The EBA publishes resolvability guidelines

News 14 tammikuuta 2022

The European Banking Authority (EBA) has, on 13 January, published guidelines on resolvability. The guidelines introduce an EU-wide minimum standard for resolvability within a number of areas, and are chiefly addressed to systemically important banks. The guidelines aim to improve the resolvability of such banks.

The Debt Office’s preliminary assessment is that the Debt Office intends to comply with the guidelines. The Swedish systemically important banks can thus presume that they should follow the guidelines. When the EBA has published the translations of the guidelines, the Debt Office will formally inform the EBA how we intend to comply with them. The information will also be published on the Debt Office’s website.

A resolvable bank is, in brief, a bank that can be restructured or wound up through resolution without causing any significant adverse effect on the financial system. Assessing a bank’s resolvability is thus a core element of the Debt Office’s resolution planning. Follow-up on compliance with the guidelines will therefore be performed and will be a key part of the Debt Office’s assessment of the Swedish systemically important banks’ resolvability.

The guidelines are comprehensive and come into force on 1 January 2024. It is therefore important that, already now, the banks start working on compliance with the guidelines. To facilitate these efforts, in the near future the Debt Office plans to issue more information about what is expected of the banks over the next two years.

Legal status of the guidelines

Guidelines from the EBA directed at resolution authorities and financial institutions are, according to the Debt Office, to be equated to Swedish general guidelines. Under Regulation (EU) No 1093/2010 of the European Parliament and of the Council establishing the EBA, the competent authorities and financial institutions shall make every effort to comply with these guidelines. Since the regulation is directly effective, the Debt Office will not issue any general guidelines of its own. The Debt Office may, if needed, rework the guidelines into binding rules in the form of regulations.

Link to the guidelines on the EBA’s website