+Guidelines on recovery plans indicators (EBA/GL/2021/11)
---+1. Compliance and reporting obligations
------+Status of these guidelines
---------+1. This document contains guidelines issued pursuant to Article 16 of Regulation (EU) No 1093/2010 …
---------+2. Guidelines set the EBA view of appropriate supervisory practices within the European System of …
------+Reporting requirements
---------+3. According to Article 16(3) of Regulation (EU) No 1093/2010, competent authorities must notify …
---------+4. Notifications will be published on the EBA website, in line with Article 16(3).
---+2. Subject matter, scope and definitions
------+Subject matter
---------+5. These guidelines specify, in accordance with Article 9(2) of Directive 2014/59/EU , the minimum …
------+Scope of application
---------+6. These guidelines apply to institutions as defined in point 23 of Article 2(1) of Directive …
---------+7. For institutions that are not part of a group subject to consolidated supervision pursuant to …
---------+8. For institutions that are part of a group subject to consolidated supervision pursuant to …
---------+9. Competent authorities may specify how to apply all or part of these guidelines to institutions …
---------+10. Competent authorities may waive the application of certain indicators or conditions set out in …
------+Addressees
---------+11. These guidelines are addressed to competent authorities as defined in points (2)(i) and …
------+Definitions
---------+12. Unless otherwise specified, terms used and defined in Directive 2014/59/EU, Directive …
---------+13. For the purpose of these guidelines, the following definitions apply: means the competent …
---+3. Implementation
------+Date of application
---------+14. These guidelines apply from 14.02.2022.
------+Repeal
---------+15. Guidelines on the minimum list of qualitative and quantitative recovery plan indicators …
---+4. Setting the framework of recovery plan indicators
------+16. The framework of recovery plan indicators should be established by institutions and assessed by …
------+17. The recovery plan should contain detailed information on the decision-making process with …
------+18. In defining this framework, institutions should consider that indicator breaches do not …
------+19. Institutions should include recovery plan indicators of both a quantitative and qualitative …
------+20. While setting the quantitative recovery plan indicator thresholds, consistently with its …
------+Categories of recovery plan indicators
---------+21. Institutions should include in the recovery plan at least the following mandatory categories of …
---------+22. Institutions should include in the recovery plan the two following categories of recovery plan …
---------+23. Institutions should include specific recovery plan indicators included in the list per category …
---------+24. When an institution is rebutting the presumption as set out in paragraph 23 for any of the …
---------+25. Institutions should not limit their set of indicators to the minimum list set out in Annex II …
---------+26. The framework of recovery plan indicators should: a. be adapted to the business model and …
------+Requirements for the calibration of recovery plan indicators
---------+27. For the calibration of the indicator framework the institution should take into account the …
---------+28. An institution should be able to provide the competent authority with an explanation of how the …
---------+29. The appropriateness of the calibrations of the recovery plan indicators should be regularly …
---------+30. Competent and resolution authorities could decide to implement temporary relief measures in the …
---------+31. Competent authorities may agree to the update of the calibration of the recovery plan …
------+Actions and notifications upon breaching an indicator
---------+32. For indicator breaches to effectively fulfil their warning potential, in line with internal …
---------+33. Where a recovery plan indicator has been breached, the management body of the institution …
---------+34. The decision taken by the institution referred to in the previous paragraph should be based on …
---------+35. Any action or option taken or considered by the institution following an indicator breach, even …
---------+36. The final decision on the potential activation of the recovery plan remains with the …
---------+37. For the purposes of the previous paragraph, the competent authority should monitor (i) the …
------+Arrangements for monitoring recovery plan indicators
---------+38. The monitoring of recovery plan indicators by the institution should be set at an adequate …
---------+39. When requested by the competent authority, the institution should be able to provide it with …
---+5. Recovery plan indicators
------+Capital indicators
---------+40. Capital indicators should identify any significant actual and likely future deterioration in …
---------+41. When selecting capital indicators the institution should consider ways to address the issues …
---------+42. The capital indicators should also be integrated into the institution’s Internal Capital …
---------+43. The thresholds for indicators based on regulatory capital requirements should be calibrated by …
---------+44. In line with the objective of the recovery process and the flexibility given to the institution …
---------+45. Generally, capital indicators should be calibrated above the combined capital buffer …
---------+46. The thresholds for indicators related to the requirements set out in Articles 45c and 45d of …
---------+47. The indicator threshold should take into account the maturity profile of eligible liabilities …
---------+48. The threshold calibration for MREL should be agreed by the competent authority in consultation …
------+Liquidity indicators
---------+49. Liquidity indicators should be able to inform an institution of the potential for or an actual …
---------+50. The institution's liquidity indicators should refer to both the short-term and long-term …
---------+51. The liquidity indicators should be integrated with the strategies, policies, processes and …
---------+52. The liquidity indicators should also cover other potential liquidity and funding needs, such as …
---------+53. The thresholds for liquidity indicators should be calibrated by the institution at adequate …
---------+54. The thresholds for indicators based on regulatory liquidity requirements (LCR and NSFR …
---------+55. To calibrate the thresholds of the liquidity position, the institution should consider …
------+Profitability indicators
---------+56. Profitability indicators should capture any institution’s income -related aspect that could …
---------+57. This category should include recovery plan indicators referring to operational risk-related …
------+Asset quality indicators
---------+58. Asset quality indicators should measure and monitor the asset quality evolution of the …
---------+59. The asset quality indicators may include both a stock and a flow ratio of non-performing …
---------+60. The asset quality indicators should cover aspects such as off-balance-sheet exposures and the …
------+Market-based indicators
---------+61. Market-based indicators aim to capture the expectations from market participants of a rapidly …
------+Macroeconomic indicators
---------+62. Macroeconomic indicators aim to capture signals of deterioration in the economic conditions in …
---------+63. The macroeconomic indicators should be based on metrics that influence the performance of the …
---------+64. The macroeconomic indicators should include the following typologies: a. geographical …
---+Annex I – Categories of recovery plan indicators
---+Annex II – Minimum list of recovery plan indicators
---+Annex III – Illustrative list of additional recovery plan indicators

English - European Union - Financial Industry -

Guidelines on recovery plans indicators (EBA/GL/2021/11)

Guidelines on recovery plans indicators (EBA/GL/2021/11)

https://www.eba.europa.eu/activities/single-rulebook/regulatory-activities/recovery/guidelines-recovery-plans-indicators – PDF

1. Forbhreathnú

,

Teideal	Rialáil
1. Compliance and reporting obligations	1. Compliance and reporting obligations
2. Subject matter, scope and definitions	2. Subject matter, scope and definitions
3. Implementation	3. Implementation
4. Setting the framework of recovery plan indicators	4. Setting the framework of recovery plan indicators
5. Recovery plan indicators	5. Recovery plan indicators
Annex I – Categories of recovery plan indicators	Categories of recovery plan indicators (the first four categories are mandatory, while the last two categories may be excluded if an institution justifies that they are not relevant for it) Mandatory categories 1. Capital indicators 2. Liquidity indicators 3. Profitability indicators 4. Asset quality indicators Categories subject to rebuttable presumption 5. Market-based indicators 6. Macroeconomic indicators
Annex II – Minimum list of recovery plan indicators	Minimum list of recovery plan indicators (each indicator is subject to the possibility for an institution to justify that it is not relevant for it, but in such a case it should be replaced by another indicator which is more relevant to this institution) 1. Capital indicators a) Common Equity Tier 1 ratio b) Total Capital ratio c) Leverage ratio d) MREL and TLAC (where relevant) 2. Liquidity indicators a) Liquidity Coverage Ratio b) Net Stable Funding Ratio c) Available central-bank eligible unencumbered assets d) Liquidity position 3. Profitability indicators a) (Return on assets) or (return on equity) b) Significant operational losses 4. Asset quality indicators a) Growth rate of gross non-performing loans b) Coverage ratio [provisions / (total non-performing loans)] 5. Market-based indicators a) Rating under negative review or rating downgrade b) CDS spread c) Stock price variation 6. Macroeconomic indicators a) GDP variations b) CDS of sovereigns
Annex III – Illustrative list of additional recovery plan indicators	Additional recovery plan indicators (non-exhaustive list provided for illustration purposes only) 1. Capital indicators a) (Retained earnings and reserves) / total equity b) Adverse information on the financial position of significant counterparties 2. Liquidity indicators a) Concentration of liquidity and funding sources b) Cost of total funding (retail and wholesale funding) c) Average tenure of wholesale funding d) Contractual maturity mismatch e) Cost of wholesale funding 3. Profitability indicators a) Cost-income ratio (operating costs / operating income) b) Net interest margin 4. Asset quality indicators a) Net non-performing loans / equity b) (Gross non-performing loans) / total loans c) Growth rate of impairments on financial assets d) Non-performing loans by significant geographic or sector concentration e) Forborne exposures⁵ / total exposures 5. Market-based indicators a) Price to book ratio b) Reputational threat to the institution or significant reputational damage 6. Macroeconomic indicators a) Rating under negative review or rating downgrade of sovereigns b) Unemployment rate 5 ‘Forborne exposures’ as defined in Articles 163– 183 of Commission Implementing Regulation (EU) No 680/2014 of 16 April 2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council. 24

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