SRB Approach to Public Interest Assessment Under Resolution Framework
SRB published a paper that outlines its approach to the public interest assessment under the resolution framework in EU. The public interest assessment examines whether the resolution of a particular bank that is failing or likely to fail would be necessary, for example, to ensure one or more of objectives of resolution. The objectives of a resolution are to maintain financial stability, protect covered depositors, and safeguard public funds by minimizing reliance on extraordinary public financial support. If resolution is not deemed necessary, resolution actions would not be taken and national insolvency procedures would apply.
The published document offers clarity about the factors that SRB takes into account when conducting a public interest assessment and explains how SRB applies the criteria set out in EU law. When SRB considers whether to plan for or to take resolution action—both at the resolution planning stage and after a failing or likely to fail declaration—it performs a public interest assessment. The conclusion of public interest assessment drives the decision on whether resolution is to be considered as the preferred option in resolution planning. The approach was developed by SRB and national resolution authorities, in consultation with ECB and EBA, to ensure a common understanding across the Banking Union. It is one of the key policies underpinning the work of SRB.
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Keywords: Europe, EU, Banking, Resolution Framework, Public Interest Assessment, Resolution Action, Banking Union, ECB, EBA, SRB
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