Guidance on Identification of Critical Functions and Critical Shared Services
A strategic analysis of the firm's essential and systemically important functions is necessary for resolution planning and for assessing resolvability. It should help ensure that the resolution strategy and operational plan include appropriate actions that help maintain continuity of these functions while avoiding unnecessary destruction of value and minimising, where possible, the costs of resolution to home and host authorities and losses to creditors. This guidance should assist authorities and CMGs in their evaluation of the criticality of functions that firms provide to the real economy and financial markets. It aims to promote a common understanding of which functions and shared services are critical by providing shared definitions and evaluation criteria. The guidance covers the functions and services provided by banks and therefore does not cover functions provided by insurance firms or financial market infrastructures (FMIs), though some elements of this guidance paper may be relevant to other sectors.