Recovery plans ensure that banks are prepared to restore their viability in a timely manner even in periods of severe financial stress. Banks under the direct supervision of the ECB are required to draft and maintain recovery plans and to submit them annually for assessment. Recovery plans are a key element of the European crisis management framework.
The ECB supports banks in their recovery planning and engages in open and transparent dialogue with them.
The benchmarking analysis of the 2019/20 recovery plan cycle looks at key characteristics of the plans and identifies areas for improvement. The benchmarking encompasses plans assessed until July 2020.
The pandemic has put banks’ recovery plans to the test. But to weather a system-wide storm of this kind, banks need to improve crucial parts of their recovery plans, as the ECB found in its most recent benchmarking exercise.
The report, written after three successive cycles of recovery plan assessments, presents the ECB’s lessons learned and some best practices observed in five key areas: recovery options, overall recovery capacity, recovery indicators, playbooks and dry runs. It aims to help significant institutions further improve their plans and make them more operational.
CHECK OUT OUR OTHER PUBLICATIONS
Benchmarking of recovery plans (cycle 2019/20)
17 February 2021
COVID-19 exposes weaknesses in banks’ recovery plans (Supervision newsletter article)
12 February 2020
Benchmarking of recovery plans (cycle 2018/19)
12 February 2020
Benchmarking for better recovery plans (Supervision newsletter article)
Overall recovery capacity: getting it right (Supervision newsletter article)
Recovery planning: the ECB experience (Supervision newsletter article)
Report on recovery plans
15 November 2017
Recovery and resolution: banks need to be prepared (Supervision newsletter article)