Single Resolution Board launches consultation on expectations for banks’ valuation capabilities in resolution

The Single Resolution Board (SRB) has opened a public consultation on its Expectations on Valuation Capabilities, setting out how banks should prepare to provide the data and supporting materials needed to value a bank for resolution purposes. The SRB frames valuations as central to resolution decision-making in crisis cases and to achieving an orderly resolution with minimal impact on the economy. The document sets expectations for banks implementing Principle 5.2 of the SRB’s Expectations for Banks and references Chapter 10 of the European Banking Authority handbook on valuation for purposes of resolution. It introduces a Valuation Data Index built on existing bank-level documents and not requiring information beyond what is already publicly available or accessible to the SRB, minimum functionalities for Data Repositories for Resolution and predefined frequencies for populating them with Valuation Data Index information, and valuation playbooks to help an independent valuer understand banks’ internal valuation models and how they are used in business processes. In a crisis, and subject to the applicable legal framework, the SRB notes it may deviate from the actions and expectations described. The consultation will run for three months.