Single Resolution Board publishes its Annual Work Programme 2025

RegCORE Client Alert | Banking Union

QuickTake

Every year, usually during the fourth quarter, the Banking Union relevant authorities, comprised of the European Central Bank (ECB), acting at the helm of the Single Supervisory Mechanism (SSM) and the Single Resolution Board (SRB), acting at the helm of the Single Resolution Mechanism (SRM), individually publish their Annual Work Programmes (AWPs) setting out their priorities and resourcing for the coming calendar year. The SRB’s AWP aims to foster cross-sectoral regulatory consistency and supervisory convergence and is thus of relevance to national competent authorities (NCAs) and national resolution authorities (NRAs) and more importantly the relevant firms within the scope of SRB’s and NRAs’ regulatory and supervisory mandate. 

On 28 November 2024, the SRB published its AWP for 2025 setting out its joint focus on key strategic priorities and implementation of new mandates.Available here.Show Footnote The SRB on the same day equally published a list of upcoming consultations and requests to the industry during 2025, its 10^th year of full operationalisation.Available here.Show Footnote Both of these documents highlight a particular emphasis on ongoing collaboration to tackle cross-sectoral plus new emerging risks as well as promoting resilience and resolvability across the EU financial system firms within the scope of the SRB’s mandate. Both documents should also be read in conjunction with the SRB’s Multi-Annual Plan 2024-2028 (the MAP)Available here.Show Footnote, which sets out the SRB’s longer term plan to meet its “SRM Vision 2028” strategy.See our analysis available here.Show Footnote

The SRB’s 2025 AWP has outlined a comprehensive set of requirements and expectations for financial institutions within the Banking Union to ensure effective crisis preparedness, resolution planning and operational resolution readiness (including a greater focus on the impact of digital/cyber-threats as well as information and communication technology (ICT) failings). The SRB has identified the following common priorities for all banks under its supervision:

• Separability and transferability: Focus on operationalising the sale of business through enhancements to the Transfer Playbook, preparing for future testing of transfer strategies.
• Access to financial market infrastructure (FMI) services: Conduct walkthroughs on FMI contingency plans with a sample of service providers to identify and address potential shortcomings. Additionally, banks must test their ability to deliver an up-to-date list of critical and essential FMI service providers within 24 hours.
• Liquidity and funding in resolution: Participate in a dry run to test capabilities in reporting an updated Joint Liquidity Template (JLT) as part of a horizontal liquidity exercise.

In addition to these common priorities, each bank is expected to address specific priorities provided by its Internal Resolution Team (IRT)IRTs are responsible for preparing resolution plans for banks under the SRB’s remit. They consist of experts from the SRB as well as relevant NRAs.Show Footnote and tailored to their unique circumstances and operational needs. 

This Client Alert discusses the key requirements and expectations as well as legal and regulatory considerations for relevant market participants as well as the key differences between the SRB’s AWPs for 2024 and 2025. This Client Alert should be read together with other thematic deep dives on reforms and developments as well as our standalone analysis of all relevant 2025 AWPs from the European Commission, the European Systemic Risk Board (ESRB), the European Supervisory Authorities (ESAs), comprised of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA) – both when acting individually as well as through the Joint Committee (JC) of the ESAs. Readers may also find benefit in consulting “Navigating 2025”, a comprehensive playbook providing a more granular annual outlook from PwC Legal’s EU RegCORE on the forthcoming regulatory policymaking agenda, the supervisory cycle and assessment of any commonalities and trends across plans for 2025 and beyond.

Key takeaways from the SRB’s 2025 AWP

As in previous years the SRB’s 2025 AWP has outlined an ambitious and comprehensive work programme for 2025, aimed at enhancing regulatory consistency, supervisory convergence and resolvability across the Banking Union. The SRB remains committed to fostering consistency and supervisory convergence within its mandate. This involves regular coordination of activities within their respective responsibilities to ensure uniformity in practices and expectations. In summary the 62 pages of the 2025 AWP communicate the SRB’s requirements and expectations of banks as well as improvements to the SRB’s functioning across the following nine key areas:

1. Crisis Preparedness and Management

1.1 Centralised Crisis Management Function:

• Financial institutions must be prepared to respond to evolving threats. The SRB will enhance crisis communications through the SRM Communications Forum, which includes experts from the SRB, NRAs, ECB and the European Commission. 
• Financial institutions are expected to participate in the development and implementation of “crisis communication plans”, integrating digital communication tools and platforms and adjusting them regularly to reflect the latest threats and risks. This includes adapting to changes in the external environment, such as geopolitical developments, economic shifts, and technological advancements.
• Financial institutions are required to participate in regular training sessions, dry runs and simulations organised by the SRB and implement lessons learned from such efforts as well as from actual crisis events. These exercises help identify gaps in crisis communication plans and provide opportunities for updates and improvements.
• The SRB produces bi-annual monitoring reports to assess the overall state of crisis readiness and communication. Financial institutions must contribute to these reports by providing updated information on their crisis communication plans and any changes made.

1.2 Risk Policy Framework:

• Financial institutions must actively monitor risks under the SRB’s overarching risk policy framework. This includes a horizon-scanning process to identify and assess emerging threats and implement mitigation measures as needed. See further details about Rule Scanner in the About Us section below, as a possible solution to meet this expectation.

1.3 Operationalisation of Resolution Strategies and Tools:

• Financial institutions are required to develop and update resolution tools, such as the bail-in calculator, public interest assessment (PIA) tool, and moratorium tool. These tools must be tested and integrated into the banks’ operational frameworks.
• As set out in the MAP, the SRB and the NRAs are expected to action the development of National Handbooks, the integration of lessons learned from previous crises, and the enhancement of valuation capabilities. The SRB will also focus on developing operational aspects regarding the use of the Single Resolution Fund (SRF) and coordinating procedures with national jurisdictions to ensure a seamless response during resolution actions.

2. Resolution Planning and Resolvability

2.1 Annual Resolution Planning Cycle (RPC):

• The SRB has shifted focus from drafting and updating resolution plans to operationalising and testing them. The SRB will manage multiple RPCs, ensuring the adoption of resolution plans and engaging with NRAs and banks to enhance preparedness. Some financial institutions may need to adopt a more modular approach to resolution planning, making plans more actionable in case of a crisis.
• The 2025 RPC will follow a new and simplified approach to make plans more user-friendly and enable the shift towards a more comprehensive testing framework. This framework will include various layers of testing, such as resolution authority-led testing, bank testing, and larger dry runs and simulations. The SRB will also develop training packages for crisis readiness, which will be accessible to both SRM and external stakeholders. These initiatives aim to ensure that all resolution teams are adequately prepared for crises and can implement resolution strategies effectively. 
• Communication and document exchange with financial institutions will be streamlined using the Integrated Resolution Information System (IRIS).

2.2 Resolvability Self-Assessment:

• Financial institutions are required to conduct self-assessments of their resolvability using new SRB guidance. These self-assessments will be the starting point for the SRB’s resolvability assessments. 
• Institutions must participate in bank-led testing exercises and deep dives to provide additional information on their level of resolvability and crisis readiness.

2.3 On-Site Inspections (OSIs):

• The SRB will conduct OSIs based on a methodological framework. Financial institutions must be prepared for these inspections and implement any recommendations from the SRB.[6]

2.4 Addressing Substantive Impediments:

• Financial institutions must remove any substantive impediments to their resolvability. The SRB will provide internal guidance and training on policy considerations and procedural steps for addressing these impediments.

3. Minimum Requirements for Own Funds and Eligible Liabilities (MREL)

3.1 MREL Monitoring:

• Financial institutions must adhere to their individual MREL targets. The SRB will monitor compliance and may impose restrictions or trigger substantive impediments procedures if targets are not met.

3.2 Eligibility Checks:

• The SRB will phase in eligibility checks in a new standardised format to ensure that banks’ eligible liabilities meet the required standards.

4. Operational Continuity in Resolution (OCIR)

4.1 Policy and Best Practices:

• Banks must comply with the SRB’s policies on operational continuity, including those related to the Digital Operational Resilience Act (DORA). This includes ensuring that ICT disruptions are addressed in resolvability and testing frameworks.

4.2 Reporting Templates:

• Institutions must update their reporting templates to avoid unnecessary duplication and reduce ad hoc requests for OCIR data points.

5. Liquidity and Funding in Resolution

5.1 SRF Operational Procedures:

• Banks must develop and test procedures for using the SRF during resolution actions. This includes identifying and mobilising collateral and ensuring the feasibility of proposed liquidity strategies.

5.2 Analytical Tools:

• The SRB will enhance its analytical tools to assess banks’ liquidity needs in resolution, and banks must be prepared to provide the necessary data for these assessments.

6. Public Interest Assessment (PIA)

6.1 Consistent Assessment:

• Banks must support the SRB in conducting a horizontally consistent assessment of public interest during both the resolution planning and crisis phases. This includes providing quantitative support for PIA decisions.

6.2 Legislative Changes:

• Institutions must be prepared for potential changes to the PIA policy based on ongoing legislative negotiations and updates to the Implementing Technical Standards on resolution reporting.

7. Regular Assessment and Reporting

7.1 Financial Stability and Economic Analysis Dashboards:

• Banks must contribute to the SRB’s efforts to develop and maintain dashboards for assessing financial sector risks. This includes providing regular updates and data to support these assessments.

8. Governance and Internal Organisation

8.1 Streamlined Decision-Making:

• In 2025, the SRB will focus on streamlining its governance and organisational structure to increase transparency and efficiency. This includes a comprehensive review of decision-making processes, enhancing NRA participation in technical and preparatory bodies, and developing a more integrated approach to events and discussions.
• The SRB will also update its organisational structure to align with the new strategic vision, ensuring that it can respond effectively to national specificities and leverage NRA expertise. This includes revising the Rules of Procedure of the Executive and Plenary Session and developing flashcards on decision-making processes. In certain instances some banks must align their internal processes with the SRB’s streamlined decision-making procedures to increase transparency and efficiency of resolvability. 

8.2 Digital Transformation:

• Financial institutions are expected to participate in the SRB’s digital transformation initiatives, including the development of a digital transformation strategy and the use of best-practice technologies. The SRB has created the Digital Transformation Group (DTG) to develop and implement a digital transformation strategy. This group will leverage the knowledge and experience of its participants from the SRB and NRAs and collaborate with other stakeholders such as the ECB and the European Commission. Furthermore, the DTG will identify and initiate proofs of concept to explore and validate new digital solutions. These initiatives will be supported by the newly established Innovation Laboratory (iLab), which aims to promote the development of digitalisation and automation projects.
• The SRB will further develop and enrich its Data Management Framework to facilitate implementation and operability. This includes supporting the SRB Data Catalogue and working on master data policies and processes. A centralised data quality policy will be drafted and implemented, along with tools and mechanisms for applying the data quality framework. This aims to ensure high standards of data integrity and usability. The SRB will enhance its data ICT architecture to improve the collection, processing, and sharing of data. This includes assessing additional opportunities to grant NRAs further access to SRB ICT solutions, fostering a collaborative digital working environment. 
• The SRB will carefully adopt AI technologies to transform its operational landscape. This involves using AI on-site for sensitive operations and leveraging Cloud Service Providers’ solutions for less critical processes, guided by specific use cases and risk appetite. 
• The SRB will work closely with NRAs to exchange knowledge and best practices, ensuring a coordinated approach to digital transformation across the Banking Union.

9. Human Resources

9.1 Talent Management:

• Banks must support the SRB’s efforts to develop a motivated and professional pool of talent. This includes participating in internal and external mobility programmes and career development initiatives.
• The SRB will provide training initiatives dedicated to core business topics and collaborate with NRAs. A skills gap analysis will identify learning needs, and a common SRM Training Curriculum will be established.

9.2 Diversity and Inclusion:

• A working group on Diversity and Inclusion will focus on various dimensions of diversity, based on staff surveys and other tools. Communication actions and training will be launched to increase awareness and transparency.
• Institutions must implement measures to promote diversity and inclusion within their organisations, in line with the SRB’s gender action plan and other diversity initiatives.

In summary, while the SRB’s 2025 AWP is comprehensive and forward-looking there have been some changes between the focus, scrutiny and tone of what the SRB focused on in 2024 AWP compared to what it plans to do in furtherance of its 2025 AWP’s objectives and the longer-term goals set out in the MAP and the SRM Vision 2028. 

Key messages and differences between the SRB’s 2024 AWP and 2025 AWP

In addition to the above, it is important to review how the focus, tone and expected level of scrutiny differs, even if ever so slightly, between the SRB’s 2024 and 2025 AWPs: