Resolution planning framework constraints: An analysis based on the Sberbank Europe AG resolution case

Abstract

The paper aims to assess the effectiveness of the resolution planning framework based on the example of the Sberbank Europe AG case. This case is noteworthy, as it was the only one to date involving a banking group that was undergoing a resolution situation and that was, before this event, already fully subject to SRB's resolution planning standards. Furthermore, in this situation, the authorities decided on a resolution strategy materially different to the one prepared as part of the resolution planning. Thus, the paper focuses specifically on the effectiveness of the resolution planning measures that had to be implemented under this very different resolution situation. The paper does not aim for an assessment of the general effectiveness of the whole resolution framework in this case (such as effects on financial stability). However, the paper includes an analysis on potential improvement potentials in the framework in order to support the resolution planning efforts to contribute more significantly to the authorities' decisions and actions in a resolution situation. It thus aims at strengthening the planning efforts for the benefit of both the authorities (in case of a resolution event), as well institutions by allowing them to better align the resolution planning with their general crisis management efforts. This paper is thus addressed to actors active in the resolution planning area both in the industry as well as the authorities.