Chrome Consultants

Recovery and Resolution Planning (RRP)

This intensive course covers the key issues, tools, and techniques used to create and manage a Recovery and Resolution Plan (RRP) and the real-life challenges faced by financial institutions in the RRP process. Following the credit crisis and subsequent rescue of failing financial institutions by governments, Recovery and Resolution Planning (RRP) rules are being implemented globally, requiring banks, building societies, and investment firms to produce a Recovery plan and Resolution pack. By the end of the program, delegates will have broadened their knowledge and expertise in: - Understanding the need for RRPs and the implications for the financial services industry - Analyzing the key components of a recovery and resolution plan for financial institutions - Applying the latest key regulatory requirements to a bank’s recovery and resolution plan - Strategizing and devising solutions to the practical challenges faced in preparing RRPs

Venues

Dates

Cost: $3,900 per participant (USD) (=N=)

For Whom

Snapshot of Course Content

Introduction to RRP

  • Financial crisis and impact on banking sector
  • Regulatory change post crisis
  • Financial Stability Board’s requirements for RRPs
  • Scope and applicability
  • Bank Recovery and Resolution Directive (BRRD)
  • Implementation of BRRD in the UK
  • Exercise: Banking sector support and changes post-BRRD

Approach to Creating Recovery and Resolution Plans

  • Key objectives of an RRP
  • Definition of group structure, legal entities, business lines, and supporting infrastructure
  • Critical business activities
  • Governance and oversight of the RRP
  • Validation of RRP
  • Board engagement
  • Review and challenge

Building and Verifying a Recovery Plan

  • Information requirements for recovery planning
  • Key elements and contents of a recovery plan
  • Strategic analysis and integration with risk management processes
  • Communication and disclosure plan
  • Stress testing and triggers: scenario definition, early warning indicators, recovery triggers
  • Exercise: UK Banks 2007 early warning indicators
  • Recovery options: disposal, wind down analysis, central bank facilities, evaluation and remediation
  • Case Study: Recovery scenarios and options at a large UK bank

Building a Resolution Plan

  • Information requirements for resolution planning
  • Key elements and contents of a resolution plan
  • Group structure, business model, capital and funding, activities and operations
  • Resolution strategies: bail-in liabilities, documentation, business reorganization, valuation
  • Case Study: The resolution of a failed UK bank

Regulatory Interactions and Toolkit

  • UK – Europe and US frameworks
  • Evaluation criteria and cross-border jurisdiction coordination
  • International resolution: Home vs. Host considerations
  • Case Study: Cross-border resolution challenges at a large international bank
  • RRP implementation toolkit: resources, data, management, timelines, practical considerations

Practical Challenges Faced by Financial Institutions

  • Consequences of inadequate RRPs
  • Approach in UK/Europe vs. the US
  • Expectations of regulators vs. banking industry needs
  • Structural reform, progress so far, and next steps
  • Case Study: Overcoming barriers to resolution at a large US bank