efdi stress testing work group · fscs approach (iii) » the below is presented as a high level...
TRANSCRIPT
Agenda
DGS Stress Testing: Scene Set
Stress Test Plans: Key Themes
FSCS Approach
Possible Challenges
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DGS Stress Testing: Scene Set (I)
» A reminder…..
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Intervention ScenarioTesting
Increased Complexity
Testing
PriorityTesting
• Pay-Out• Failure Prevention• Contribution (resolution)• Contribution (insolvency)
• SCV File Testing• Operational Capabilities• Funding• Cross Border
DGS Stress Testing: Scene Set (II)
» Questionnaire Response:
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DGS1 DGS2 DGS3 DGS4
Que
stio
n
Do you have a StressTest plan? Yes Yes Yes Yes
Have you submittedyour plan to the EBA? Yes Yes Yes Yes
Have you conducted a test under the plan? Yes Yes Yes Postponed
What was the test?- SCV File Test- Technical X-Border- Pay-Out X-Border
- SCV File Test
- SCV File Test (live)- Op Capability (live)
- SCV File Test
What were the key learnings?
- Communications- IT Support
- Technical observations
- Not all indicators covered by livescenario
- TBC (postponed)
When & what is your next test?
Operational Capability (Sept 2017)
Operational Capability &SCV File Testing
Funding & Operational Capability (Jul ‘17-Jul ‘18)
TBC
Stress Test Plans: Key Themes (I)
» What do we know about the planned testing activity….
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20172018
20192020
2021
NoofTests
TestYear
VolumeofPlannedTesting
SCVTesting
OperationalCapability
CrossBorder
Funding
Stress Test Plans: Key Themes (II)
» Programme Duration
› Spanning 5yr time horizon
› Focus years 1 to 3
» Separation of Duties (Steering v Delivery)
› Clear separation of Steering v Oversight
› External observer; inconsistent
» Stakeholders
› Identification of impacted parties
› Clearly calling out Designated Authority
» Starting Position
› Different entry points to the testing
› Possible delivery challenges
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FSCS Approach (I)
» Separation of Duties: Steering Group versus Delivery Group
› Utilise existing structures; Senior Management (steering) / Operational Management (delivery)
» Existing Testing & Exercising Strategy: Use It!
› Don’t reinvent the wheel – use existing methodologies
» Resourcing: Top Level Commitment
› Testing & Exercising comes at a cost; ensure that there has been full consideration of the end-to-end requirement; impact on the existing programme and securing of resources (cash / people)
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FSCS Approach (III)
» The below is presented as a high level overview of the deliverables over the five year time horizon:
» SCV File Test› Scope: To perform routine checks of SCV files of credit institutions as directed by the Competent
/ Resolution Authority, including identification of depositors earmarked at branches in other Member States (where relevant).
› Execution: Ongoing, quarterly review cycle.
» Operational Cross Border Cooperation Test (Technical)› Scope: To test the DGS ability to create and transmit a test file to another DGS, with
confirmation form the host DGS that the file can be read into host systems.› Execution: April 2017
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DeliveryYear
Testing
2017 2018 2019 2020 2021SCV
√ √ √ √ √
OperationalCapabilities √ X X √ XCross-Border
√ √ X √ XFunding
X √ X √ X
FSCS Approach (IV)
» Operational Capability Test
› Scope: To test the DGS ability to effect pay-out within 7days using a credit institution which has been identified as suitable for pay-out by the Resolution Authority. The institution may be one for which insolvency and pay-out is the likely resolution, and likely to be at the upper end of that range.
› Execution: September 2017
» Operational Cross Border Cooperation Test
› Scope: To test the DGS ability to create and transmit a payment instruction file to another DGS, with confirmation form the host DGS that the file contains the relevant information to effect pay-out.
› Execution: April 2018
» Funding Capability Test
› Scope: To test the DGS adequacy of ex ante and ex post funding arrangements, and other arrangements in place for accessing alternative funding.
› Execution: September 2018
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Possible Challenges
» Approach
› Differing approach; how can EBA take comfort on approach
» Coordination
› Is there a case for central alignment in relation to Cross Border testing
» Timelines
› With differing reporting timelines, is there enough time to peer review
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