The proposed methodology would align the target level basis with the reference base used for the calculation of individual contributions to national resolution financing arrangements.
Based on the qualitative and quantitative assessment of various criteria, including historical data, the European Banking Authority (EBA) report recommends that measures based on total liabilities, and ‘total liabilities excluding own funds less covered deposits' in particular, are the most appropriate target level basis for resolution financing arrangements.
The main reasons for such a recommendation are that this basis is consistent with the regulatory framework and calculation methodology for the individual contributions, and is simple and transparent.
The report further recommends that if the European Commission issues a legislative proposal on amending the target level basis for national resolution financing arrangements it should consider adjusting the percentage of the target level, and whether a corresponding change to the target level basis would also be appropriate for the Single Resolution Fund.
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