5.7 Roles and responsibilities of home and host authorities in the assessment of the recovery plan

Within the process for the assessment of the recovery plan in accordance with Article 6(2) of Directive 2014/59/EU or the process for the assessment of the group recovery plan in accordance with Article 8(1) of that Directive, and also considering the requirements of the EBA’s Recommendation on the coverage of entities in the group recovery plan¹⁶ , the consolidating supervisor or the home competent authority should consult with the host competent authority of significant branches in accordance with Articles 6(2) and 8(1) of Directive 2014/59/EU.

¹⁶ EBA/Rec/2017/02

To facilitate this consultation, the consolidating supervisor or the home competent authority should share the group recovery plan or the institution’s plan, respectively, with the host competent authority in accordance with the timeline established in the college of supervisors for the assessment of the recovery plan and a joint decision on the assessment of the group recovery plan. Furthermore, the consolidating supervisor or the home competent authority should seek input from the host competent authority of the significant-plus branch to facilitate the assessment of the group recovery plan or institution’s recovery plan.

The host competent authority should provide its input to the assessment of the group recovery plan or institution’s recovery plan within the timeline established by the college of supervisors. This input could take the form of general comments on the plan. In addition, the host competent authority should provide comments on the parts of the plan related to the significant-plus branch or comments concerning omissions affecting the coverage of the branch taking into account the requirements of the EBA’s Recommendation on the coverage of entities in the group recovery plan¹⁷ . The host competent authority should also inform the consolidating supervisor and the home competent authority of any aspect of recovery planning relevant to the branch.

¹⁷ Ibid

The input from the host competent authority to the consolidating supervisor or the home competent authority should include the following information, taking into consideration whether the branch has been determined to be significant-plus because of its importance for the group or institution, or because it is systemically important in the host Member State:

• (a) an assessment of how the institution or the group has performed the analysis of critical functions and core business lines with reference to a description of the significant-plus branch and mapping of critical functions and core business lines to that branch;
• (b) an opinion on the institution’s or the group’s strategy on and approach to the significant-plus branch and an analysis of legal and operational interconnectedness, as well as of existing arrangements, in particular resulting from the conditions indicated by the host competent authority in the interest of the general good;
• (c) a description of the main activities and services provided by the significant-plus branch;
• (d) an analysis of how and when the significant-plus branch may apply, under the conditions described in the plan, for the use of central bank facilities, as well as of the assets that are expected to qualify as collateral;
• (e) an assessment of the credibility of recovery options, governance/escalation procedures, scenarios and indicators regarding the significant-plus branch, for example if it is considered to be part of divestment or other recovery options assumed by the institution or the group;
• (f) information on material risks that the significant-plus branch may cause for the institution or dependencies that the institution may have on the branch, or on risks or dependencies between the branch and local market participants;
• (g) an overall assessment of the degree to which the group recovery plan or institution’s plan adequately covers the significant-plus branch;
• (h) information on any other issues relevant for the assessment of the completeness, quality and overall credibility of the plan.

The consolidating supervisor and the home competent authority should prepare the overall assessment of the group recovery plan or institution’s recovery plan in accordance with the requirements of Commission Delegated Regulation (EU) 2016/1075, reflecting the input received from the host competent authority in accordance with paragraph 72. The consolidating supervisor or home competent authority should further consult on the overall assessment report with the host competent authority.

The consolidating supervisor and the home and host competent authorities should endeavour to ensure that all discussions, consultations and deliberations concerning the assessment of the (group) recovery plan take full account of the timeline for the assessment of that plan set out within the college context.

When material deficiencies or impediments identified in the plan relate to the significant-plus branch, such deficiencies and impediments should be duly reflected in the (group) recovery plan’s assessment process, including in the pertinent joint decision. Any communication with the (EU parent) institution or the branch on these matters should be duly coordinated between the consolidating supervisor and the home and host competent authorities within the operational framework of the college.