[ParlTrack]

Proposal for a directive
Recital 5

(5) Member States should ensure that ~~institution~~systemically important institutions classified as G-SIIs and O-SIIs have sufficient loss absorbing and recapitalisation capacity to ensure smooth and fast absorption of losses and recapitalisation in resolution with a minimum impact on financial stability and taxpayers. That should be achieved through compliance by those institutions with an institution-specific minimum requirement for own funds and eligible liabilities ('MREL') as provided in Directive 2014/59/EU.

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Recital 10 a (new)

(10 a) The current resolution framework is still inadequate to ensure resolvability of large institutions. The largest and most complex institutions in the Union still remain too big-to-fail, too-big-to-save and too complex to supervise and resolve. Therefore, it is essential that resolution plans also include a plan for implementing a structural separation of trading activities from the core credit function, so as to ensure resolvability and protect tax payers and small savers.

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Recital 11

(11) When setting the level of MREL, resolution authorities should consider the degree of systemic relevance of an institution and ~~the potential adverse impact of its failure on the~~its exposure to illiquid assets and derivatives, which may pose a significant threat to financial stability. They should take into account the need for a level playing field between G- SIIs and other comparable institutions with systemic relevance within the Union. Thus MREL of institutions that are not identified as G-SIIs but the systemic relevance within the Union of which is comparable to the systemic relevance of G-SIIs should not diverge disproportionately from the level and composition of MREL generally set for G-SIIs..

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Recital 19

(19) In order to preserve financial stability, it is important that competent authorities are able to remedy the deterioration of an institution’s financial and economic situation before that institution reaches a point at which authorities have no other alternative than to resolve it. To that end, competent authorities should be granted appropriate early intervention powers. Early intervention powers should include the power to suspend, for the minimum time necessary, certain contractual obligations. That power to suspend should be framed accurately and should be exercised only where that is necessary to establish whether early intervention measures are needed or to determine whether the institution is failing or likely to fail. That power to suspend should however not apply to obligations in relation to the participation in systems designated under Directive 98/26/EC of the European Parliament and of the Council18 , central counterparties (CCPs) and central banks including third country CCPs recognised by the European Capital Markets Authority ('ESMA'). It should also not apply to covered deposits. Early intervention powers should comprise the powers already provided for in Directive 2013/36/EU for circumstances other than those considered to be early intervention as well as for situations in which it is considered to be necessary to restore the financial soundness of an institution. __________________ 18 Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166, 11.6.1998, p. 45).deleted

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Recital 19 a (new)

(19 a) Considering the disruptive impact on small investors and savers of the first application of the resolution tools, there is a need to revise the requirement for a minimum contribution for loss absorption and recapitalisation so as to ensure that bank losses are borne only by those investors that have sufficient loss-bearing capacity and can exert real market discipline on banks. The protection of retail savers and investors is essential to avoid adverse effects on socio-economic stability and preserve the general confidence in the banking sector.

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 4 a (new)

Directive 2014/59/EU
Article 5 – paragraph 1 a (new)

4 a. In Article 5 the following paragraph (1a) is added: “1a. By way of derogation from paragraph 1, a recovery plan is not mandatory for small and non-complex institutions as defined in article 430a of Regulation (EU) No 575/2013 that would not have an adverse impact on financial stability due to their small size, limited interconnectedness and low complexity.”

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 4 b (new)

Directive 2014/59/EU
Article 5 – paragraph 4 a (new)

4 b. In Article 5 a new paragraph (4a) is added: “4 a. Recovery plans shall also include a demonstration on how the institution will effect the structural separation of trading and investment banking activities from the core credit institution. The recovery plan shall explain in detail how the separation will be carried out and contain a specification of assets and activity that will be separated from the core credit institution.”

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 4 c (new)

Directive 2014/59/EU
Article 6 – paragraph 6 – point c a (new)

4 c. In Article 6(6), the following point (c a) is added: “(c a) require the institution to separate its core credit function from its trading activities, so as to ensure that the latter could be wound down without affecting the conduct of the retail business and without the need to rely on the injection of public funds;”

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 4 d (new)

Directive 2013/59/EU
Article 10 – paragraph 7 – point c

(c) a demonstration of how critical functions and core business lines could be legally and economically separated, to the extent necessary, from other functions so as to ensure continuity upon the failure of the institution; (http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0059&from=EN)4 d. In Article 10(7), point (c) is replaced by the following: "(c) a demonstration of how the retail banking activities could be legally and economically separated from trading activities, and how the latter could be wound down, in a manner that does not affect the conduct of retail business nor impose losses on depositors or taxpayers;" Or. en

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 13

Where a substantive impediment to resolvability is due to a situation referred to in Article 141a(2) of Directive 2013/36/EU the institution shall, within ~~two~~four weeks of the date of receipt of a notification made in accordance with paragraph 1, propose to the resolution authority possible measures to ensure that the institution complies with Articles 45f or 45g and the requirement referred to in Article 128(6) of Directive 2013/36/EU. The four weeks deadline may be extended by the resolution authority in consultation with the competent authority on a case-by-case basis.

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 13 b (new)

Directive 2014/59/EU
Article 17 – paragraph 5 – introductory part

5. For the purposes of paragraph 4, resolution authorities shall have the power to take any of the following measures: (http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0059&from=EN)13 b. In Article 17(5), the introductory part is replaced by the following: "5. For the purposes of paragraph 4, resolution authorities shall require an institution or a parent undertaking to segregate its trading and investment banking activities from the deposit taking activities and allocate them into a separated legal entity. In addition, they shall have the power to take any of the following measures:" Or. en

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 18 b (new)

Directive 2014/59/EU
Article 28 – paragraph 1

18 b. In Article 28 , paragraph 1 is replaced by the following: Where there is a significant deterioration in the financial situation of an institution or where there are serious infringements of law, of regulations or of the statutes of the institution, or serious administrative irregularities, and other measures taken in accordance with Article 27 are not sufficient to reverse that deterioration, ~~Member States shall ensure that~~ competent authorities ~~may~~shall require the removal of the senior management or management body of the institution, in its entirety or with regard to individuals. The appointment of the new senior management or management body shall be done in accordance with national and Union law and be subject to the approval or consent of the competent authority. ~~(http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0059&from=EN)~~" Or. en

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 19

Directive 2014/59/EU
Article 29a

19. The following Article 29a is inserted: Power to suspend certain obligations. 1. their respective competent authority, after having consulted the resolution authority, can exercise the power referred to in point (i) of Article 27 (1) only where the exercise of the suspension power is necessary to carry out the assessment provided for in the first sentence of Article 27(1) or to make the determination provided for in point (a) of Article 32(1). 2. paragraph 1 shall not exceed the minimum period of time that the competent authority considers necessary to carry out the assessment referred to in point (a) of Article 27(1) or to make the determination referred to in point (a) of Article 32(1) and shall in any event not exceed 5 working days. 3. paragraph 1 shall not apply to: (a) owed to systems or operators of systems that have been designated in accordance with Directive 98/26/EC, CCPs and third country CCPs recognised by ESMA pursuant to Article 25 of Regulation (EU) No 648/2012 and to central banks; (b) Directive 97/9/EC; (c) 4. this Article, competent authorities shall have regard to the impact the exercise of that power might have on the orderly functioning of financial markets. 5. that would have been due during the suspension period shall be due immediately upon expiry of that period. 6. obligations under a contract are suspended pursuant to paragraph 1, the payment or delivery obligations of the entity's counterparties under that contract shall be suspended for the same period of time. 7. competent authorities notify the resolution authorities about the exercise of any power referred to in paragraph 1 without delay. 8. the option laid down in Article 32 (2) shall ensure that the suspension power referred to in paragraph 1 of this Article can also be exercised by the resolution authority, after having consulted the competent authority, where the exercise of that suspension power is necessary to make the determination provided for in point (a) of Article 32(1).’deleted ‘Article 29a Member States shall establish that The suspension referred to in Any suspension pursuant to payment and delivery obligations eligible claims for the purpose of covered deposits. When exercising a power under A payment or delivery obligation When payment or delivery Member States shall ensure that Member States that make use of

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 21 c (new)

Directive 2014/59/EU
Article 37 – paragraph 10

~~10. In the very extraordinary situation of a systemic crisi~~21 c. In Article 37, paragraph (10) is replaced by the following: "10. In the very extraordinary situation of a systemic crisis which may cause a disruption of the national or the regional economy and have a material negative impact on depositors, creditors and other stakeholders, the resolution authority may seek funding from alternative financing sources through the use of government stabilisation tools provided for in Articles 56 to 58, when ~~the following conditions are met: (a) and recapitalisation equal to an amount not~~a contribution to leoss ~~than 8 % of total liabilities including own funds of the institution under resolution, measured at the time of resolution action in accordance with the valuation provided for in Article 36,~~absorption and recapitalisation has been made by the shareholders and the holders of other instruments of ownership, the holders of relevant capital instruments and other eligible liabilities held by professional investors through write down, or conversion ~~or otherwise; (b) final approval under the Union State aid framework. (http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0059&from=EN)~~. a contribution to loss absorption it shall be conditional on prior and Or. en

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 21 d (new)

Directive 2014/59/EU
Article 44 – paragraph 2 – subparagraph 1 – point a a (new)

21 d. In Article 44(2), the following point (aa) is inserted: “(aa) deposits from natural persons and micro, small and medium-sized enterprises which exceeds the coverage level referred to in Article 6 of Directive 2014/49/EU;”

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 21 e (new)

Directive 2014/59
Article 44 – paragraph 2 – subparagraph 1 – point a b (new)

21 e. In Article 44(2), the following point (ab) is inserted: “(ab) all liabilities existing at 31 December 2015;”

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 21 f (new)

Directive 2014/59
Article 44 – paragraph 2 – subparagraph 1 – point b a (new)

21 f. In Article 44(2), the following point (ba) is inserted: “(ba) senior liabilities which are not classified as non-preferred senior debt;”

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 21 g (new)

Directive 2014/59/EU
Article 44 – paragraph 2 – subparagraph 1 – point b b (new)

21 g. In Article 44(2), the following point (bb) is inserted: “(bb) liabilities held by retail investors;”

2018/01/29
Committee: ECON

Marco VALLI

Proposal for a directive
Article 1 – paragraph 22 c (new)

Directive 2014/59/EU
Article 44 – paragraph 5 – point a

(a) a contribution to loss absorption and recapitalisation equal to an amount not less than 8 % of the total liabilities including own funds of the institution under resolution, measured at the time of resolution action in accordance with the valuation provided for in Article 36, has been made by the shareholders and the holders of other instruments of ownership, the holders of relevant capital instruments and other eligible liabilities through write down, conversion or otherwise; and (http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0059&from=EN)22 c. In Article 44(5), point (a) is replaced by the following: "(a) a contribution to loss absorption and recapitalisation has been made by the shareholders and the holders of other instruments of ownership, the holders of relevant capital instruments and other eligible liabilities of the institution under resolution, measured at the time of resolution action in accordance with the valuation provided for in Article 36, through write down or conversion;" Or. en

2018/01/29
Committee: ECON

Marco VALLI