A core aspect of the Prudential Regulation Authority’s (PRA) approach is that it will ensure preparedness for either recovery or resolution of a failing firm. This PRA policy statement contains final rules on recovery and resolution planning and is accompanied by two supervisory statements. Together these documents set out the PRA’s recovery and resolution planning framework.
The rules and supervisory statements are relevant to holding companies, mixed financial holding companies, mixed activity financial holding companies, banks, building societies, and PRA-designated investment firms.
The rules and supervisory statements take effect from 19 January 2015, except for the rules to require a contractual clause recognising bail-in powers in liabilities governed by the law of a third country. These rules will be phased in starting with the first phase, which applies to debt instruments, commencing on 19 February 2015. The second phase, which applies to all other relevant liabilities will commence on 1 January 2016, as set out in the final rules.
Policy Statement
- require the industry to be better prepared for future financial stress through credible and robust recovery planning,
- help the Bank of England in its role as the resolution authority by requiring firms to provide information to be used in resolution plans, and
- ensure the feasibility of bailing-in creditors, in the case of cross border firms, by requiring the contractual recognition of bail-in.
Recovery planning – SS18/13
This supervisory statement was updated on 16 January 2015 to include the PRA’s expectations on scenario testing and the wind-down analysis. SS18/13 as published on 19 December 2013 is available in Related Links.
Resolution Planning Supervisory Statement