The European Banking Authority (EBA) has published three sets of final guidelines which stem from the Bank Recovery and Resolution Directive (BRRD) and are designed to give guidance to EU resolution authorities on the circumstances they should assess when taking their resolution decisions.

The final guidelines are on:

  • factual circumstances amounting to a material threat to financial stability and on the elements related to the effectiveness of the sale of business tool under article 39(4) of the BRRD. In particular the guidelines specify that an EU resolution authority may deviate from the standard marketing requirements for the sale of the business of an institution under resolution, if the failure of the institution represents a material threat to financial stability and there is a conflict between the effectiveness of the tool and the marketing requirements;
  • the determination of when the liquidation of assets or liabilities under normal insolvency proceedings could have an adverse effect on one or more financial markets under article 42(14) of the BRRD. The guidelines provide guidance on what assets may be transferred under the asset separation tool to an asset management vehicle (bad bank). According to the guidelines the analysis of these assets should be carried out over three steps: assessing the market situation for the assets concerned, the impact that their liquidation may have on markets and the effects that may result on financial stability; and
  • the minimum list of services or facilities that are necessary to enable a recipient to operate a business transferred to it under article 65(5) of the BRRD. The guidelines define a minimum list of necessary ‘critical services’ that EU resolution authorities may require from institutions under resolution.

View EBA issues guidance on the implementation of resolution tools, 20 May 2015