Continuous and smooth access to payment systems for banks in resolution

Abstract

One of the main objectives of resolution authorities is to ensure, to the maximum extent possible, the continuity of critical functions for a firm in resolution. The continuity of critical functions, in most cases, requires continuous access to the clearing, payment and settlement services that underpin them. This paper focuses on payments-specific aspects deriving from experience gained in relation to bank resolution in Italy. Drawing on these events, the paper shares some lessons learned with respect to ensuring continuity of access to payment systems in the resolution phase, proposes some practical approaches to reducing operational risk during the resolution phase, and highlights some areas for improvements with possible follow-up actions.