Implementing the new RAF (Resolvability Assessment Framework)

The brief

We were contracted to provide support for the global implementation of the Resolvability Assessment Framework (RAF) for a tier one global bank.

Our approach

We provided specialists in regulation, risk, banking and solvent wind-down, alongside over 40 consultants including project managers, business analysts and PMOs. The client wanted to implement the RAF globally, whilst meeting UK and other regional regulatory requirements, adding significant complexity to the delivery. This multi-year programme had over a dozen delivery workstreams and we provided consultants for:

• Central PMO;
• Financial interdependencies;
• Minimum requirement for own funds and eligible liabilities (MREL);
• Solvent wind-down;
• Operational continuity in resolution (OCIR);
• Second line of defence risk review and challenge (2LOD);
• Financial market infrastructure (FMI);
• Stays;
• Change and implementation;
• Strategic bank analysis;
• Separability; and
• Legal entity rollout teams.

Each workstream had its own set of deliverables and also contributed to the overall programme deliverables, including the self-assessment document, gap analysis, target operating model (TOM), runbooks and the group recovery plan.

Key workstream activities included:

• Mapping all of the financial interdependencies that could impact the ability to exit resolution across the entire client in more than a dozen countries;
• Gathering requirements, designing and building a capital instruments database in Xceptor to calculate MREL globally and locally;
• Providing evidence to the PRA that the global markets business could be wound down in an effective fashion with minimal impact on areas of the bank;
• Enhancing the existing service catalogue to support OCIR and separability;
• Developing global communication plans for the Financial Market Infrastructure (FMI) and stays;
• Developing and implementing a business readiness approach to manage programme transition to business as usual;
• Assessing the impact of the potential restructuring options through multiple lenses including separation of businesses; and
• Preparing senior management for regulator sessions.

The solution and key benefits

Since May 2020, we have provided a team of highly experienced consultants for this complex multi-year programme and remain one of the key delivery partners. At the peak of the programme, over 500 people were involved (across all delivery partners).

A number of our consultants were involved in the production of the documents submitted to the regulator including the self-assessment documents, allowing the client to meet the requirements of the regulation. We were also heavily involved in the financial interdependencies and solvent wind-down workstreams, which have been closed and are embedded into business-as-usual (BaU). As delivery is embedded into BaU, our consultants have undertaken skills and knowledge transfer activities to our clients’ team to ensure future success.

At the end of the project, all regulatory timelines were met, and regulatory submissions were made including the group recovery plan and self-assessment. We also provided ongoing support to aid the client to move project activities and deliverables into business as usual.