The financial crisis of 2007-8 taught us that we need more resilient institutions, with more capital and liquidity resources, to better withstand stress. But we also need to be able to fix weaknesses that materialise as a result of a stress, either by recovery plans or by resolving banks whilst minimising spill over effects and minimising the burden on the taxpayer. To that end, in 2011, the Financial Stability Board published its key attributes for Recovery and Resolution planning, which has been taken forward in the EU by the Bank Recovery and Resolution Directive (2014/59/EU), or BRRD, proposed by the Commission on June 2012 and adopted in April 2014 by the European Parliament.
The preparation of recovery plans by institutions is a key component of the BRRD. Recovery plans are part of the broader process of crisis prevention, and are designed to ensure that the institution has appropriate processes and measures in place should it come under stress. This course will provide you with the tools necessary to become competent in your assessments of Recovery plans as requested by the Bank Recovery and Resolution Directive, including: Governance of the recovery plans, strategic and systemic positioning of the bank, indicators used to monitor whether a bank may need recovery, recovery options, scenario testing.
Lesson 1 is composed of different learning materials to give you access to the core knowledge. You can access this lesson whenever most convenient for you.
In Lesson 2 you will practice your knowledge by doing the assessment of a hypothetical recovery plan working in small teams.