Design of recovery plans

(1) The design of the recovery plan depends on the size, complexity and interconnectedness of the institution or the group, and on the nature, scale and complexity of the business model and the risk associated with it.
(2) In addition to the recovery-planning requirements of Commission Delegated Regulation (EU) 2016/1075 of 23 March 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the content of recovery plans, resolution plans and group resolution plans, the minimum criteria that the competent authority is to assess in relation to recovery plans and group recovery plans, the conditions for group financial support, the requirements for independent valuers, the contractual recognition of write-down and conversion powers, the procedures and contents of notification requirements and of notice of suspension, and the operational functioning of the resolution colleges (OJ L 184, 8.7.2016, p. 1), the recovery plan must in particular contain the following essential components: 1. a summary of the essential content of the recovery plan, including an assessment of the recoverability of the institution or the group; 2. a strategic analysis of the institution or the group, which must contain: a) a description of the corporate structure and the business model, b) the identification of the material business activities and critical functions, and c) a description of the internal and external interconnection structures; 3. a description of which options for action are available to the institution or the group to safeguard or restore financial stability in a crisis situation; 4. an analysis of the effects of each of the options for action described on the institution or the group, and of the effects of the options for action on the continuation of critical functions, and of the effects on other market participants, creditors and shareholders; in this connection the consequences of the options for action for employees and their representative bodies must also be described; 5. an analysis of the feasibility of the options for action described, including possible impediments to implementation, and a description of whether and how those impediments can be overcome; 6. the determination of qualitative and quantitative indicators that enable the timely implementation of options for action to safeguard or restore the financial stability of the institution or the group in such a way that the crisis situation can be overcome under the institution's own steam and without public-sector stabilisation measures; in this connection an escalation and notification process must also be defined that ensures that the level of management is involved in the decisions in a timely and comprehensive manner; the recovery plan must also specify when and how the supervisory authority is informed, within the escalation and notification process, when the indicator thresholds are reached; 7. a description of scenarios of severe stress that could trigger a crisis situation, and their effects on the institution or the group; the stress scenarios should include both system-wide events and events affecting the individual institution or the entire group, reflecting the institution- or group-specific vulnerabilities; 8. an examination of the effectiveness and feasibility of the recovery plan by reference to the stress scenarios; 9. a communication and information plan, setting out internal and external communication having regard to the particularities applicable to specific options for action; 10. a list of the preparatory measures that the institution or the group has taken, or intends to take, to facilitate the implementation of the recovery plan.
(3) The recovery plan may not assume the possibility of access to, or the receipt of, extraordinary public financial support. However, the recovery plan must analyse how and when the institution could apply, in a crisis situation, to use central bank facilities, and must identify asset positions that could be used as collateral.
(4) The recovery plan must, further, satisfy the following requirements: 1. the implementation of the measures provided for in the recovery plan is, having regard to the preparatory measures taken or planned by the institution concerned under subsection (2), point 10, predominantly likely to be suitable to durably safeguard or restore the viability and financial soundness of the institution or the group; 2. the recovery plan and the options for action can, predominantly likely, be implemented quickly and effectively in a crisis situation, such that material adverse effects on the financial system are avoided as far as possible, including in cases where other institutions implement recovery plans during the same period. The recovery plan must demonstrate, in a comprehensible manner, that the requirements referred to in the first sentence, points 1 and 2, are satisfied.
(5) Each manager is responsible, irrespective of the internal allocation of responsibilities, for the preparation, implementation and updating of the recovery plan, and for its implementation in a crisis situation.
(6) The supervisory authority may, in agreement with the resolution authority, require institutions or the superordinate undertaking of a group to keep detailed records in a central database of financial contracts to which the institution concerned is a party.