Course Schedule

Week 1: Foundations, Governance, and Stress Scenario Design

• Introduction to RRP Philosophy: The regulatory landscape post-crisis; the boundary between Recovery (bank-led) and Resolution (regulator-led).
• Core Elements of a Recovery Plan: Identifying Critical Functions (CFs) and Core Business Lines (CBLs); assessing interconnectedness.
• Governance Framework: Internal escalation procedures, roles of the Board, ALCO, and Crisis Management Teams.
• Stress Scenario Design: Creating severe yet plausible systemic, idiosyncratic, and combined stress scenarios tailored to the bank’s specific risk profile.
• Case Study: Building a Credible Recovery Plan. Designing a recovery framework for a mid-sized European bank under severe but plausible stress.

Week 2: Early Warning Indicators and Recovery Measures (Capital & Liquidity)

• The Trigger Framework: Designing a robust matrix of qualitative and quantitative Early Warning Indicators (EWIs) and Recovery Triggers.
• Capital Recovery Options: Deleveraging strategies, asset disposals, capital generation, and restructuring options.
• Liquidity Recovery Options: Activating Contingency Funding Plans (CFP), Central Bank monetization facilities, and collateral management under stress.
• Feasibility and Credibility Assessment: Quantifying the financial impact and execution timelines of recovery options under different market conditions.
• Case Study: When Should the Bank Act? From Early Warning to Recovery Action, assessing recovery triggers and selecting feasible recovery options under stress.

Week 3: Resolution Strategies and MREL Deep Dive

• The Point of No Return: Understanding the “Failing or Likely to Fail” (FOLTF) criteria and the transition to resolution authority control.
• Resolution Tools: Overview of Bail-in, Bridge Bank, Asset Separation, and Sale of Business.
• MREL (Minimum Requirement for Own Funds and Eligible Liabilities):
  • Calculation methodologies and regulatory targets.
  • Eligibility criteria for debt instruments and subordination requirements.
  • Managing the balance sheet impact and the cost of MREL-eligible funding.
• Multiple Point of Entry (MPE) / Single Point of Entry (SPE) strategies for banking groups.
• Case Study: Aligning with Authority the Resolution Strategies.
• Discussion: Justifying the Preferred Resolution Strategy to the Authority.

Week 4: The Resolution Weekend and Operational Continuity in Resolution (OCIR)

• The Resolution Weekend Playbook: A step-by-step, hour-by-hour operational breakdown of actions taken from Friday market close to Monday market open.
• Operational Continuity in Resolution (OCIR): Safeguarding critical shared services, IT infrastructure, financial market infrastructures (FMIs), and key vendor contracts.
• Crisis Communication Strategy: Managing public disclosure, market perception, depositor psychology, and communication with regulators to prevent contagion.
• Case Study: EU-subsidiary bank resolution process and outcome.