On February 22, the European Banking Authority ("EBA") published its handbook on valuation for purposes of resolution under the Bank Recovery and Resolution Directive (2014/59/EU) ("BRRD").
The handbook is addressed to EU resolution authorities and is intended to be a support document relating to valuations requested before resolution and after resolution under Articles 36 and 74 of the BRRD respectively. The handbook is non-binding and is subordinate to the text of the BRRD itself and regulatory technical standards ("RTS") relating to valuations under the BRRD set out in Commission Delegated Regulation (EU) 2018/344 and Commission Delegated Regulation (EU) 2018/345.
Although the handbook covers all types of valuations to be performed for the purposes of resolution, it focuses on the valuation informing resolution authorities' decision on the adoption of the resolution tool(s) (referred to by the EBA as "Valuation 2"). It also deals with the valuation process, including the appointment and interaction with the valuer, the conditions for its independence and suggestions about potential contents of the valuation report.
Chapter 10 of the handbook, on management information systems ("MIS"), is currently in development. The EBA intends to complete this chapter at a later date.
The EBA consulted on a draft version of the handbook in November 2018.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
