Major cross-border banking groups within the EU are systemically important to the soundness of the financial system within the European Union and even beyond. In this respect, the European Banking Authority has issued a formal Recommendation which advocates the adoption of group recovery plans, which should ideally be in place by the end of the current year. Such a plan must not only be in place, but it must also be submitted to the competent national regulators so that these will be able to vet the same and make any comments which are necessary.
In order to assist group institutions (around 40 within the European Union) with formulating such plans, the Financial Stability Board will be issuing a number of standards, while the EBA will be issuing a number of templates. In general, a plan is required to be general but at the same time comprehensive in offering solutions in the cases of crises.
The intention is that the Recommendation which has been issued recently, precedes the enactment of a more comprehensive legislative framework for the recovery and resolution of credit institutions.
