Consultation on draft Guidelines on the asset separation tool and on the sale of business tool

The European Banking Authority (EBA) launched a consultation on two sets of draft Guidelines related to the Bank Recovery and Resolution Directive (BRRD). The documents aim at facilitating the implementation of resolution tools in the EU banking sector, and in particular at regulating the sale of business tool and the asset separation tool. The consultation runs until 22 December 2014.

 

The consultation groups together the Guidelines on the sale of business tool and the Guidelines on the asset separation tool. Both relate to the implementation of resolution tools against constraints stemming from the EU competition and transparency rules in relation to state aids. They aim at balancing these constraints with the objective of an efficient resolution regime.

 

More specifically the Guidelines on the sale of business tool specify when authorities may deviate from certain marketing requirements for the sale of the business of an institution under resolution. They provide for the possibility of deviating from standard marketing requirements, if the failure of the institution represents a material threat to financial stability and there is a conflict between the effectiveness of the tool addressing such threat and the marketing requirements. The Guidelines contain a comprehensive list of elements to assess this threat and illustrate potential conflicts with each of the marketing requirements. The Guidelines on the asset separation tool give guidance on assets that may be transferred under the asset separation tool. They suggest three steps in this regard: an assessment of the market situation for the assets concerned, the impact that the liquidation may have on markets and financial stability.

Comments to these consultations can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 22 December 2014.

 

All contributions received will be published following the close of the consultation, unless requested otherwise. A public hearing will then take place at the EBA premises on 28 November 2014 from 9.30 am to 12.00 noon UK time.

The proposed Guidelines are based on Articles 39 and 42 of the BRRD, which mandate the EBA to promote convergence of supervisory and resolution practices on the effectiveness of the sale of business tool, on the conditions for applying the asset separation tool.