Recovery and Resolution Planning
Recovery and Resolution Planning is a bank-resolution concept describing how authorities prepare for, trigger or execute the stabilization of a failing institution while allocating losses across the capital structure.
Recovery and Resolution Planning is a bank-resolution concept describing how authorities prepare for, trigger or execute the stabilization of a failing institution while allocating losses across the capital structure.
How Recovery and Resolution Planning works
In practice, the metric or rule is read together with the bank's asset mix, liability structure, supervisory framework and stress assumptions. For Recovery and Resolution Planning, accounting treatment, regulatory definitions and management actions can all affect the reported number and its economic meaning.
Why it matters in markets
Recovery and Resolution Planning matters because banks transform short-duration liabilities into longer-duration and riskier assets. Regulatory buffers and balance-sheet metrics are designed to show where that transformation can become fragile.
How to interpret Recovery and Resolution Planning
Interpret Recovery and Resolution Planning together with regulatory definitions and the bank's actual balance-sheet composition. Compare current levels with internal or regulatory requirements, recent trends, peer banks and stress scenarios rather than relying on one period in isolation.
Limits and context
Recovery and Resolution Planning can differ across jurisdictions, accounting standards and supervisory regimes. Regulatory ratios are also snapshots and may not capture intraday liquidity, off-balance-sheet commitments or rapid changes in depositor behavior.
BondStats educational market reference. Definitions describe common market usage and are not investment, legal, accounting or regulatory advice.