Bank Recovery and Resolution Directive Compliance

PROJECT DETAILImplementation of the EU Bank Recovery and Resolution Directive (BRRD) for a US listed bank with operations in the EU. The BRRD programme team was required to assess the impact of BRRD on its European banking entities, develop a plan to achieve compliance and implement the plan within the guidelines proposed by the European Banking Authority.
DESCRIPTIONIn accordance with the BRRD Directive the European Banking Authority (EBA) is mandated to develop a wide range of Technical Standards, Guidelines and Reports with the aim of ensuring effective and consistent procedures across the EU to enhance financial stability, reduce moral hazard, protect depositors and critical financial services and ensure the smooth functioning of the internal market for financial services. The client operates across the EU through a number of entities and the client required Ownet to provide consulting advice and project management to the BRRD programme
APPROACHInitially a small project team with representatives from Legal, Compliance and Risk was established to review the BRRD Directive and make an assessment on its impact on the EU entities and prepare a summary of the work to be undertaken. Based on the findings, a BRRD programme was inaugurated with inclusion of personnel from Finance and the business lines, a Steering Body created and a Programme Manager appointed. Six separate projects were created to implement the programme with Ownet appointed to lead four of the projects. Each project was unique in its outcome, but the essence of the work was the involvement of each of the affected functions. As such, a separate team was established for each project and tasked to identify the data requirements, how to collect and process the data and produce the required information.   Given that the client was the result of various mergers and acquisitions, data collection was complex, as the array of systems and processes involved was numerous and in certain instances the data required not maintained electronically. Rather than adopting a “Big Bang” approach, management determined that a gradual implementation would be adopted and this strategy was shared and agreed with the various Regulatory Authorities. A phase 1 implementation plan was established to assess whether the client maintained the requisite data, how it was captured and where it was stored. Interim processes were established to capture the existing electronic data, prepare the respective reports and these were enhanced with the manually held data. Phase 2 involved a detailed assessment of the existing processes and an implementation plan to provide the information in a timely and seamless manner. This work was not carried out in isolation as there were other ongoing regulatory projects within the organisation requiring similar data and there was widespread interaction and cross grouping to achieve an efficient capture and consistent flow of information for the respective regulatory reports.
BENEFIT AND OUTCOMEThe client was able to meet its BRRD compliance requirements. The data capture and transaction processes for collating the regulatory reports are sufficient, but not efficient and one of the outcomes is a much wider review of how data is captured and processed and determining what enhancements are required to obtain a seamless flow of information to comply with all regulatory requirements.
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