[ParlTrack]

Martin SCHIRDEWAN

(7) Eligibility criteria for liabilities for the MREL should be closely aligned with those laid down in Regulation (EU) No 575/2013 for the TLAC minimum requirement, in line with the complementary adjustments and requirements introduced in this Regulation. In particular, certain debt instruments with an embedded derivative component, such as certain structured notes, should be eligible to meet the MREL to the extent that they have a fixed principal amount repayable at maturity while only an additional return is linked to a derivative and depends on the performance of a reference asset. In view of their fixed principal amount, those instruments should be highly loss- absorbing and easily bail-inable in resolution. Eligible liabilities should be clearly subordinated to other liabilities in order to avoid any "no creditor worse off" issues.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Recital 8

(8) The scope of liabilities to meet the MREL includes, in principle, all liabilities resulting from claims arising from unsecured non-preferred creditors (non- subordinated liabilities) unless they do not meet specific eligibility criteria provided in this Regulation. To enhance the resolvability of institutions through an effective use of the bail-in tool, the Board should ~~be able to~~ require that the firm- specific requirement is met with subordinated liabilities, in particular when there are clear indications that bailed-in creditors are likely to bear losses in resolution that would exceed their potential losses in insolvency. The requirement to meet MREL with subordinated liabilities should be requested only for a level necessary to prevent that losses of creditors in resolution are above losses that they would otherwise incur under insolvency. Any subordination of debt instruments requested by the Board for the MREL should be without prejudice to the possibility to partly meet the TLAC minimum requirement with non- subordinated debt instruments in accordance with Regulation (EU) No 575/2013 as permitted by the TLAC standard.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Recital 10

(10) To enhance their resolvability, the Board should be able to impose an institution-specific MREL on G-SIIs in addition to the TLAC minimum requirement provided in Regulation (EU) No 575/2013~~. That institution-specific MREL may only be imposed where the TLAC minimum requirement is not sufficient to absorb losses and recapitalise a G-SII under the chosen resolution strateg~~ when deemed necessary.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Recital 11

(11) When setting the level of MREL, the Board should consider the degree of systemic relevance of an institution and the potential adverse impact of its failure on the financial stability. The Board should take into account the need for a level playing field between G-SIIs and other comparable institutions with systemic relevance within the participating Member States. Thus MREL of institutions that are not identified as G-SIIs but the systemic relevance within participating Member States 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. and may also exceed that level.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Recital 12

(12) Similarly to powers conferred to competent authorities by Directive 2013/36/EU, the Board should be allowed to impose higher levels of MREL while addressing in a more flexible manner any breaches of those levels, in particular by alleviating the automatic effects of those breaches in the form of limitations to the Maximum Distributable Amounts ('MDAs'). The Board should be able to give guidance to institutions to meet additional amounts to cover losses in resolution that are above the level of the own funds requirements laid down in Regulation (EU) No 575/2013 and Directive 2013/36/EU, and/or to ensure sufficient market confidence in the institution post-resolution. To ensure consistency Directive 2013/36/EU, guidance to cover additional losses may only be given where the 'capital guidance' has been requested by the competent supervisory authorities in accordance with Directive 2013/36/EU and should not exceed the level requested in that guidance. For the recapitalisation amount, the level requested in the guidance to ensure market confidence should enable the institution to continue to meet the conditions for authorisation for an appropriate period of time including by allowing the institution to cover the costs related to the restructuring of its activities following resolution. The market confidence buffer should not exceed the combined capital buffer requirement under Directive 2013/36/EU unless a higher level is necessary to ensure that, following the event of resolution, the entity continues to meet the conditions for its authorisation for an appropriate period. Where an entity consistently fails to have additional own funds and eligible liabilities as expected under the guidance, the Board should be able to require that the amount of the MREL be increased to cover the amount of the guidance. For the purposes of considering whether there is a consistent failure, the Board should take into account the entity's reporting on the MREL as required by Directive 2014/59/EUen deemed necessary for resolution.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Recital 14

(14) Institutions that are not resolution entities should comply with the firm- specific requirement at individual level. Loss absorption and recapitalisation needs of those institutions should be generally provided by their respective resolution entities through the acquisition by resolution entities of eligible liabilities issued by those institutions and their write- down or conversion into instruments of ownership when those institutions are no longer viable. As such, the MREL applicable to institutions that are not resolution entities should be applied together and consistently with the requirements applicable to resolution entities. That should allow the Board to resolve a resolution group without placing certain of its subsidiary entities in resolution, thus avoiding potentially disruptive effects on the market. Subject to the agreement of the Board, it should be possible to replace the issuance of eligible liabilities to resolution entities with collateralised guarantees between the resolution entity and its subsidiaries, that can be triggered when the timing conditions equivalent to those allowing the write down or conversion of eligible liabilities are met. The collateral backing the guarantee should be highly liquid and have minimal market and credit risk. The Board should also be able to fully waive the application of the MREL applicable to institutions that are not resolution entities if both the resolution entity and its subsidiaries are established in the same participating Member State.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 c – paragraph 1

1. Eligible liabilities shall be included in the amount of own funds and eligible liabilities of resolution entities only where they satisfy the conditions referred to in 72a(2)~~, except for point (d) of Article 72b(2)~~ of Regulation (EU) No 575/2013.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 c – paragraph 2

2. By way of derogation from point (l) of Article 72a(2) of Regulation (EU) No 575/2013, liabilities that arise from debt instruments with derivative features, such as structured notes, shall be included in the amount of own funds and eligible liabilities only where all of the following conditions are met: (a) arising from the debt instrument is known in advance at the time of issuance, is fixed and not affected by a derivative feature; (b) derivative feature, is not subject to any netting agreement and its valuation is not subject to Article 49(3); (c) subparagraph shall only be included in the amount of own funds and eligible liabilities for the part that corresponds with the amount referred to in point (a) of the first subparagraph.deleted a given amount of the liability the debt instrument, including its The liability referred to in the first

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 c – paragraph 3 – subparagraph 1

The Board, on its own initiative after consulting the national resolution authority or upon proposal by a national resolution authority, ~~may decid~~shall ensure that the requirement referred to in Article 12g is met by resolution entities with instruments that meet all conditions referred to in Article 72a of Regulation (EU) No 575/2013 with a view to ensure that the resolution entity can be resolved in a manner suitable to meet the resolution objectives.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 c – paragraph 3 – subparagraph 2

The Board's decision under this paragraph shall contain the reasons for that decision on the basis of the following elements: (a) referred to in the paragraph (1) and (2) have the same priority ranking in the national insolvency hierarchy as certain liabilities excluded from the application of the write-down or conversion powers in accordance with Article 44(2) or Article 44(3) of Directive 2014/59/EU ; (b) application of write-down and conversion powers to non-subordinated liabilities that are not excluded from the application of the write-down or conversion powers in accordance with Article 44(2) or Article 44(3) of Directive 2014/59/EU, creditors of claims arising from those liabilities incur greater losses than they would incur in a winding up under normal insolvency proceedings; (c) liabilities shall not exceed the amount necessary to ensure that creditors referred to in point (b) shall not incur losses above the level of losses that they would otherwise have incurred in a winding up under normal insolvency proceedings.deleted non-subordinated liabilities as a result of a planned the amount of subordinated

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 d – paragraph 3 – subparagraph 1 – introductory part

~~Without prejudice~~The resolution authority shall set the recapitalisation amounts referred to in the ~~last~~previous subparagraph~~, for resolution entities, the amount referred to in paragraph 2 shall not exceed~~s in accordance with the resolution actions foreseen in the resolution plan and may adjust those recapitalisation amounts to adequately reflect risks that affect resolvability arising from the gre~~ater of the following:~~solution group’s business model, funding profile and overall risk profile.

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 d – paragraph 3 – subparagraph 1 – point a

(a) the sum of: (i) to be absorbed in resolution that corresponds to the requirements referred to in Article 92(1)(a),(b) and (c) of Regulation (EU) No 575/2013 and Article 104a of Directive 2013/36/EU of the resolution entity at sub-consolidated resolution group level, (ii) allows the resolution group resulting from resolution to restore its total capital ratio referred in Article 92(1)(c) of Regulation (EU) No 575/2013 and its requirement referred to in Article 104a of Directive 2013/36/EU at resolution group sub- consolidated level in accordance with the resolution actions foreseen in the resolution plan;deleted the amount of losses that may need a recapitalisation amount that

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 d – paragraph 3 – subparagraph 1 – point b

(b) the sum of: (i) absorbed in resolution that corresponds to the resolution entity's leverage ratio requirement referred to in Article 92(1)(d) of Regulation (EU) No 575/2013 at resolution group sub-consolidated level; and (ii) allows the resolution group resulting from resolution to restore the leverage ratio referred to in Article 92(1)(d) of Regulation (EU) No 575/2013 at resolution group sub-consolidated level in accordance with the resolution actions foreseen in the resolution plan;deleted the amount of losses to be a recapitalisation amount that

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

The Board shall set the recapitalisation amounts referred to in the previous subparagraphs in accordance with the resolution actions foreseen in the resolution plan and may adjust those recapitalisation amounts to adequately reflect risks that affect resolvability arising from the resolution group’s business model, funding profile and overall risk profile.deleted

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 d – paragraph 4 – subparagraph 1

Without prejudice to the last subparagraph, for entities that are not themselves resolution entities, the amount referred to in paragraph 2 shall not exceed any of the following: (a) (i) absorbed in resolution that corresponds to the requirements referred to in Article 92(1)(a),(b) and (c) of Regulation (EU) No 575/2013 and Article 104a of Directive 2013/36/EU of the entity, and (ii) allows the entity to restore its total capital ratio referred in Article 92(1)(c) of Regulation (EU) No 575/2013 and its requirement referred to in Article 104a of Directive 2013/36/EU in accordance with the resolution plan; or (b) (i) absorbed in resolution that corresponds to the entity's leverage ratio requirement referred to in Article 92(1)(d) of Regulation (EU) No 575/2013; and (ii) allows the entity to restore its leverage ratio referred to in Article 92(1)(d) of Regulation (EU) No 575/2013 in accordance with the resolution plan.deleted the sum of: the amount of losses to be a recapitalisation amount that the sum of: the amount of losses to be a recapitalisation amount that

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5 Regulation (EU) No 806/2014

2. The Board may impose an additional requirement for own funds and eligible liabilities referred to in point (b) of paragraph 1 only : (a) in point (a) of paragraph 1 is not sufficient to fulfil the conditions set out in Article 12d; and (b) required own funds and eligible liabilities does not exceed a level that is necessary to fulfil the conditions of Article 12d.deleted where the requirement referred to to an extent that the amount of

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 f

Article 12f Guidance for the minimum requirement for own funds and eligible liabilities 1. an entity to have own funds and eligible liabilities that fulfil the conditions of Article 12c and Article 12h(3) in excess of the levels set out in Article 12d and Article 12e for amounts for the following purposes: (a) of the entity to those covered in Article 12d, and/or (b) resolution, a sufficient market confidence in the entity is sustained through capital instruments in addition to the requirement in point (b) of Article 12d(2) ('market confidence buffer'). The guidance shall be only provided and calculated with respect to the requirement referred to in Article 12a(1) calculated in accordance with point (a) of Article 12a(2). 2. The amount of the guidance given in accordance with point (a) of paragraph 1 may be set only where the competent authority has already set its own guidance in accordance with Article 104b of Directive 2013/36/EU and shall not exceed the level of that guidance. The amount of guidance given in accordance with point (b) of paragraph 1 shall not exceed the amount of the combined buffer requirement referred to in point (6) of Article 128 of Directive 2013/36/EU, except for the requirement referred to in point (a) of that provision unless a higher level is necessarydeleted The Board may give guidance to to cover potential additional losses to ensure that, ~~follow~~ing the event of resolution, the entity continues to meet the conditions for its authorisation for an appropriate period of time that is not longer than one year. The resolution authority shall provide to the entity the reasons and a full assessment for the need and the level of the guidance given in accordance with this Article. 3. to have additional own funds and eligible liabilities as expected under the guidance referred to in the first paragraph, the Board may require that the amount of the requirement referred to in Article 12d(2) be increased to cover the guidance given pursuant to this Article. 4. additional own funds and eligible liabilities as expected under the guidance referred to in the first paragraph shall not be subject to the restrictions referred to in Article 141 of Directive 2013/36/EU.Where an entity consistently fails An entity that fails to have

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 f – paragraph 1 – subparagraph 1

The Board may give guidance to an entity to have own funds and eligible liabilities that fulfil the conditions of Article 12c and Article 12h(3) in excess of the levels set out in Article 12d and Article 12e for amounts for the following purposes: (a) of the entity to those covered in Article 12d, and/or (b) resolution, a sufficient market confidence in the entity is sustained through capital instruments in addition to the requirement in point (b) of Article 12d(2) ('market confidence buffer').deleted to cover potential additional losses to ensure that, in the event of

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5 Regulation (EU) No 806/2014

~~The guidance shall be only provided and calculated with respect to the requirement referred to in Article 12a(1) calculated in accordance with point (a) of Article 12a(2).~~deleted

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 f – paragraph 2

2. The amount of the guidance given in accordance with point (a) of paragraph 1 may be set only where the competent authority has already set its own guidance in accordance with Article 104b of Directive 2013/36/EU and shall not exceed the level of that guidance. The amount of guidance given in accordance with point (b) of paragraph 1 shall not exceed the amount of the combined buffer requirement referred to in point (6) of Article 128 of Directive 2013/36/EU, except for the requirement referred to in point (a) of that provision unless a higher level is necessary to ensure that, following the event of resolution, the entity continues to meet the conditions for its authorisation for an appropriate period of time that is not longer than one year. The resolution authority shall provide to the entity the reasons and a full assessment for the need and the level of the guidance given in accordance with this Article.deleted

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 f – paragraph 3

3. Where an entity consistently fails to have additional own funds and eligible liabilities as expected under the guidance referred to in the first paragraph, the Board may require that the amount of the requirement referred to in Article 12d(2) be increased to cover the guidance given pursuant to this Article.deleted

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 f – paragraph 4

4. An entity that fails to have additional own funds and eligible liabilities as expected under the guidance referred to in the first paragraph shall not be subject to the restrictions referred to in Article 141 of Directive 2013/36/EU.deleted

2018/02/01
Committee: ECON

Martin SCHIRDEWAN

Proposal for a regulation
Article 1 – paragraph 5

Regulation (EU) No 806/2014
Article 12 h – paragraph 4

4. Subject to the agreement of the Board, the requirement referred to in Article 12a(1) may be met with a guarantee of the resolution entity granted to its subsidiary, which fulfils the following conditions: (a) least the equivalent amount as the amount of the requirement for which it substitutes; (b) the subsidiary is unable to pay its debts or other liabilities as they fall due or a determination has been made in accordance with Article 21(3) in respect of the subsidiary, whichever is the earliest; (c) through a financial collateral arrangement as defined in point (a) of Article 2(1) of Directive 2002/47/EC for at least 50 per cent of its amount; (d) collateral arrangement are governed by the laws of the Member State where the subsidiary is established unless otherwise specified by the Board; (e) guarantee fulfils the requirements of Article 197 of Regulation (EU) No 575/2013, which, following appropriately conservative haircuts, is sufficient to fully cover the amount guaranteed; (f) guarantee is unencumbered and in particular is not used asdeleted the guarantee is provided for at the guarantee is triggered when the guarantee is collateralised the guarantee and financial the collateral to back any other guarantee; (g) maturity that fulfils the same maturity condition as that referred to in Article 72c(1) of Regulation (EU) No 575/2013; and (h) operational barriers to the transfer of the collateral from the resolution entity to the relevant subsidiary, including when resolution action is taken in respect of the resolution entity.ing the the collateral backing the the collateral has an effective there are no legal, regulatory or

2018/02/01
Committee: ECON

23 Amendments of Martin SCHIRDEWAN related to 2016/0361(COD)

ParlTrack - 2011-2024