The Single Resolution Board (SRB) publishes today its operational guidance on the identification and mobilisation of collateral in resolution. It is aimed at banks’ capacity to identify and mobilise certain asset classes that could be used as collateral in resolution in a timely way to support financial continuity.
As stated in the 2022 SRB Work Programme, liquidity and funding in resolution is one of the three common priorities for the 2022 Resolution Planning Cycle (RPC). This operational guidance complements the SRB’s Expectations for Banks (EfB) document that sets out the capabilities the SRB expects banks to demonstrate to show that they are resolvable, in providing banks with additional guidance on the identification and mobilisation of collateral during and after resolution.
The guidance is structured around three objectives:
- ensuring that banks’ collateral governance and management is able to support the resolution scheme and contribute to the financial continuity of the group
- ensuring that banks have capacity to identify collateral, including its amount, location, governing law, currency and overall availability
- assessing banks’ capacity to mobilise collateral, and in particular non-marketable assets and assets not eligible for ordinary CB funding
It provides a clear understanding of the operational and legal requirements that banks need to anticipate in order to maximise the amount of assets that could be mobilised as collateral in and after resolution. This concept allows the SRB to access the necessary information and analysis from banks to make full use of resolution tools should a bank get into difficulty, and to ensure financial stability of banks in resolution.
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