2.6.1 Funding instruments in times of financial difficulties

A well-diversified funding structure is deemed crucial to guaranteeing banks’ capacity to withstand stress events. This implies avoiding over reliance on individual funding sources and, in particular, on secured funding.1Article 413 CRR provides that banks have to ensure that their long term obligations are adequately met with a diversity of stable funding instruments under both normal and stressed conditions.2 A well diversified funding structure should contribute to a sustainable funding structure that can be perpetuated without public intervention and in which the prices paid for funding allow the viability of the bank. This eventually reduces the risk that a bank ends up in resolution.

This section briefly describes the (public) funding instruments that are available for a bank in order to restore the equity and liabilities side of the balance sheet after getting into financial difficulties.