4. Resolution authorities should assess at least the following elements, taking into account the …

Resolution authorities should assess at least the following elements, taking into account the urgency of the resolution action:

• (a) whether the market for these assets is impaired, based on the following indicators:
• (i) the development of the liquidity of the markets for these assets or comparable asset classes;
• (ii) whether these assets or comparable asset classes have been classified as impaired for accounting purposes and whether provisions have been set up by institutions in respect of these assets;
• (iii) incurred losses and unstable cash flows under these assets;
• (iv) downward value adjustments of the assets or corresponding price developments of associated hedges or comparable asset classes;
• (v) high volatility in prices compared to the market in general, in particular uncommonly high price differences between different markets that typically show an identical development;
• (vi) reduction of share prices and deterioration of ratings and refinancing conditions of institutions holding high amounts of these assets, compared to the rest of the market;
• (b) the impact of a disposal of these assets on the markets where they are traded, taking into account:
• (i) the size of the markets concerned and the range of potential purchasers;
• (ii) the impact the liquidation of the assets is expected to have on prices for comparable asset prices;
• (iii) the expected timeframe for the liquidation of the assets under normal insolvency proceedings, including a potential accelerated distress sale;
• (c) the situation of the financial markets and the direct or indirect effects of a disposal of these assets, taking into account:
• (i) the risk of a systemic crisis, as evident from the number, size or significance of institutions that are at risk of meeting the conditions for early intervention or the resolution conditions or at risk of undergoing an insolvency procedure, or as evident from public financial support to institutions or extraordinary liquidity facilities provided by central banks;
• (ii) whether the sale of the assets or an impairment of markets can result in contagion, in particular with regard to the amount of assets or comparable asset classes held by institutions, or where these holdings are valued at market prices;
• (iii) a reduction in or an increase in prices of short- or medium-term funding available to institutions;
• (iv) an impairment to the functioning of the interbank funding market, as particularly apparent from an increase in margin requirements, a decrease in ratings of institutions and a decrease in collateral available to institutions.

1. Áttekintés

1.1 Hivatkozások

1.2 Azonosított követelmények

1.3 Kapcsolódó szabványok

2. Azonosított követelmények

3. Kapcsolódó szabványok

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/