Assessment of the resolvability of institutions

(1) The resolution authority assesses the extent to which an institution that is not part of a group subject to supervision on a consolidated basis is resolvable. In its assessment, the resolution authority coordinates with the supervisory authority and with the resolution authorities of the Member States and third countries in which significant branches are located, insofar as the interests of those significant branches are affected.
(2) An institution is resolvable where, in the view of the resolution authority, it is feasible and credible either to wind the institution up under normal insolvency proceedings, or to resolve it by applying resolution tools and exercising resolution powers, in a manner that 1. avoids, as far as possible, any significant adverse effect on the financial systems of the Federal Republic of Germany, the other Member States, or the Union as a whole, including in circumstances of broader financial instability or system-wide events, 2. ensures the continuity of critical functions, where the institution's business includes such critical functions, and 3. separates critical functions and core business lines from other functions to the extent necessary, both legally and economically.
(3) For the purposes of assessing resolvability under subsections (1) and (2), the resolution authority examines at least the matters set out in Section C of the Annex to Directive 2014/59/EU.
(4) The resolution authority assesses resolvability under this provision at the same time as, and for the purposes of, preparing and updating the resolution plan under section 40.
(5) Where the resolution authority reaches a negative assessment in the course of assessing an institution's resolvability, it informs the European Banking Authority accordingly and in full.
(6) Section 42 applies correspondingly.