4.5.3 Application of the resolution tools

This section discusses the application of the resolution tools by the resolution authorities. As set out in section 4.5.1.2, the resolution tools are always applied by the national resolution authorities, also if the resolution scheme is adopted by the SRB, in accordance with the relevant provisions of the BRRD as transposed into national law.1

The sale of business tool, bridge institution tool and asset separation tool are hereinafter together referred to as the ‘transfer tools’. They have as a purpose the transfer of shares, other instruments of ownership, assets, rights or liabilities of the bank in resolution in order to ensure continuity of critical functions and/or maximizing the value of transferred assets through eventual sale or winding up in an orderly manner, as applicable. The transfer tools can be distinguished from the bail-in tool that has as its purpose to recapitalise the bank in resolution or to absorb losses by converting to equity or reducing the principal amount of claims or debt instruments that are transferred under a transfer tool. Taking into account these different purposes, the conditions for the application of the transfer tools are more or less the same, while the conditions for the application of the bail-in tool are different. These conditions are therefore discussed separately in the following sections.