Forecast Collaborates with EU... Exchange on Banks' 'Advance Will' RRP System

Mutual Cooperation in Information Sharing and Financial Company Restructuring

[Asia Economy Reporter Minwoo Lee] The Korea Deposit Insurance Corporation (KDIC) has joined hands with the European Union (EU). They will share information related to the Recovery and Resolution Plan (RRP) system, under which large financial companies prepare recovery and resolution plans in advance before a crisis occurs.

On the 14th, KDIC announced that it signed a cooperation agreement with the EU Single Resolution Board (SRB), focusing on sharing information related to the European RRP system and personnel exchanges.

The EU SRB is the European integrated resolution authority responsible for establishing and executing resolution plans for major banks and others. The RRP system was established based on recommendations from the Financial Stability Board (FSB), the top international organization responsible for financial regulatory reform, and has been implemented since last year. Each year, systemically important financial institutions (SIFIs) are selected and required to prepare RRPs.

This agreement is KDIC’s first resolution-related agreement. It is expected to contribute to enhancing the quality of domestic RRP system operations, including sharing information on resolution trends such as resolution plans for financial companies operating across countries. Furthermore, the two institutions agreed to cooperate in the event of an actual resolution of financial companies.

A KDIC official stated, "Taking this agreement as an opportunity, we plan to pursue agreements with resolution authorities in several advanced countries, including the United States, to promote exchange and cooperation in the international community. We will continue efforts to strengthen resolution capabilities and further solidify our position as the top resolution expert domestically."

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