Response to consultation for institutions and resolution authorities on improving resolvability
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Since Article 15 of the BRRD mentions that an institution for which it is feasible and credible for the resolution authority to liquidate it under normal insolvency proceedings is deemed to be resolvable, we believe that additional guidelines on improving resolvability are not necessary for liquidation entities. Applying these guidelines to liquidation entities would therefore mean an unnecessary operational burden.
If application would be left to the discretion of the relevant resolution authority, this would reduce the operational burden for liquidation entities. However, more details should be provided on timelines and criteria for applying such discretion, in order not to create any uncertainty for liquidation entities whether they should (partially) apply these guidelines.
Q1. Do you have any comments on the scope of application of these guidelines?
The EAPB preference for the scope of application is that these guidelines should not be mandatorily applicable for banks under simplified obligations.Since Article 15 of the BRRD mentions that an institution for which it is feasible and credible for the resolution authority to liquidate it under normal insolvency proceedings is deemed to be resolvable, we believe that additional guidelines on improving resolvability are not necessary for liquidation entities. Applying these guidelines to liquidation entities would therefore mean an unnecessary operational burden.
If application would be left to the discretion of the relevant resolution authority, this would reduce the operational burden for liquidation entities. However, more details should be provided on timelines and criteria for applying such discretion, in order not to create any uncertainty for liquidation entities whether they should (partially) apply these guidelines.