European banks must enhance their capability to assess and report on their liquidity and funding position during a resolution with greater speed, detail, and reliability.
The Single Resolution Board (SRB) launched a public consultation to consolidate and enhance its Operational Guidance on liquidity and funding in resolution. The initiative aims to incorporate lessons learned from ongoing resolvability assessments and recent market events, including the 2023 banking turmoil.
As the central resolution authority for the Banking Union, SRB is responsible for ensuring the orderly resolution of failing banks, aiming to minimize the impact on the economy and public funds. This new guidance is a core part of that mission.
Unlike standard periodic regulatory reporting, liquidity and funding information in resolution is purpose-built for crisis management. It is designed to provide SRB with critical, on-demand data during a bank failure, enabling swift, effective decision-making. This framework moves beyond a theoretical "check-the-box" exercise to a practical test of a bank's true operational readiness. The Technical Meeting of 12 June 2026 clarified that this includes not only the ability to retrieve existing information, but also to update estimates and scenarios at short notice when relevant inputs change.
Once finalized, this new guidance will replace three previous SRB guidance documents on liquidity and funding needs, collateral mobilization, and funding in resolution, consolidating them into a single document. The consolidation is not merely editorial: it is also intended to create clearer links between EfB 3.1, 3.2 and 3.3, reduce duplication and reuse analyses already performed under related resolution capabilities. While the SRB states that this does not create new periodic reporting deliverables, it introduces optional templates. They show the expected structure and level of detail, but institutions may use their own systems and formats so long as they can provide the required information effectively.
Key timelines for banks
- Consultation period: 11 May 2026 – 06 July 2026
- Feedback analsysis: Q3 2026
- Final guidance: Tentatively expected in Q4 2026
- Proposed application: From the 2027 resolution planning cycle; however, the application date is not yet decided and the SRB is also seeking views on a staggered implementation approach
SRB’s proposed guidance introduces a more demanding and detailed framework for operational readiness. The majority of the substantive changes relate to EfB 3.1 on the estimation of liquidity and funding needs, while changes to EfB 3.2 and EfB 3.3 mainly consist of clarifications, governance enhancements and targeted operationalisation.
SRB's stated area of update |
Key change and impact |
| Scope of Key Liquidity Entities (KLEs) | Branches, SPVs, and other entities may be relevant, but are not automatically designated as KLEs. The identification depends on liquidity relevance, resolution group structure, business model and proportionality. Banks may also discuss the grouping or exclusion of certain KLEs with the IRT where justified. |
| Methodological assumptions for estimating liquidity | The guidance introduces a more severe "fast-moving" scenario in which a bank enters resolution within one month of crisis onset, compared with three months under the previous approach. It also expects banks to consider a variant resolution strategy where relevant. |
| Governance expectations on the liquidity situation | Banks must have the capability for short-notice and high-frequency information provision. Short notice means up to 24 hours, while high frequency means more than once per day, including intraday information where relevant. |
| Collateral-related expectations | The focus shifts to the practical mobilisability of available collateral, including location, encumbrance, eligibility, value basis, legal or operational constraints and the estimated time to mobilise. |
The definition of "Key Liquidity Entities" (KLEs) has been significantly expanded beyond material legal entities to include any entity critical to group liquidity, including branches and Special Purpose Vehicles (SPVs). The Technical Meeting clarified that such entities are not automatically KLEs; the assessment must reflect their actual liquidity role, the resolution-group structure and the institution's specific business model. Banks have the option to use the new Annex II template, which covers both KLEs and Key Liquidity Drivers (KLDs), to map these entities and their intricate funding dependencies. The template is optional, and KLEs may be grouped or excluded in justified cases following discussion with the IRT.
The SRB also clarified that KLE and KLD analyses do not necessarily need to be recreated in full every year. Updates are expected where the resolution plan changes materially, where a material corporate change occurs or where the IRT prioritises the topic in the relevant resolution planning cycle.
Banks must now adopt a more sophisticated methodology to calculate their Liquidity in Resolution Estimate (LRE). This involves forecasting the net liquidity position by modeling the behavior of all KLDs, such as deposit outflows, credit line drawdowns, and derivative-related payments, under a severe stress scenario. However, the Technical Meeting clarified that not every KLD must be applied to every KLE; the selection and granularity should reflect the institution's specific risk profile, business model and funding structure. The methodology must now account for modern risks and capture peak intraday liquidity needs.
The fast-moving scenario is shortened from three months to one month before entry into resolution. The SRB linked this change to recent banking turmoil and noted that in some cases crises may unfold even faster.
Banks are also expected to consider not only the preferred resolution strategy but, where relevant, a variant strategy. The post-resolution projection horizon may differ depending on the resolution tool, for example between bail-in and transfer strategies.
SRB is moving beyond theoretical planning to practical testing. Banks must now prove their capabilities through liquidity data collection and capability testing exercises that simulate both "slow-moving" (12+ months) and "fast-moving" (within one month) crisis scenarios. These exercises assess not only the reported liquidity position but also the bank's MIS, governance, data quality and ability to produce accurate, complete and timely information under pressure. Success is measured by the ability to provide accurate, granular data on-demand, demonstrating that resolution plans are operationally sound. The data for these capability tests is currently reported via the SRB's CASPER portal.
A particularly important Q&A clarification was that the 24-hour expectation may require banks to update liquidity estimates and rerun relevant scenarios when assumptions or inputs change, rather than merely extracting previously calculated figures.
The Joint Liquidity Template is strongly encouraged for presenting the outcome of liquidity estimates because it is used both for exercises and for crisis purposes. Institutions may use another format if it provides comparable granularity.
To ensure access to all potential funding sources in a crisis, including the Single Resolution Fund (SRF), which provides liquidity on a fully collateralized basis, the framework assumes a bank's best assets will already be encumbered. The key issue is therefore not only the existence of collateral, but its practical mobilisability, including its location, encumbrance status, legal constraints, central-bank eligibility and the operational steps needed to mobilise it. The new Annex III template indicates the expected level of information on available collateral and the estimated "time-to-mobilize" for different asset classes. The Technical Meeting also clarified that different value concepts may be used depending on the asset class, including market value, nominal value or value after haircut, provided the selected basis is clearly identified. However, institutions can use their own systems and formats where they can provide the required information effectively.
The SRB's enhanced expectations create operational and data management hurdles that legacy systems and manual processes cannot easily overcome.
Regnology provides end-to-end regulatory risk solutions to help banks address the SRB's demanding expectations for liquidity and funding in resolution.
Our cloud-native solutions support the workflow from data aggregation to the preparation of structured information. Built on a unified, granular data model, our platform helps banks connect information across Risk, Finance, and Treasury and create a consistent view of liquidity needs, funding constraints, and collateral availability. Where required by the institution, Annex II and Annex III can also be set up in the solution.
By integrating advanced ALM and scenario analysis capabilities, we empower banks to conduct the rigorous stress testing required by the SRB, model complex liquidity risks, and deliver accurate, on-demand reporting with confidence.
This guidance applies to all banks under the direct remit of the Single Resolution Board (SRB), in particular significant institutions and relevant cross-border groups for which resolution is the preferred strategy.
The main differences are the demand for faster, short-notice reporting capabilities, including within 24 hours where required, the focus on more severe "fast-moving" crisis scenarios, and the need for more granular data on collateral mobilization and group-wide liquidity structures (KLEs). The Technical Meeting further clarified that short-notice capability may include updating estimates when relevant inputs change.
A "fast-moving" scenario is one where a bank enters resolution within one month of the crisis onset. It reflects recent banking turmoil, where confidence can deteriorate rapidly, and liquidity stress can emerge very quickly, potentially amplified by digital banking and social media.
Yes, the guidance incorporates the principle of proportionality. For example, for banks with a Multiple Point of Entry (MPE) strategy, liquidity expectations apply at the level of each resolution group, which is expected to manage its liquidity independently, without relying on funding from other parts of the wider group in a crisis. Proportionality also applies to KLE identification, the grouping or exclusion of entities and the frequency of analyses.
The SRB wants to ensure that a bank's resolution plan is not just a theoretical document but can be practically executed under pressure. These exercises test a bank's data systems, governance, and operational readiness in a simulated crisis environment.
No. The SRB states that the update does not create new periodic reporting deliverables. However, it raises expectations around short-notice and high-frequency liquidity and funding information. The annexed templates indicate the expected structure and level of detail, but institutions may use their own systems and formats where appropriate.
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