n general, the regulatory requirements result in a high operational effort, as the preparation of the recovery plans and the provision of information to generate the resolution plans extend across the entire credit institution or the entire group of institutions and those responsible are dependent on the supply of a wide variety of organisational and legal units. The key challenge for both issues is the availability and quality of the required data and information, as these often go beyond the key figures available in risk reporting and the reporting system and require a higher level of granularity that is not included in the existing information systems.
For recovery planning, which has been an integral part of crisis management in the financial industry for several years, the focus of further development is currently on ensuring effective applicability in the event of a crisis and final integration into overall bank management. This is also reflected in the latest publications by the authorities. For example, the applicability is supported by the ECB's published expectations regarding the creation of playbooks and the implementation of dry runs. At the same time, the authorities are constantly improving the quality of the recovery plans - mainly by further refining the scenarios and options for action, including the indicators, and progressively integrating the recovery plan indicators into the "normal" bank management processes. Practicality is more important here than a mere "blunt" increase in the level of detail.
For resolution planning, banks must be able to provide granular data on various issues on a regular and ad-hoc basis. The focus here is on the so-called EBA and SRB templates as well as on further information on liabilities (e.g. MREL notification, creditor identification) and initial valuation-relevant information. This capability has been - and will be more frequently in the near future - tested by the authorities as part of dry runs. This requirement of the resolution authorities often requires adjustments to the IT infrastructure and reporting processes of the respective institutions. In addition to pure data availability, the operational and financial continuity in the event of a resolution is also critically scrutinised by the authority in the resolution planning process. As a result of resolution planning, the authorities identify so-called impediments to resolution from their perspective, which must be eliminated within a specified period of time in order to ensure resolvability. As the resolution authorities have not yet finalised the detailed requirements for a resolution plan and therefore the institutions' duty to cooperate - for example, discussions on the topics of "valuation in resolution" and "funding in resolution" are still ongoing - the challenges cannot be fully assessed.
