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Cooperation with foreign authorities

Given that banks generally operate across national borders, it is essential that European and international authorities cooperate with each other to ensure the resolution process goes smoothly.

Authorities in European Union countries

Resolution colleges

Group-level resolution authorities are required to establish resolution colleges to carry out the following tasks:

  • prepare and approve a group resolution plan;
  • assess the resolvability of the group and reduce or remove any obstacles to its resolvability;
  • apply a minimum requirement for own funds and eligible liabilities (MREL);
  • decide whether a group resolution scheme is required and, where necessary, implement group resolution actions;
  • cooperate and coordinate with resolution authorities in third countries.

The following shall be members of the resolution college:

  • the group-level resolution authority;
  • the resolution authorities of each Member State in which a subsidiary covered by consolidated supervision is established;
  • the resolution authorities of Member States where a parent undertaking of one or more institutions of the group are established;
  • the resolution authorities of Member States in which significant branches are located;
  • the consolidating supervisor and the competent authorities of the Member States where the resolution authority is a member of the resolution college;
  • the competent ministries, where the resolution authorities which are members of the resolution college are not the competent ministries;
  • the authority responsible for the deposit guarantee scheme of a Member State, where the resolution authority of that Member State is a member of the resolution college;
  • the European Banking Authority (EBA), which has no voting rights.

The resolution authorities of third countries where a parent undertaking or an institution established in the Union has a subsidiary institution or a branch that would be considered to be significant were it located in the Union, may be invited to participate in the resolution college as observers.

European resolution colleges

Where a third-country institution or third-country parent undertaking has Union subsidiaries established in two or more Member States, or two or more Union branches that are regarded as significant by two or more Member States, the resolution authorities of the Member States where those Union subsidiaries are established or where those significant branches are located shall establish a European resolution college.

European resolution colleges shall perform the same tasks as a resolution college, and function in exactly the same way.

Cooperation with authorities in third countries

Under the Key Attributes adopted by the Financial Stability Board (FSB) in October 2011, crisis management groups (CMGs) should be maintained for all global systemically important financial institutions (G-SIFIs). The objective of CMGs is to enhance preparedness for and facilitate the management and resolution of a cross-border financial crisis affecting a G-SIFI.

CMGs comprise the authorities of jurisdictions that are home or host to entities of the group that are material to its resolution. They therefore include, for these jurisdictions:

  • supervisory authorities;
  • central banks;
  • resolution authorities;
  • finance ministries;
  • public authorities responsible for guarantee schemes.

CMGs are required to keep under active review:

  • progress in coordination and information sharing within the CMG, and with host authorities that are not represented in the CMG;
  • the recovery and resolution planning process;
  • the resolvability of G-SIFIs.

To facilitate cooperation, members of CMGs are required to sign cooperation agreements. These agreements should, inter alia:

  • establish the objectives and processes for cooperation through the CMG;
  • define the roles and responsibilities of the authorities pre-crisis and during a crisis;
  • set out the processes for information sharing, with clear reference to any arrangements that protect the confidentiality of the shared information;
  • set out the process for the development of recovery plans and for the conduct of resolvability assessments

Updated on: 03/19/2019 15:40