Cooperation with supervision and input into Recovery and ...

1 1 Vienna, December 12, 2016 Cooperation with supervision and input into Recovery and resolution ( planning ) from a host country perspective Krzysztof Broda Bank Guarantee Fund FINSAC BANK resolution CONFERENCE 2 The statutory mandate of a resolution authority should empower and strongly encourage the authority wherever possible to act to achieve a cooperative solution with foreign resolution authorities. Cooperation and information sharing FSB Key Attributes for Effective resolution Regimes Principles Legal framework condition for cross-border cooparation - p. p. The resolution authority should have the capacity in law, subject to adequate confidentiality requirements and protections for sensitive data, to share information, including RRPs, pertaining to the group as a whole or to individual subsidiaries or branches, with relevant foreign authorities (for example, members of a CMG), where sharing is necessary for Recovery and resolution planning or for implementing a coordinated resolution .

2 For all G-SIFIs, at a minimum, institution-specific Cooperation agreements, containing the essential elements set out in Annex I, should be in place between the home and relevant host authorities that need to be involved in the planning and crisis resolution stages. Institution-specific cross-border Cooperation agreements - p. 3 Home and key host authorities of all G-SIFIs should maintain CMGs with the objective of enhancing preparedness for, and facilitating the management and resolution of, a cross-border financial crisis affecting the firm. CMGs should include the supervisory authorities, central banks, resolution authorities, finance ministries and the public authorities responsible for guarantee schemes of jurisdictions that are home or host to entities of the group that are material to its resolution , and should cooperate closely with authorities in other jurisdictions where firms have a systemic presence.

3 Participation FSB Key Attributes for Effective resolution Regimes Principles Crisis Management Groups (CMGs) - p. 4 Member States shall require that authorities exercising supervision and resolution functions and persons exercising those functions on their behalf cooperate closely in the preparation, planning and application of resolution decisions, both where the resolution authority and the competent authority are separate entities and where the functions are carried out in the same entity. Cooperation BRRD Principles Art. 3 par. 4 Art. 87 (c), (l) Member States shall ensure that, when making decisions or taking action pursuant to this Directive which may have an impact in one or more other Member States, their authorities have regard to the following general principles.

4 That resolution authorities, competent authorities and other authorities cooperate with each other to ensure that decisions are made and action is taken in a coordinated and efficient manner; .. recognition that coordination and Cooperation are most likely to achieve a result which lowers the overall cost of resolution . 5 The following shall be members of the resolution college: (a) the group-level resolution authority; (b) the resolution authorities of each Member State in which a subsidiary covered by consolidated supervision is established; (c) the resolution authorities of Member States where a parent undertaking of one or more institutions of the group, that is an entity referred to in point (d) of Article 1(1), are established.

5 (d) the resolution authorities of Member States in which significant branches are located; (e) the consolidating supervisor and the competent authorities of the Member States where the resolution authority is a member of the resolution college. Information exchange Participation BRRD Principles Subject to Article 84, resolution authorities and competent authorities shall provide one another on request with all the information relevant for the exercise of the other authorities tasks under this Directive. Art. 90 par. 1 Art. 88 par. 2 6 In particular, resolution colleges shall provide a framework for the group-level resolution authority, the other resolution authorities and, where appropriate, competent authorities and consolidating supervisors concerned to perform the following tasks: (a) exchanging information relevant for the development of group resolution plans, for the application to groups of preparatory and preventative powers and for group resolution ; (b) developing group resolution plans pursuant to Articles 12 and 13.

6 (c) assessing the resolvability of groups pursuant to Article 16; (d) exercising powers to address or remove impediments to the resolvability of groups pursuant to Article 18; (e) deciding on the need to establish a group resolution scheme as referred to in Article 91 or 92; (f) reaching the agreement on a group resolution scheme proposed in accordance with Article 91 or 92; (g) coordinating public communication of group resolution strategies and schemes; (i) setting the minimum requirements for groups at consolidated and subsidiary level under Article 45.

7 In addition, resolution colleges may be used as a forum to discuss any issues relating to cross-border group resolution . Participation BRRD Principles Art. 88 par. 1 (c), (l) 7 SRM Financial Stability Committee Supervisor PFSA DGS/RA BGF Regulator MF Central Bank* NBP Crisis management group resolution college Supervisory college SRB NRA NCA 3rd country NRA 3rd country NRA ECB NRA NCA SSM ECB 3rd country NCA 3rd country NCA Ministries of Finance Non BU NCA Non BU NRA Institutional landscape 8 Recovery plan The competent authority shall provide the Recovery plan to the resolution authority. The resolution authority may examine the Recovery plan with a view to identifying any actions in the Recovery plan which may adversely impact the resolvability of the institution and make recommendations to the competent authority with regard to those matters.

8 The consolidating supervisor shall, provided that the confidentiality requirements laid down in this Directive are in place, transmit the group Recovery plans to: (a)the relevant competent authorities referred to in Articles 115 and 116 of Directive 2013/36/EU; (b)the competent authorities of the Member States where significant branches are located insofar as is relevant to that branch; (c)the group- level resolution authority; and (d)the resolution authorities of subsidiaries. That assessment shall be made in accordance with the procedure established in Article 6 and with this Article and shall take into account the potential impact of the Recovery measures on financial stability in all the Member States where the group operates.

9 Development and assessment Art. 6 par. 4 Art. 7 par. 3 Art. 8 par. 1 9 resolution plan The resolution authority, after consulting the competent authority and after consulting the resolution authorities of the jurisdictions in which any significant branches are located insofar as is relevant to the significant branch shall draw up a resolution plan for each institution that is not part of a group subject to consolidated supervision pursuant to Articles 111 and 112 of Directive 2013/36/EU. For the purpose of the revision or update of the resolution plans referred to in the first subparagraph, the institutions and the competent authorities shall promptly communicate to the resolution authorities any change that necessitates such a revision or update.

10 Competent authorities in the relevant Member States shall cooperate with resolution authorities in order to verify whether some or all of the information referred to in paragraph 1 is already available. Where such information is available, competent authorities shall provide that information to the resolution authorities. Development and assessment Art. 10 par. 1 Art. 10 par. 6 Art. 11 par. 2 10 Group resolution plan The group-level resolution authority shall, provided that the confidentiality requirements laid down in this Directive are in place, transmit the information provided in accordance with this paragraph to.