5.4.5.2 The award of ELA in resolution

Although it may not be assumed in the resolution plan, when a bank is put in resolution it may still have access to ELA if it is considered solvent and has sufficient clearly identified eligible collateral. Whether a bank still has access to ELA when it is put in resolution depends on whether it can still be considered solvent as defined by the ECB. The application of the resolution tools may lead to the bank becoming financially sound again. For example, in the case of resolution through application of the asset separation tool, liquidity can be provided to the solvent part of the bank that is participating in monetary policy transmission and not in order to finance the separation itself. Its restored solvency will first have to be confirmed by the competent authority, before it can have access to ELA (and Eurosystem monetary policy liquidity) again. A bridge bank may also have access to such liquidity once it has obtained a license as a bank and complies with the relevant capital, liquidity, and leverage ratios.1 Wind up entities, whose main purpose is the gradual divestment of their assets and the cessation of their business (such as asset management vehicles), have been excluded from access to monetary policy credit operations. As regards their access to ELA, the relevant central bank assesses the situation of each entity according to that central bank’s national framework. However, in most cases, these entities are unlikely to obtain access to ELA, if there are doubts as to their solvency, or if this would raise monetary financing concerns.