COVID-19: EBA calls to consider the impact on resolution strategies and resolvability assessment

The European Banking Authority (EBA) published on July 9 a statement on resolution planning in light of the COVID-19 pandemic. With this statement, the EBA intends to reiterate the importance of resolution planning in times of uncertainty to ensure that resolution stands as a credible option in times of stress.  In addition, the EBA highlights the importance for resolution authorities to continue promoting institutions’ efforts to enhance their capabilities and increase their resolvability.

The focus of the statement is ensuring that the current situation is effectively taken into account by resolution authorities all the while maintaining a through the cycle approach and ensuring that resolvability objectives are achieved.   

This article provides further insight on the four main areas that should be considered by the Resolution Authorities.