Preparatory activities

The National Bank, together with banks, will undertake preparatory activities for bank resolution in their operating on a regular basis, for the purpose of better readiness for implementation of the resolution procedure. These preparatory activities mainly refer to the resolution plan, that the National Bank prepares for each bank, as well as determining the minimum requirements for own funds and eligible liabilities (MREL).

The development of the resolution plan is a dynamic process, where banks play an active role. The recovery plan will serve as a basis for plan development, but for the purposes of resolution plan preparation, the National Bank will also collect additional data and information from the banks.

In accordance with the Bank Resolution Law, two types of plans are prescribed, namely a bank resolution plan and a simplified bank resolution plan. The bank resolution plan is prepared for all banks that, based on the criteria stipulated in the National Bank's regulation on the methodology for identifying systemically important banks, have been identified as systemically important banks and the failure of which would have significant adverse impact on the financial market, other banks or on financing conditions. For banks that are not identified as systemically important banks and for which it is considered that their failure would not have significant adverse impact on the financial market, other banks or on financing conditions, the National Bank prepares a simplified bank resolution plan. The resolution plan is updated at least once during the calendar year, or every two years if it is a simplified plan, as well as in the event of significant changes in the bank's organizational and ownership structure, in the business model or in the financial position of the bank that could affect the efficiency and elements of the plan.

When preparing and updating the resolution plan, the National Bank will also assess the bank resolvability. A bank shall be deemed resolvable if it is feasible and credible to carry out bankruptcy proceedings on the bank or if it is feasible and credible to apply the resolution tools and powers, without causing significant negative effect on the financial system and providing continuous access to  bank's critical functions.