In the process of assessing institution resolvability, choosing resolution tool and exercising its powers, resolution authority shall take into account resolution objectives. All resolution objectives are of equal importance.
- The sale of business tool
- The bridge institution tool
- The asset separation tool
- The bail-in tool
The sale of business tool means sale of assets, rights or liabilities of the institution under resolution, in a whole or in a part, or sale of shares or other instruments of ownership of the institution.
The bridge institution tool preserve continuity of operations of a failing institution. Bridge institution returns to the market as soon as the necessary conditions are satisfied.
The asset separation tool enables transfer of the assets, rights or liabilities of the institution under resolution to asset management vehicle. Asset management vehicle is an entity in partial or total ownership of the DAB. The asset separation tool applies only in combination with other resolution tools.
The bail-in tool applies to all liabilities of an institution except those excluded under the provisions of the Act. The bail-in tool ensures that shareholders and creditors of the failing institution are first liable for bearing the losses and that they assume the appropriate part of the costs incurred in the institution's failure. By introducing bail-in tool shareholders and creditors of an institution are encouraged to monitor institution’s operations with due care.