The European Banking Authority has launched a consultation on proposed recommendations on the coverage of legal entities in a group recovery plan. The Bank Recovery and Resolution Directive requires a Union parent undertaking to prepare a recovery plan that covers the parent as a whole and identifies measures that are needed at the level of the parent and each individual subsidiary. The EBA has identified that several group recovery plans are predominantly drafted from the parent undertaking's perspective and have little information relating to the other entities in the group. Such plans, in its view, do not comply with applicable legal requirements and are of limited credibility and effectiveness. In addition, the EBA has found that because some national regulators have historically asked for plans from entities established in their jurisdiction, there are information asymmetries between the overall group plan and the plan for a given subsidiary. These asymmetries are impeding the making of joint decisions for group recovery plans by home and host regulators. The EBA is therefore consulting on proposed recommendations which specify how legal entities and branches should be covered in a group recovery plan, including a transitional regime so that recovery planning information available at local level can be migrated to the group level by 2019. Responses to the consultation are due by June 2, 2017. The EBA is proposing that the recommendations would apply from July 1, 2017.

View the consultation paper.