Analyzing, Assessing and Determining Critical Functions and Relevant Credit Institutions within the Banking Resolution Regulatory Frame - Proposal for a Practical Approach

The 2014 framework for the recovery and resolution of credit institutions and investment firms led by the Directive 2014/59/EU of the European Parliament and of the Council introduces the concept of critical functions and the requirement for resolution authorities to identify and ensure their continuance in case of resolution; however the guidelines on how to determine these critical functions (including advice in secondary legislation and other technical guidelines) are very broad, leaving room for ambiguity, different approaches and non-comparable results.This paper proposes a practical methodology for identifying the critical functions and the relevant credit institutions within the BRR Directive framework