Business reorganisation following bail-in: an analysis of the preparedness level of the major French banking groups

This document, which is one of the components of the bank’s resolvability analysis, aims at proposing reorganisation measures that the bank deems suitable to restore its long-term viability while addressing the causes of its failure.

Given the narrow time frame allocated to the production of this document, the Single Resolution Board (SRB), the European authority in charge of resolution planning for those institutions of the Banking Union that are significant institutions (the balance sheet of which exceeds EUR 30 billion), has set expectations on the matter. Accordingly, institutions for which the use of open-bank bail-in is envisaged are required to demonstrate their ability to produce such a document and must, ahead of any crisis episode, consider the reorganisation strategy that the application of bail-in may require. Since 2022, institutions have been drawing up “BRP analysis reports” setting out the governance structure that will enable them to meet their obligations as they fall due in a crisis, along with an initial strategic analysis of business reorganisation such as it may be anticipated, based on the resolution scenarios defined by each bank.

Gradually gaining in maturity after the second iteration of this exercise, the ACPR conducted a horizontal review of the BRP analysis reports issued by the six major French banking groups, drawing on the work conducted by the Internal Resolution Teams (IRTs), which brought together teams from the SRB and the relevant national resolution authorities, in order to assess progress and identify best practices that could benefit to all banks for which the drafting of a BRP analysis report is expected.

This review revealed a fairly good command of governance processes and the determination of the bank’s post-resolution outline, whilst also identifying potential opportunities for improvement as regards the identification of reorganisation measures, the definition of resolution scenarios and the establishment of financial projections.