Since the resolution framework was established, the resolution authorities have focused on ensuring that institutions have in place systems and procedures to ensure resolvability. In this context, the Single Resolution Board (SRB) published “Expectations for Banks”, a document detailing the minimum resolvability requirements that institutions within the SRB’s remit were to meet by end-2023.
With institutions having reached these minimum requirements and the Single Resolution Fund now built up and fully mutualised, the SRB has embarked on a second phase, focused on the operationalisation of resolution plans and testing of the different aspects of resolvability. To this end, it announced SRM Vision 2028
, a strategic plan developing and detailing the content of this new phase that aims to ensure, through the use of regular testing, that a sufficient level of resolvability is reached and that the measures planned can be implemented. In this second phase, priority will also be given to ensuring the proper involvement of institutions’ structure and adapting their governance to resolution.
In the case of institutions under the direct responsibility of the Banco de España, the Bank Resolution Department (which is tasked with the preventive resolution functions) is guided by European and national legislation, which it adapts to the characteristics of each institution.
The Department’s functions notably include developing and updating the resolution plans of credit institutions within its remit and assessing their resolvability. The Banco de España therefore regularly informs credit institutions of any deficiencies or potential impediments to resolvability identified. It also regularly conducts preventive monitoring of each institution’s compliance with its MREL requirements.
The Banco de España is currently taking steps to simplify resolution plans, so as to be able to focus on the testing and operationalisation of resolution plans from 2025 onwards. In this respect, it has recently prepared a template for the resolvability self-assessment report for institutions.
Also notable is the multi-annual testing programme, which is currently being designed and developed. This programme will be applicable to credit institutions within its remit, and has the ultimate goal of verifying the resolution preparedness of both institutions and authorities and the efficiency of the strategy planned. This programme will be approved before end-2025 and will complement the programme that the institutions themselves must develop within their resolution governance framework.