Valuation

In 2019, the Single Resolution Board (SRB) published its framework for Valuation along with a Q&A document. This Framework provides potential valuers and the general public with an indication of the SRB’s expectations regarding the principles and methodologies for Valuation 2 - either provisional or definitive, as the case may require – as well as for Valuation 3, which are set out in the legal framework.

The Framework for Valuation reduces uncertainty for both the independent valuers and the SRB, providing indications that are necessary for achieving the goals of the valuation, as well as enhancing comparability and consistency of valuations across future resolution cases.

On 11 December 2020, the SRB has also published its standardised data set to ensure that the minimum needed data is available to support a robust valuation for resolution.

The SRB approach to valuation relies on the ability of banks’ MIS to provide accurate and timely information in the context of resolution readiness. In this respect, the SRB believes in the importance of defining a standardised data set covering the minimum data needed for the valuation of a bank in resolution.

Now, a second key building block of SRB’s approach on valuation is the definition of a standardised data set covering the minimum data needed for the valuation of a bank in resolution.

Following the public consultation, the SRB is publishing three documents:

• The SRB Valuation Data Set instructions document, developing the SRB Valuation Data Set and establishing clear expectations in relation to data needs.
• The explanatory note aiming to provide guidance to the banks regarding their MIS capabilities to produce information that is as up to date and complete as possible and of adequate quality to carry out a fair, prudent and realistic valuation.
• A feedback statement to the consultation that addresses the main comments received on the consultation and it is published alongside the final SRB Data Set for valuation.

These documents do not establish a new set of SRB policies, but they rather represent a guide to support banks in ensuring their MIS capacity.

The SRB has been working on defining the (minimum) set of data that the banks will, in principle, need to provide to the SRB and the independent valuer to perform a valuation. As part of its annual resolvability assessment, the SRB will evaluate the capacity of banks to collect and provide this information on a timely basis to resolution authorities and/or valuers.