On 30 April 2021, the Single Resolution Board (SRB) published new guidance on liquidity and funding in resolution.

In the SRB’s Expectations for Banks, banks are expected to:

  1. Develop methodologies to estimate ex-ante the liquidity needs for the implementation of the resolution strategy.
  2. Be able to measure, report and forecast their liquidity position and relevant liquidity metrics during the resolution process.
  3. Be able to identify and mobilise assets (especially of lower quality and less liquid) that could be used as collateral to obtain liquidity in resolution anticipating any legal, regulatory and operational obstacles to their mobilisation under stressed conditions.

The new SRB guidance focuses on item 1 above. Banks will be assessed on this element in the 2021 resolution planning cycle. The SRB will publish further guidance for the two remaining elements in 2022.

Leave a Reply

Your email address will not be published. Required fields are marked *