BRRD: EBA consults on draft RTS further specifying criteria for granting simplified obligations for recovery and resolution planning

The European Banking Authority (EBA) has launched a consultation on draft regulatory technical standards (RTS) on the eligibility criteria for granting simplified obligations for recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).

Simplified obligations may be applied by competent and resolution authorities based on their assessment conducted on the basis of the criteria laid down in the BRRD, which include the size of institution, interconnectedness, scope and complexity of its activities, risk profile, legal status, nature of business and shareholding structure. The draft RTS further specify the criteria for granting simplified obligations and have been developed taking into account experience acquired in the application of the EBA guidelines on simplified obligations, which were published in July 2015.

In particular, the draft RTS specify that authorities should follow a two-stage approach by:

• selecting institutions that may potentially benefit from simplified obligations based on a number of quantitative criteria measured on the basis of a set of quantitative indicators; and
• verifying whether the institutions selected as potentially eligible for simplified obligations also meet relevant qualitative criteria.

To cater for exceptional cases, the draft RTS also provide a short and exhaustive list of exclusions applicable to the first stage of the assessment.

Comments on the consultation are due by 8 August 2017.