[author: Bethan Saunders]

On July 12, 2016 the European Central Bank published a guide on the approach for the recognition of institutional protection schemes for prudential purposes. The report aims to ensure coherence, effectiveness and transparency in the processes of assessing IPSs in accordance with Regulation 575/2013 of the European Parliament and of the Council (the Capital Requirements Regulation).

An IPS is a contractual or statutory liability arrangement which protects its member institutions and ensures that they have the liquidity and solvency needed to avoid bankruptcy where necessary.

The guide sets out how the ECB will assess the compliance of IPSs and their member institutions with the conditions laid down in the CRR.