AI Summary of Article 5 Recovery plans
Member States must ensure each institution not in a consolidated group under Articles 111–112 of Directive 2013/36/EU draws up and maintains a recovery plan to restore its financial position after significant deterioration; recovery plans are governance arrangements under Article 74. Competent authorities shall require updates at least annually or after material changes, may require more frequent updates and may exceptionally waive an update for up to 12 months. Plans must not assume extraordinary public support, central bank emergency liquidity or non‑standard central bank liquidity, but must analyse access to eligible central bank facilities and identify expected qualifying collateral.
Plans must include the information in Section A of the Annex (subject to Article 4) and may contain additional items; they must set out measures for early intervention under Article 27, procedures for timely implementation, diverse recovery options and severe stress scenarios including system‑wide and entity‑specific events. Member States may empower competent authorities to require detailed records of financial contracts. EBA, with the ESRB, shall issue guidelines by 3 July 2015 on scenarios; EBA shall submit draft regulatory technical standards on plan content to the Commission by 3 July 2015 for adoption under Regulation (EU) No 1093/2010. The management body shall assess and approve the plan before submission to the competent authority.
Article 5 Recovery plans
1. Member States shall ensure that each institution, that is not part of a group subject to consolidated supervision pursuant to Articles 111 and 112 of Directive 2013/36/EU, draws up and maintains a recovery plan providing for measures to be taken by the institution to restore its financial position following a significant deterioration of its financial situation. Recovery plans shall be considered to be a governance arrangement within the meaning of Article 74 of Directive 2013/36/EU.
2. Competent authorities shall ensure that the institutions update their recovery plans at least annually or after a change to the legal or organisational structure of the institution, its business or its financial situation, which could have a material effect on, or necessitate a material change to, the recovery plan. Competent authorities may require institutions to update their recovery plans more frequently.
In the absence of the changes referred to in the first subparagraph within 12 months following the latest annual update of the recovery plan, competent authorities may exceptionally waive, until the subsequent 12-month period, the obligation to update the recovery plan. Such a waiver may be granted for a maximum period of 12 months.