Article 32(6) of the Bank Recovery and Resolution Directive (BRRD) mandates the European Banking Authority (EBA) to issue guidelines to promote the convergence of supervisory and resolution practices regarding the interpretation of the different circumstances when an institution should be considered as failing or likely to fail.
Article 32(4) of the BRRD provides a general description of the circumstances in which an institution shall be deemed to be failing or likely to fail. The guidelines that the EBA is mandated to issue further specify those circumstances in order to ensure a consistent approach to triggering resolution, especially for cross-border groups.
The EBA has now published its final guidelines on the circumstances under which an institution shall be considered as failing or likely to fail. Member State competent authorities and resolution authorities are expected to apply the final guidelines from 1 January 2016 following the implementation of the EBA guidelines on common procedures and methodologies for the supervisory review and evaluation process.
View EBA publishes guidelines on triggers for resolution, 26 May 2015