The European Banking Authority (EBA) has published the official EU language versions of the following guidelines under the Bank Recovery and Resolution Directive (BRRD):
- guidelines on the rate of conversion of debt to equity in bail-in. These guidelines clarify when and how different conversion rates from debt to equity should be set for different types of liability;
- guidelines on the treatment of shareholders in bail-in or the write-down and conversion of capital instruments. The guidelines clarify the circumstances which should guide the choice between cancellation and severe dilution of existing shares when applying the bail-in tool or the write down or conversion of capital instruments power provided by the BRRD; and
- guidelines concerning the interrelationship between the BRRD sequence of write-down and conversion and the Capital Requirements Regulation/Capital Requirements Directive IV. These guidelines clarify the interrelationship between the sequence in which liabilities should be written down or converted when the bail-in power introduced by the BRRD is used, and the hierarchy of capital instruments in the CRR.
The guidelines apply six months after their publication in all official EU languages. The deadline for Member State competent authorities to notify the EBA as to whether they comply or intend to comply with the guidelines is 11 September 2017.
View EBA final guidelines on the rate of conversion of debt to equity in bail-in, 11 July 2017