4.4.3 The resolution tools

The resolution tools are included in Article 37(3) BRRD. These are the sale of business tool, the bridge institution tool, the asset separation tool and the bail-in tool.1 In addition to the resolution tools set out in Article 37(3) BRRD, the Member States may confer additional tools and powers on resolution authorities pursuant to Article 37(9) BRRD, provided that those additional powers do not pose obstacles to effective group resolution when applied to a cross-border group and they are consistent with the resolution objectives and the general principles governing resolution.2

When applying the resolution tools, resolution authorities should have regard to the resolution objectives and choose the tools that best achieve the objectives that are relevant in the circumstances of the case.3 The resolution objectives have been discussed in section 4.4.2. The resolution tools may be applied individually or in any combination.4 The asset separation tool may however only be applied together with another resolution tool.

The resolution authorities should ensure that a valuation of the assets and liabilities of the bank or banking group to be put in resolution is carried out by an independent valuer to inform the decision on the appropriate resolution action to be taken in respect of the bank or banking group.5 The EBA refers to this valuation as Valuation 2 (determination of the tools).6 This valuation is meant to assess the economic value and not the accounting value of the bank’s assets and liabilities.7