Yes, Article 4 (5) of Directive 2014/59/EU (BRRD) should be read in the light of Article 4 (1), which refers to the impact of failure due to a number of criteria, which Article 4 (5) requests EBA to specify in more detail to ensure a more consistent approach amongst Member States' practices with respect to determining simplified obligations. Article 4 (5) states that this impact refers to impact on financial markets, on other institutions, and on funding conditions. The same impacts are explicitly referred in Article 4 (1).
This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.