SRB publishes second report on smaller banks in the Banking Union

• SRB publishes report on resolution planning and crisis management for smaller banks, known as less significant institutions (LSIs) in 2023 and 2024

• Report examines key developments in the sector, details the national resolution authorities’ (NRAs) resolution planning and crisis management activities in 2023-2024, and explains the SRB’s role on LSIs in the Banking Union 

• It focuses on the 2023 resolution planning cycle (RPC), and progress made by LSIs in terms of meeting their MREL requirements and building up their resolvability capabilities

The Single Resolution Board (SRB) has today published a report on resolution planning and crisis management for less significant institutions (LSIs) for the second time. These are banks under the direct responsibility of national resolution authorities (NRAs), while the SRB has an oversight role. 

The report focuses on the 2023 resolution planning cycle, and sets out the progress made by LSIs in terms of the build-up of MREL and resolvability. All LSIs that had to comply with their final MREL targets as of 1 January 2024 met their obligations, while the remaining MREL shortfalls are attributed to entities with extended transitional periods. NRAs continue to phase in and proportionately implement the SRB’s Expectations for Banks, including its resolvability assessment (heatmap) approach. At this stage, LSIs show good progress on the resolvability capabilities prioritised by their respective NRAs in 2022-2023. 

In 2023-2024, NRAs and the SRB continued to work together to strengthen LSI crisis preparedness and management through exchanging best practices and developing procedures. 

The report also looks at the key trends in the sector, including the rise of digital-only banks.

Speaking in Brussels, SRB Chair Dominique Laboureix said, “Thanks to all the national resolution authorities involved, all LSIs concerned have ensured compliance with their binding minimum requirements for own funds and eligible liabilities (MREL) targets as of 1 January 2024. The NRAs and the SRB, together as the Single Resolution Mechanism, will continue to work together to ensure high standards in resolution planning and crisis management”. 

In the 2024 RPC, NRAs will focus on the remaining issues to foster LSIs’ resolvability and their own crisis preparedness. This includes ensuring that the preferred and, where applicable, variant resolution strategies can be credibly and feasibly implemented.

Small and Medium-Sized Banks: Resolution Planning and Crisis Management for Less Significant Institutions in 2023 and 2024

PDF | 1.31 MB | Publishing date: 11/09/2024 | Decision date: 12/09/2024

Small and Medium-Sized Banks: Resolution Planning and Crisis Management for Less Significant Institutions in 2023 and 2024