Recital (15)

It is necessary to ensure timely action and early coordination between the Board and the ECB, or the relevant national competent authority, with respect to less significant cross-border groups while an entity is still a going concern but there is a material risk that the entity might fail. The ECB or the relevant national competent authority should therefore notify the Board as early as possible of such a risk. That notification should contain the reasons for the assessment of the ECB or of the relevant national competent authority and a non-exhaustive overview of the alternative private sector measures, supervisory action or early intervention measures that are available to prevent the failure of the entity within a reasonable timeframe. Such early notification does not affect any alternative private sector measures, including measures by an IPS, that would prevent the failure or the likely failure of the entity within a reasonable timeframe or prejudice the procedures to determine whether the conditions for resolution are met. The prior notification by the ECB or by the relevant national competent authority to the Board of a material risk that an entity is failing or is likely to fail or the end of the specified timeframe for the implementation of the measures to address such material risk should not be a condition for, or otherwise necessarily imply, a subsequent determination that an entity is failing or is likely to fail. Moreover, if at a later stage the entity is assessed to be failing or likely to fail and there are no alternative solutions to prevent such failure within a reasonable timeframe, the Board has to take a decision on whether to take resolution action. In such a case, the timeliness of the decision to apply resolution action to the entity can be fundamental to the successful implementation of the resolution strategy, in particular because an earlier intervention in the entity can contribute to ensuring sufficient levels of loss absorption capacity and liquidity to execute that strategy. It is therefore appropriate to enable the Board to assess, in close cooperation with the ECB or the relevant national competent authority, what constitutes a reasonable timeframe to implement alternative measures to avoid the failure of the entity. To ensure a timely outcome and to enable the Board to prepare properly for the potential resolution of an entity, the Board and the ECB, or the relevant national competent authority, should meet regularly, and the Board should decide on the frequency of those meetings, having regard to the circumstances of the case.