Preparation for resolution of medium-sized and small banks in the euro area
Results of a parallel audit of supreme audit institions on banking resolution
Seven supreme audit institutions in the euro area have audited the plans for the resolution of medium-sized and small banks that run into financial trouble. They were unable, however, to inspect all the documents they needed to examine. The seven audit institutions concerned are from Austria, Estonia, Finland, Germany, the Netherlands, Portugal and Spain. The Contact Committee of Presidents of supreme EU audit institutions and the European Court of Auditors published their joint report on 16 December.
What are the main findings?
Because of the obstacles encountered by the seven EU audit institutions, they were unable to properly discharge their statutory duty, i.e. to perform independent audits at the national authorities responsible for bank resolution (the central bank in the case of the Netherlands).
The seven supreme audit institutions also found that resolution planning for medium-sized and small banks had not yet been fully completed. Although the national resolution authorities had made progress, there were nevertheless discrepancies between them that could result in banks being treated in different ways in the event of a crisis.
What are the main recommendations?
The seven EU audit institutions urge the EU’s Single Resolution Board and the national authorities to compile common EU-wide guidelines for planning the resolution of medium-sized and small banks.
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