Regulatory Alerts2024-02-16 | Circular 01/2024 (A)Circular 01/2024 (A) – Minimum Requirements for Resolvability in Resolution Planning
BaFin, Germany’s Federal Financial Supervisory Authority, issued Circular 01/2024 (A) to establish minimum resolvability requirements for domestic financial institutions operating outside the Single Resolution Board’s direct competence. The circular mandates these entities to align their crisis preparedness with seven core dimensions—governance, loss-absorbing capacity, liquidity, operational continuity, data systems, communication, and separability—by preparing and annually updating comprehensive resolution plans. It operationalizes European Banking Authority guidelines by requiring institutions to demonstrate that predefined resolution tools can be deployed effectively to maintain critical functions and prevent systemic disruption during failure.