On 29 September 2020, there was published in the Official Journal of the EU a Commission Notice relating to the interpretation of certain legal provisions of the revised bank resolution framework in reply to questions raised by Member States competent authorities (NCAs).

The Commission Notice answers certain questions that NCAs have raised on the:

  • Bank Recovery and Resolution Directive, as amended by Directive (EU) 2019/879 (BRRD).
  • Single Resolution Mechanism Regulation, as amended by Regulation (EU) 2019/877 (SRMR).
  • Capital Requirements Regulation, as amended by Regulation (EU) 2019/876 (CRR).
  • Capital Requirements Directive IV, as amended by Directive (EU) 2019/878 (CRD IV).

Specifically, the Commission Notice covers the following issues:

  • The power to prohibit certain distributions.
  • Powers to suspend payment or delivery obligations.
  • Selling of subordinated eligible liabilities to retail clients.
  • Minimum requirement for own funds and eligible liabilities.
  • Bail-in tool.
  • Contractual recognition of bail-in.
  • Write down or conversion of capital instruments and eligible liabilities.
  • Exclusion of certain contractual terms in early intervention and resolution.
  • Contractual recognition of resolution stay powers.

Leave a Reply

Your email address will not be published. Required fields are marked *