The Bank of England has published a consultation paper on valuation capabilities to support resolvability.
Comments on consultation paper (PDF 693 KB) are due by 17 November. This is consistent with valuation standards developed by the EBA, and the Single Resolution Board may follow a similar route.
The Bank is concerned that systemically important banks may not have the data, systems and processes to enable the bank to be valued in a timely and robust manner to determine whether the firm should be put into resolution and the choice of resolution tools.
Banks (major UK banks, their material overseas subsidiaries, and material UK subsidiaries of foreign banks) would be expected to establish, maintain and demonstrate valuation capabilities that meet seven principles:
Banks may find it difficult to demonstrate that they:
If a bank’s valuation capabilities are judged to be inadequate then the Bank of England is likely to require the bank to make the necessary improvements or to hold additional loss absorbing capacity.