Bank Recovery and Resolution

Introduction:

Recovery and resolution are one of several key international work streams aimed at addressing the risks posed by global systemically important financial institutions. Through this course we aim to cover the key issues, tools, and techniques used to create and manage a RRP and the real-life challenges faced by financial institutions in the RRP process. Following the credit crisis and subsequent rescue of failing financial institutions by governments, Recovery and Resolution Planning (RRP) rules are being implemented globally, which require banks, building societies, and investment firms to produce a Recovery plan and Resolution pack.

Targeted Groups:

• Board Members
• Chief Financial Officers (CFOs)
• Risk Managers
• Personnel and executives working for the inteal audit or compliance department
• Financial analysts
• Credit analysts
• Liquidity specialists

Learning Objectives:

• Explain the building blocks of crisis preparedness and management.
• Identify weak banks and devise strategies for dealing with them.
• Pinpoint key design features of effective resolution regimes and options for enhancing
• Operational preparedness.
• Identify stabilization options in response to financial panic and design credible
• Strategies for bank restructuring and resolution at an individual and system-wide level.
• Compare options for dealing with distressed assets.
• Explain the building blocks of crisis preparedness and management.
• Identify weak banks and devise strategies for dealing with them.
• Pinpoint key design features of effective resolution regimes and options for enhancing operational preparedness.
• Identify stabilization options in response to financial panic and design credible
• Strategies for bank restructuring and resolution at an individual and system-wide level.
• Compare options for dealing with distressed assets.

Course Content:

Unit 1: Introduction – Bank Resolution within the SRM

• Background and fundamentals
• The logistics and economics of (systemic) bank insolvency
• Policy developments since the global financial crisis

Unit 2: The BRRD and the SRMR

• Institutional Framework
• Recovery and Resolution Planning
• Resolution Action and Funding
• The interplay between European and national levels and the role of national insolvency legislation for less significant institutions

Unit 3: Structure, Key Principles and Resolution Tools

• Overview and Objectives
• Resolution and the “Resolution Tools”
• Resolution Funding
• Cross-border coordination of resolution actions

Unit 4: Recovery planning: a Banking industry perspective

• The Role of Planning Ahead
• Iterative interactions with stakeholders and regulators
• Ongoing governance in recovery planning

Unit 5: Improving the usability of recovery plans

• Overall recovery capacity
• Playbooks and dry-runs
• Interlinkages between recovery and resolution plans

Unit 6: Resolution Planning: A Practitioner Perspective

• Resolution planning and resolution plans
• General conditions for effective resolution planning
• Content of resolution plans & related processes
• Interaction & interdependencies between supervision and resolution
• Cross-border cooperation and why it should work

Unit 7: Selected aspects of resolution planning: insight, results & challenges

• Resolvability Assessment and removal of (potential) impediments
• Operational & financial continuity
• Separability analysis & business reorganization planning
• Communication Concept
• Resolution readiness through dry-runs & best practices

Unit 8: Final resolution case and with all the elements together

• Sequence of events in a resolution case
• Who is doing what and when: from “Business as Usual” to “Orderly Wind down”