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Staff working paper: Estimating liquidity needs in resolution in the Banking Union

Abstract: This staff working paper provides a methodology for the ex-ante estimation of the potential liquidity needs that banks could foresee in resolution. Several estimates are provided depending on the timing of the intervention. The sample covers the significant institutions of the banking union under the remit of the SRB. The methodology proposed here is meant to foster the debate on liquidity needs in resolution, and suggests, given the magnitude of such liquidity gaps, that more liquidity tools could be beneficial to strengthen financial stability in the Banking Union.