Why it matters
Banks depend on financial market infrastructures (FMIs) — payment systems, central counterparties, central securities depositories and custodians — to move money and securities and to settle transactions. If access to these systems is lost when a bank enters resolution, its critical functions can halt almost immediately: payments fail, cleared positions cannot be managed, and settlements break down. Continuity of access to FMIs is therefore a core operational condition for an orderly resolution, closely tied to operational continuity in resolution and to preserving critical economic functions.
How access can be lost
Access may be interrupted in several ways. An FMI's own rulebook may permit suspension or termination of a participant that has entered resolution or breached membership requirements, for example minimum credit or collateral standards. A bank that reaches an FMI indirectly, through a correspondent bank or clearing member, may find that intermediary unwilling to continue providing the service. Increased collateral or margin demands during a period of stress can also strain the bank's liquidity. Resolution planning seeks to anticipate these triggers and to keep participation stable while the resolution action takes effect.
Legal basis
There is no single dedicated provision guaranteeing continued FMI access. The safeguards in the Bank Recovery and Resolution Directive (2014/59/EU) that restrict counterparties from terminating or suspending contracts solely because of the exercise of resolution powers, in Articles 68 to 71, are directly relevant, as they help prevent access being withdrawn merely on the ground of resolution. The requirement to remove obstacles to orderly resolution flows from the resolvability framework in Articles 15 to 17. Internationally, the Financial Stability Board's 2017 guidance on continuity of access to FMIs for firms in resolution provides detailed, though non-binding, expectations that authorities and FMIs draw on.
Practical relevance
In resolution planning, banks are expected to map which FMIs support their critical functions, whether access is direct or intermediated, and what contingency exists if an intermediary withdraws. FMIs, for their part, are expected to have transparent rules on how they treat a participant in resolution. For investors and analysts, unmanaged FMI dependence is a potential impediment to resolvability that can turn a solvable-on-paper firm into one whose critical functions cannot be sustained. Because much of the framework rests on guidance and on individual FMI rulebooks rather than a single article, the strength of continuity arrangements varies case by case.