Financial Sector Assessment Program – Financial Safety Net and Crisis Management Technical Note

Spain: Financial Sector Assessment Programme – Technical Note on Financial Safety Net and Crisis Management

Electronic access:

Free download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

The Spanish authorities have made significant progress in establishing an effective crisis management and resolution system. The authorities have supported the Single Resolution Board (SRB) in establishing resolution plans for significant institutions (SIs) and agreed on resolution plans for less significant institutions (LSIs), strengthened coordination between authorities, developed crisis management manuals and participated in crisis simulation exercises. There have been improvements in the restructuring capacity of Spanish banks, for example in relation to their compliance with the European Minimum Requirement for Own Funds and Eligible Liabilities (MREL). The Spanish authorities have also improved their internal and inter-authority crisis preparedness. However, further work is needed to increase the operational capacity of the resolution system. The 2017 Banco Popular Resolution emphasised that an adequately staffed resolution authority that is able to deal with burn-out cases, internally and through the ability to involve external parties at short notice, is essential to maintaining financial stability.