The European Banking Authority (EBA) has this month published a Handbook on Valuation for Purposes of Resolution. The Handbook, which is addressed to central banks throughout the EU, seek to foster convergence and consistency in valuation practices as well as the interaction with independent valuers across the EU.
The Handbook has been developed in consultation with the IVSC and includes provisions set out across the IVS 2017 General Standards, identified as an authoritative source of reference on market best practice.
The Handbook provides guidance on the practical steps of the valuation process, on the specific valuation criteria applicable to the various resolution tools and, with a view to facilitating the adoption of an informed decision by the resolution authority, by indicating the content that is expected to be included in the valuation report.
The adoption of the Handbook relies on Article 29(2) of Regulation (EU) No 1093/2010 establishing the EBA. The Handbook follows the earlier publication of a Framework for Valuation by the European Single Resolution Board (SRB), which also references IVS and which aims to provide the general public and future potential valuers with an indication of expectations of the SRB regarding the principles and methodologies for valuation.