European Banking Authority Sets 2025 Priorities for Resolution Authorities and Reports on the Progress Achieved in 2023

The European Banking Authority published its 2025 European Resolution Examination Programme report. The report sets three priorities for resolution authorities and banks for 2025 and looks at the progress achieved in 2023, identifying any areas of improvement. In 2023, convergence increased within the EU with regards to resolution planning practices and objectives: (i) on the minimum requirement for own funds and eligible liabilities, only four banks did not meet their target as of 1 January 2024; (ii) on the operationalization of the bail-in tool, most resolution authorities have now published their bail-in mechanics and consider that certain challenges (e.g., the identification of holders of instruments, suspension of trading and requirements for issuing prospectuses for the new instruments) persist and are particularly prominent in relation to third country stakeholders; (iii) while some progress has been observed in the area of liquidity in resolution, resolution authorities plan to further increase the intensity of their testing and to challenge the severity of banks' scenarios; and (iv) resolution authorities have performed further testing of management information systems for valuation as some banks showed significant gaps in data quality, automation, granularity and timeliness of report delivery. The 2025 EREP priorities confirm and complement the areas of focus set for 2024, given their ongoing relevance and the fact that work takes time on those complex topics. The key 2025 EREP topics are therefore the operationalization of resolution strategies, the management information system for valuation and the operationalization of liquidity strategies in resolution. New elements introduced for 2025 reflect policy and market developments, progress and expertise gained by resolution authorities and embed a testing dimension which is considered central for resolution readiness. Building up own funds and eligible liabilities is not a separate priority anymore, given that most banks have met their MREL targets. However, to increase the effectiveness of the bail-in tool, MREL qualitative aspects are to be further monitored as part of the operationalization of resolution tools, and quantitative aspects will be followed and disclosed by the EBA in its MREL Dashboard.

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