- New update introduces greater proportionality and flexibility
- Replaces guidance issued in 2021 and aims to enhance resolvability
The SRB publishes today its updated operational guidance on the solvent wind-down (SWD) of trading books.
The solvent wind-down of trading books is an approach that can be used for exiting trading activities in an orderly manner, while avoiding posing risks to financial stability. The absence of a credible SWD plan can jeopardise the credibility and feasibility of the resolution strategy of a bank with material trading books. Due to the size and complexity of some banks’ trading books, SWD planning contributes to banks’ resolvability.
The operational guidance sets out the scope and main expectations for SWD planning and potential execution, with the objectives to:
- adequately prepare, develop and maintain banks’ capabilities for the planning of a SWD in resolution, and
- to ensure execution capabilities of the SWD plan in a reasonable timeframe.
The update builds on the lessons learned from the implementation phase of the operational guidance and exchanges with banks, as well as developments in financial markets.
Catering for the steady state and references to transitional arrangements, including staggered expectations, have been removed in an effort to simplify the guidance and enhance readability.
The update also clearly distinguishes expectations for the description of trading activities, dependencies and complexity (SWD plan) from the purely operational expectations (SWD playbook). This distinction is meant to increase flexibility in the application of the guidance, for example by inviting a bank to only draw up a SWD plan. The objective is to increase the degree of proportionality for a more tailored approach depending on the bank’s risk profile.
This update replaces the guidance document published in December 2021 that was aimed at facilitating the phase-in of SWD-related expectations.
Guidance for banks - July 2025
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