The EBA published a Handbook on independent valuers for resolution purposes

The European Banking Authority (EBA) today published a Handbook on independent valuers for resolution purposes. The Handbook enhances convergence by providing best practices, high-quality methodologies and processes for the selection and appointment of independent valuers for resolution purposes, as well as examples on the application of these methodologies under some scenarios.

The EBA has developed this Handbook with the view of improving the process of selecting independent valuers and facilitating its implementation by resolution authorities. The Handbook also identifies safeguards which could mitigate the effects of a potential conflict of interest hampering the independence of the valuer.

The Handbook’s structure follows a chronological order, covering actions before, during and after the appointment of the independent valuer. The preparatory arrangements include actions, such as market research, framework contracts and internal procedures. The Handbook includes specific sections dealing with the assessment of the valuer's independence and the application of safeguards. Finally, after the appointment of the independent valuer, the Handbook includes aspects such as the maintenance of policies and procedures to identify and manage conflicts of interest.

Note to the editors

The Handbook has been compiled in line with Article 8(1)(ab) of Regulation 1093/2010 of the European Parliament and the Council, establishing the EBA, which mandates the EBA to develop and maintain “an up-to-date Union resolution handbook on the resolution of financial institutions in the Union which is to set out best practices and high-quality methodologies and processes for resolution, taking into account the work of the Single Resolution Board, and changing business practices and business models and the size of financial institutions and of markets".

This Handbook provides best practices and high-quality methodologies and processes for the selection and appointment of independent valuers for resolution purposes in accordance with article 36 and 74 of Directive 2014/59/EU of the European Parliament and the Council

The Handbook identifies best practices for the three elements of independence that the resolution authorities should assess for the valuer in line with the existing regulatory framework, which states that the valuer should: i) possess the necessary qualifications, experience, ability, knowledge and resources; ii) be legally separated from the relevant public authority and the relevant entity; and iii) have no material common or conflicting interest with the relevant public authority or the relevant entity.