In that sense, central banks and resolution authorities have a common interest in resolving banks in a timely manner, i.e. before asset encumbrance reaches uncomfortably high levels and collateral runs out. In short, don’t forget about funding in resolution. Sources of funding – including private ones – should be identified and prepared in tranquil times and quantified conservatively.
Asset encumbrance should be closely monitored and timely intervention may be required to assure sufficient funding in resolution. Let me briefly restate my main points. I gave my perspective as a central banker on the importance of resolution and the limits of monetary policy.