CNB may only take a resolution action in relation to an institution if all the following conditions are met:
- the institution is failing or likely to fail (i.e. can reasonably be expected to fail),
- there is no reasonable prospect that any supervisory action (e.g. removal of the management body or senior management, required implementation of one or more measures set out in the recovery plan) or private sector measures would prevent the failure in a reasonable timeframe, and
- resolution action is necessary in the public interest.
To resolve an institution, the CNB may use one of the tools or powers available under the Recovery and Resolution Act, or a combination thereof (information on the use of resolution tools pursuant to Article 176(1) of the Recovery and Resolution Act). The chosen resolution strategy and the subsequent application of the selected resolution tools and powers should result in achievement of the resolution objectives with minimum use of public funds.