Finance
ECB changes guidelines to allow lending to failing banks during resolution
Published by Global Banking and Finance Review
Posted on January 27, 2026
1 min readLast updated: January 27, 2026
Quick Summary
The ECB has updated its guidelines to allow lending to banks in resolution, addressing gaps in the EU's framework for bank failures.
ECB Revises Guidelines to Facilitate Lending to Failing Banks
ECB's New Lending Guidelines
FRANKFURT, Jan 27 (Reuters) - The European Central Bank said on Tuesday it was changing guidelines to allow it to lend to banks that are being wound down, tackling a long-standing issue in the European Union's framework for handling bank failures.
Conditions for Lending
The ECB said banks that are in resolution would now be given access to the central bank's liquidity provision "provided they meet certain conditions", such as having enough capital.
Background on Resolution Framework
A 2017 run on Spain's Banco Popular exposed a hole in EU rules that bar the ECB, the euro zone's central bank, from supporting a failing lender while the EU's Single Resolution Board organises a rescue.
It was one of just two cases in which the EU's decade-old resolution framework has been applied, the other being the resolution of some European units of Russia's Sberbank following sanctions against Russia in 2022.
(Reporting by Francesco CanepaEditing by Peter Graff)
Key Takeaways
- •ECB changes guidelines to lend to banks in resolution.
- •New rules address gaps in EU's bank failure framework.
- •Banks must meet conditions like sufficient capital.
- •Banco Popular case highlighted previous rule limitations.
- •Sberbank's resolution was another key case.
Frequently Asked Questions about ECB changes guidelines to allow lending to failing banks during resolution
1What is the European Central Bank?
The European Central Bank (ECB) is the central bank for the eurozone, responsible for monetary policy and maintaining price stability in the European Union.
2What is liquidity provision?
Liquidity provision refers to the process by which a central bank supplies funds to financial institutions to ensure they have enough cash to meet their obligations.
