe financial distress. (11) The recovery plan shall include mechanisms which ensure coordination and consistent application of the recovery options on the level of the parent EU company, subsidiary level and, where appropriate, on the level of material branches. Communication and public disclosure plan Article 12 (1) As an integral part of the recovery plan, the communication and public disclosure plan referred to in Article 5, paragraph (1), item 4) of this Decision shall contain: a) an internal communication plan, in particular communication with employees, unions, workers' councils or other employee representatives; b) an external communication plan, in particular communication with shareholders and other investors, competent and resolution authorities, counterparties, financial markets, financial markets infrastructure, depositors, and, where appropriate, with the public; c) proposals for efficient management of potential negative market reactions. (2) The recovery plan shall also include an analysis of the manner of application of the communication and public disclosure plan in the case of implementation of one or more recovery plan measures or agreements. 12

13 (3) The communication and public disclosure plan shall also provide for special communication needs associated with a particular recovery option. Preparatory measures Article 13 (1) The recovery plan shall include an analysis of the preparatory measures that a credit institution or a group for which a plan is being drawn up has taken or will need to take to facilitate implementation or improvement of the efficacy of the recovery plan. (2) The recovery plan shall define a time frame for the implementation of the preparatory measures referred to in paragraph (1) of this Article. (3) The preparatory measures shall contain measures for removing the obstacles identified in the recovery plan which are necessary for efficient implementation of the recovery options. 4 RECOVERY PLAN STRESS SCENARIOS Stress scenarios Article 14 (1) A credit institution shall, taking into account the nature, scope and complexity of its activities, prepare a range of stress scenarios of a severe financial distress so as to determine various hypothetical events on which it will test the effect and feasibility of its recovery plan. (2) To test a recovery plan, a significant credit institution shall use as a minimum three scenarios of a severe financial distress: 1) a scenario that would include overall system systemic events representing events which might have severe negative effects on the financial system or the real economy; 2) a credit institution- or a group-specific scenario representing events which might have serious negative effects on a credit institution, a group or a credit institution within a group; and 3) a combination of these two scenarios which take place simultaneously and are interactive. (3) A non-significant credit institution may carry out stress testing using a single scenario which comprises several systemic events referred to in Article 17 of this 13

14 Decision and several events referred to in Article 18 of this Decision and which are specific of a credit institution or a group for which the recovery plan is being drawn up. (4) A credit institution shall conduct stress testing of its recovery plan not less than once a year. Stress testing requirements Article 15 (1) When preparing the stress scenarios referred to in Article 14 of this Decision, a credit institution shall make sure they meet the following requirements: 1) the scenario shall be based on the most relevant events for a credit institution or a group, taking account of the business and the financing model, the activities and the structure, size or interconnectedness with other financial system entities or the financial system as a whole, particularly of the identified weaknesses of a credit institution or a group; 2) the events envisaged in the scenario would lead to a failure of a credit institution or a group in the case of a failure to apply on time the recovery measures; and 3) the scenario is based on extraordinary but possible events. (2) Where possible, a credit institution shall include in each stress scenario an assessment of the impact of these events on each of the following aspects of business of a credit institution or a group: 1) available capital; 2) available liquidity; 3) business model; 4) profitability; 5) payment and settlement systems; and 6) reputation. (3) When developing stress scenarios which would lead to a situation where a business model of a credit institution or a group is not sustainable without successful application of recovery plan measures, a credit institution shall consider the possibility of applying a reverse stress testing. Number of stress scenarios Article 16 (1) A credit institution shall adjust the number of stress scenarios to the nature, scope and complexity of the activity of a credit institution or a group for which a recovery plan is being drawn up, interconnectedness with other institutions and the financial system in general and its financing models. 14

15 (2) Systemically important credit institutions defined in Articles 135 and 137 of the Credit Institutions Act shall apply more than three scenarios. (3) The range of stress scenarios, in the case of significant credit institutions shall also include slow and fast moving events. Scenario covering systemic events on overall system level Article 17 (1) When preparing a stress scenario for systemic events on overall system level, a significant credit institution shall take into account, as a minimum, the influence of the following events: 1) failures of significant counterparties which affect the financial stability of the entire system; 2) a fall in the available liquidity on the interbank market; 3) increased sovereign risk and capital outflows from significant countries in which a credit institution or a group operates; 4) unfavourable developments in real estate prices and other forms of assets in one or several relevant markets; and 5) macroeconomic crisis. (2) By way of derogation from paragraph (1) of this Article, a credit institution may, after having made a detailed analysis, decide that one of the events referred to in paragraph (1) of this Article is not relevant for it, and shall in such a case provide a detailed explanation for any such decision in its recovery plan. Credit institution-specific scenario Article 18 (1) When drawing up a stress scenario for events specific for a credit institution or a group, a significant credit institution shall take into account, as a minimum, the influence of the following events: 1) failures of significant counterparties; 2) damaged reputation of a credit institution or a group; 3) significant liquidity outflows; 4) unfavourable developments in the prices of real estate and other forms of assets that a credit institution or a group is exposed to in one or more relevant markets; 5) significant loan losses; and 6) significant losses arising from operational risk. 15

16 (2) By way of derogation from paragraph (1) of this Article, a credit institution may decide, after having made a detailed analysis that one of the events referred to in paragraph (1) of this Article is not relevant for it, and shall in such a case provide a detailed explanation for any such decision in its recovery plan. 5 SCOPE OF APPLICATION Recovery plan scope Article 19 (1) A significant credit institution shall apply all the provisions of this Decision in their entirety. (2) For the purposes of this Decision, a significant credit institution shall be each credit institution the average amount of assets of which at the end of the previous three business years, shown in the audited financial statements, exceeds the amount of HRK 7bn. (3) A non-significant credit institution may reduce the number of recovery options in accordance with Article 11, paragraph (3) of this Decision, reduce the number of events when making stress scenarios in accordance with Articles 14 to 18 of this Decision and reduce the requirements under which the persons responsible for the drawing up of the recovery plan may not be the persons responsible for stress testing of recovery plans in accordance with Article 20, paragraph (2) of this Decision. (4) By way of derogation from paragraph (3) of this Article, the Croatian National Bank may issue a decision requiring a non-significant credit institution to apply the provisions of this Decision in an extended or full scope. 6 DRAWING UP THE RECOVERY PLAN Drawing up, adoption and review of recovery plans Article 20 (1) The control risk function of a credit institution shall: coordinate the drawing up of the recovery plan; monitor indicators and report to the management board on the values of the 16

17 selected indicators; prepare scenarios and conduct stress testing of recovery plans; and report to the management board on the process of drawing up, need for updating and implementation of the recovery plan and the results of the stress testing of the recovery plans. (2) A significant credit institution shall ensure that the persons responsible for drawing up a recovery plan are not the persons responsible for conducting stress testing of the recovery plans. (3) A credit institution shall not fully outsource recovery plan drawing up. (4) The management board of a credit institution shall assess and adopt a recovery plan, subject to a prior approval from the supervisory board. (5) The internal audit of a credit institution shall conduct assessment of the recovery plan and the application and efficiency of the procedures of drawing up, adoption and monitoring of recovery plans execution. 7 REPORTING TO THE CROATIAN NATIONAL BANK Article 21 (1) A credit institution shall update as a minimum once a year the existing recovery plan or, where appropriate, draw up a new recovery plan and submit it to the Croatian National Bank by 30 June of the current year at the latest. (2) A credit institution shall also update its recovery plan after each material change and submit it to the Croatian National Bank without delay. 8 TRANSITIONAL AND FINAL PROVISIONS Entry into force Article 22 (1) This Decision shall enter into force on the eighth day from its publication in the Official Gazette, with the exception of provisions of Article 3, paragraph (4) and Article 10, paragraph (4) which shall enter into force on 1 January

18 (2) A credit institution shall submit the first recovery plan under this Decision to the Croatian National Bank by 31 December 2014 at the latest. No.: /06-14/308 Zagreb, 17 June 2014 Boris Vujčić Governor 18