Implementing the Bank Recovery and Resolution Directive

Policy Statement 1/15 | Consultation Paper 13/14

Published on 16 January 2015

Supervisory tools: Recovery and resolution plans - PS1/15, SS18/13 and SS19/13

A core aspect of the Prudential Regulation Authority’s (PRA) approach is that it will ensure preparedness for either recovery or resolution of a failing firm. This PRA policy statement contains final rules on recovery and resolution planning and is accompanied by two supervisory statements. Together these documents set out the PRA’s recovery and resolution planning framework.

The rules and supervisory statements are relevant to holding companies, mixed financial holding companies, mixed activity financial holding companies, banks, building societies, and PRA-designated investment firms.

The rules and supervisory statements take effect from 19 January 2015, except for the rules to require a contractual clause recognising bail-in powers in liabilities governed by the law of a third country. These rules will be phased in starting with the first phase, which applies to debt instruments, commencing on 19 February 2015. The second phase, which applies to all other relevant liabilities will commence on 1 January 2016, as set out in the final rules.

Policy Statement

This policy statement (PS) sets out the final PRA rules on implementing the Bank Recovery and Resolution Directive (BRRD), updates two related supervisory statements and responds to feedback received by the PRA to its proposals in CP13/14 (CP).

The rules:

  • require the industry to be better prepared for future financial stress through credible and robust recovery planning, 
  • help the Bank of England in its role as the resolution authority by requiring firms to provide information to be used in resolution plans, and 
  • ensure the feasibility of bailing-in creditors, in the case of cross border firms, by requiring the contractual recognition of bail-in.

The rules will require banks, building societies and PRA-regulated investment firms to produce recovery plans (identification of options to recover financial strength in stress situations) and resolution packs (information to support resolution planning by the authorities).

Update 16 January 2015

PS1/15 replaces PS8/13 (published on 19 December 2013).

PDFPolicy Statement 1/15

Recovery Planning Supervisory Statement

This supervisory statement sets out the PRA's expectations for firms’ recovery plans.

Supervisory Statement 18/13

This supervisory statement was updated on 16 January 2015 to include the PRA's expectations on scenario testing and the wind-down analysis.

Resolution Planning Supervisory Statement

This supervisory statement sets out the PRA's expectations for the information that firms should provide to the regulator to aid resolution planning. 

Supervisory Statement 19/13

This supervisory statement was updated on 16 January 2015 to reflect that it now applies to firms and holding companies.

Published on 24 July 2014

Implementing the Bank Recovery and Resolution Directive - CP13/14

This consultation paper (CP) sets out proposed changes to the PRA Rulebook to implement the European Union Bank Recovery and Resolution Directive (2014/59/EU) (BRRD), and amendments to a supervisory statement to reflect the PRA’s expectations.


The BRRD provides authorities with a common set of tools and powers for dealing with failing banks, and requires banks to facilitate this process by providing information for recovery and resolution planning purposes as well as meeting resolvability requirements.

The PRA proposes to make rules concerning recovery plans, resolution packs, intragroup financial support agreements, notification of failure or likely failure, and contractual recognition of bail-in. The requirements in the BRRD regarding recovery and resolution planning will be addressed by building on the PRA’s existing recovery and resolution planning framework which has been in force since 1 January 2014. In addition to new rules, the PRA also proposes to amend its Recovery Planning supervisory statement (SS18/13) to set out its expectations in relation to the proposed recovery plan rules.

Summary of the proposals covered by the CP

This CP covers the PRA’s proposed approach to:

(a) preparing, maintaining, and submitting recovery plans;
(b) providing information for resolution planning purposes;
(c) entering into intragroup financial support arrangements in advance of recovery;
(d) notifying the PRA of failure or likely failure; and
(e) recognising in the contracts for certain liabilities that they may be subject to bail-in.

The CP is relevant to UK banks, building societies and PRA-designated investment firms. It is also relevant to parent undertakings of firms which comprise financial holding companies, mixed financial holding companies and mixed activity holding companies.

As noted above, the PRA plans to publish final rules, policy statement and supervisory statement in mid-January 2015 and will confirm the date in due course.


The consultation closed on 19 September 2014.

PDFConsultation Paper 13/14

PDFPress release

Other prudential regulation releases