<p>Liquidity has gradually emerged as a key factor in the field of banking crises, not only because of its role in the rapid deterioration of a bank’s situation, but also as a central aspect to be addressed in the post-resolution phase in order to ensure the success of the resolution strategy. The article focuses on the issue of liquidity in resolution, i.e., the availability of adequate funding for the entity resulting from resolution. It puts under scrutiny the existing features of the EU framework—resolution planning, resolution tools, the Single Resolution Fund—with respect to their role in addressing liquidity issues. The other tools that could address the limitations of the current facilities, such as the ESM Common Backstop, ELA, and State aid, are reviewed against the characteristics of a reliable backstop.</p>

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Resolution Financing: The Case of Liquidity

  • Karl-Philipp Wojcik,
  • Michele Cossa

摘要

Liquidity has gradually emerged as a key factor in the field of banking crises, not only because of its role in the rapid deterioration of a bank’s situation, but also as a central aspect to be addressed in the post-resolution phase in order to ensure the success of the resolution strategy. The article focuses on the issue of liquidity in resolution, i.e., the availability of adequate funding for the entity resulting from resolution. It puts under scrutiny the existing features of the EU framework—resolution planning, resolution tools, the Single Resolution Fund—with respect to their role in addressing liquidity issues. The other tools that could address the limitations of the current facilities, such as the ESM Common Backstop, ELA, and State aid, are reviewed against the characteristics of a reliable backstop.