Bail-in Solution with Irion EDM®: 70million record dry-run in 1 hour

When a Public Interest Bank enters a situation of failure, a controlled crisis resolution procedure is preferred to avoid a traumatic bankruptcy: one of the most important tools for dealing with such situations is the Bail-in.

In order not to burden the community as a whole, the mechanism requires that the money needed to cover losses and recapitalize the institution be taken from shareholders, bondholders, depositors and creditors in general. Yes, but how much money? From which counterparties? Safeguarding which categories? And how to prove that no creditor will be treated worse than in an ordinary insolvency proceeding?

Preparing for Bail-in: the dry-run

In part to answer these questions, the European supervisor (Single Resolution Board) requires that a test called dry-run be conducted annually to verify that the bank has set up and maintains all the procedures necessary to deal with a possible emergency within a total of 48 hours, the so-called “Resolution Weekend.” To address this need, a leading Italian banking group has implemented a Data Management solution based on Irion EDM®: the platform performs calculations and supports user verifications to certify the correctness of data to be submitted to management and the Internal Resolution Team.

Process 20 million reports in 1 hour

In the specific context, the application of a resolution strategy involving the use of Bail-in involved the involvement of more than 100 corporate structures with extremely tight timelines, so a key requirement concerned the ability to compress processing time into a window of less than 2 hours. The evaluation scope included nearly 20 million reports, and the excellent processing performance allowed users to proceed by successive iterations, sifting through different scenarios, until the one that best met the exercise’s objectives was identified.

Effectiveness and autonomy with an historicized setup

The activities on the application were carried out in complete autonomy by the office involved, thanks to the effectiveness and ergonomics of the dispositive actions offered by the Solution: all the setups and different calculation configurations adopted were historicized, with evidence of the results that resulted, guaranteeing full traceability and demonstrability to any interested third parties. We summarize the main numbers of the dry-run 2023 exercise:

  • Nearly 70 million records read as input and just under 20 million records written as output
  • Five simulations with different parameters, supporting “what-if” analysis
  • Zero technical errors encountered and full compliance of calculations performed
  • Only 1 hour for the batch processing (end-to-end) of the steps included in the Solution scope

The success of the concluded exercise and the satisfaction expressed by the Customer consolidate the application supervision provided by Irion in the Resolution Plans area and allow users to prepare for the future dry-run 2024 with the peace of mind provided by the availability of a complete, powerful and configurable tool.

Learn how to manage compliance with 100% harmonized and traceable processes

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