To avoid bank collapses in the future, the European Banking Authority (EBA) wants all banks to have recovery plans. The recovery plan is, in short, a plan on what to do if the bank faces the risk of going down. By having a plan in place, the bank should be able to avoid a total crash, even though the situation may be difficult. The EBA is now discussing whata recovery plan should contain, and have invited stakeholders to give input.

NFU welcomes the discussion on recovery plans. We believe that European-wide systems for bank recovery would both enhance the resilience and sustainability of the sector. It would also establish a level playing field and sound competition.

In the NFU input to EBA, we have stressed the point that employees can contribute to better corporate governance through representation on company boards as well as enhanced supervision. Finance employees can make a crucial contribution to recovery arrangements and provide unfiltered information on daily practices that can aid early warning measures. We know that employees have knowledge about a financial company’s daily practices that cannot be acquired anywhere else.

Read NFU’s consultation reply to the EBA Discussion Paper on a template for recovery plans here.