BETA

Activities of Sharon BOWLES related to 2013/0253(COD)

Plenary speeches (3)

2016/11/22
Dossiers: 2013/0253(COD)

2016/11/22
Dossiers: 2013/0253(COD)

2016/11/22
Dossiers: 2013/0253(COD)

Amendments (170)

Proposal for a regulation
Recital 10

(10) The sharing of resolution responsibilities between the national and the Union levels should be aligned to the sharing of supervision responsibilities between those levels. As long as supervision remains national in a Member State, that Member State should remain responsible for the financial consequences of a bank failure. The single resolution mechanism should therefore only extend to banks and financial institutions established in Member States participating in the SSM and subject to the supervision of the ECB within the framework of the SSM. Banks established in the Member States not participating in the SSM should not be subject to the single resolution mechanism. If such Member States became subject to the single resolution mechanism, this would creplicate the ~~wrong incentives for them. In particular, supervisors in these Member States may become more lenient towards banks in their jurisdic~~jurisdictional mismatch that this Regulations aims t~~hey would not have to bear the full financial risk of their failures~~o resolve for the SSM. Therefore, in order to ensure parallelism with the SSM, the single resolution mechanism should apply to Member States participating in the SSM. As Member States join the SSM, they should also automatically become subject to the single resolution mechanism. Ultimately, the single resolution mechanism is expected to extend to the entire internal market.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 15

(15) Within the single resolution mechanism, decisions should be taken at the most appropriate level. Accordingly, the Resolution Board of the Single Resolution Mechanism (hereinafter referred to as the 'Board') should be established to act as the single resolution authority.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 16

(16) The ECB, as the supervisor within the SSM, is the best placed to assess whether a credit institution is failing or likely to fail and whether there is no reasonable prospect that any alternative private sector or supervisory action would prevent its failure within a reasonable timeframe. The ~~Board, upon notification of~~refore the ECB, should provide a recommendation to the Commission. Given the need to balance the different interests at stake the Commission should decide whether or not to place an institution under resolution and should also decide on a clear and detailed resolution framework establishing the resolution actions to be taken bynotify the Board when it considers that an institution is failing or likely to fail. The Board, upon notification of the ECB, should formulate a resolution scheme based on the resolution plans, provisions under the B~~oard. Within this framework, the Board should decide on a resolution scheme~~ank Recovery and Resolution Directive [ ], and Commission rulings on State Aid, and instruct the national resolution authorities on the resolution tools and powers to be executed at national level.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 19

(19) In order to ensure a swift and effective decision making process in resolution, the Board should be a specific Union agency with a specific structure, corresponding to its specific tasks~~, and which departs from the model of all other agencies of the Union~~. Its composition should ensure that due account is taken of all relevant interests at stake in resolution procedures. The Board should operate in executive and plenary sessions. In its executive session, it should be composed of an Executive Director, a Deputy Executive Director, and representatives of the Commission and the ECB. Considering the missions of the Board, the Executive Director and Deputy Executive Director should be appointed by the Council on a proposal from the Commission and after ~~hearing~~approval by the European Parliament. When deliberating on the resolution of a bank or group established within a single participating Member State, the executive session of the Board should also convene and involve in the decision-making process the member appointed by the Member State concerned representing its national resolution authority. When deliberating on a cross- border group, the members appointed by the home and all host Member States concerned representing the relevant national resolution authorities should also be convened and involved in the decision- making process of the executive session of the Board. However, home authorities and host authorities should have a balanced influence on the decision~~, so host authorities should have jointly one single vo~~ that takes account of the respective size of undertakings in the Member State. Observers, including a representative of the ESM and of the Euro Group, may also be invited to attend the meetings of the Board.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 21

(21) The Board ~~and the Commission, where relevant,~~ should replace the national resolution authorities designated under Directive [ ] in respect of all aspects related to the resolution decision-making process that do not involve the provision of national funds. The national resolution authorities designated under Directive [ ] should continue to carry out activities related to the implementation of resolution schemes adopted by the Board. In order to ensure transparency and democratic control, as well as to safeguard the rights of the Union institutions, the Board should be accountable to the European Parliament and to the Council for any decisions taken on the basis of this proposal. For the same reasons of transparency and democratic control, national parliaments should have certain rights to obtain information about the activities of the Board and to engage in a dialogue with it.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 25

(25) The single resolution mechanism should be constructed on the frameworks of Directive [ ] and the SSM. Therefore, the Board should be ~~empower~~authorised to intervene at an early stage where the financial situation or the solvency of an institution is deteriorating. The information that the Board receives from the national resolution authorities or the ECB at this stage is instrumental in making a determination on the action it might take in order to prepare for the resolution of the institution concerned.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 27

(27) In order to minimise disruption to the financial market and to the economy, the resolution process should be accomplished in a short time. The Commission should, throughout the resolution procedure, have access to any information which it deems necessary to for the purposes of Stakte a~~n informed decision in the resolution process~~id rules and impact on the single market as a whole, including on any Member State or undertaking affected but not part of the SRM. Where the ~~Commission~~ECB decides to put an institution under resolution, the Board should immediately adopt a resolution scheme establishing the details of the resolution tools and powers to be applied, and the use of any financing arrangements.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 30

(30) When exercising resolution powers, ~~the Commission and~~ the Board should make sure that shareholders and creditors bear an appropriate share of the losses, that the managers are replaced or further special managers added, that the costs of the resolution of the institution are minimised, and that all creditors of an insolvent institution that are of the same class are treated in a similar manner.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 36

(36) The ~~Commission~~Board should provide the framework for the resolution action to be taken following the resolution plans of the entities concerned and depending on the circumstances of the case and should be able to designate for use all necessary resolution tools. Within that clear and precise framework, the Board should decide on the detailed resolution scheme. The relevant resolution tools should include the sale of business tool, the bridge institution tool, the bail-in tool and the asset separation tool, which are also provided for by Directive [ ]. The framework should also make it possible to assess whether the conditions for the write- down and conversion of capital instruments are met.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 37

(37) TIn accordance with the Bank Recovery and Resolution Directive [ ], the sale of business tool should enable the sale of the institution or parts of its business to one or more purchasers without the consent of shareholders.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 38

(38) TIn accordance with the Bank Recovery and Resolution Directive [ ], the asset separation tool should enable authorities to transfer under- performing or impaired assets to a separate vehicle. That tool should be used only in conjunction with other tools to prevent an undue competitive advantage for the failing institution.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 40

(40) IAs provided in the Bank Recovery and Resolution Directive [ ], in order to ensure the necessary flexibility to allocate losses to creditors in a range of circumstances, it is appropriate that the bail-in tool be applicable both where the objective is to resolve the failing institution as a going concern if there is a realistic prospect that the institution's viability may be restored, and where systemically important services are transferred to a bridge institution and the residual part of the institution ceases to operate and is wound up.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 41

(41) WAs provided in the Bank Recovery and Resolution Directive, where the bail- in tool is applied with the objective of restoring the capital of the failing institution to enable it to continue to operate as a going concern, resolution through bail-in should always be accompanied by the replacement of management and a subsequent restructuring of the institution and its activities in a way that addresses the reasons for its failure. That restructuring should be achieved through the implementation of a business reorganisation plan.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 42

(42) IAs provided in the Bank Recovery and Resolution Directive [ ], it is not appropriate to apply the bail- in tool to claims in so far as they are secured, collateralised or otherwise guaranteed. However, in order to ensure that the bail-in tool is effective and achieves its objectives, it should be possible to apply it to as wide a range of the unsecured liabilities of a failing institution as possible. Nevertheless, it is appropriate to exclude certain kinds of unsecured liability from the scope of application of the bail-in tool. For reasons of public policy and effective resolution, the bail-in tool should not apply to those deposits that are protected under Directive 94/19/EC of the European Parliament and of the Council15, to liabilities to employees of the failing institution or to commercial claims that relate to goods and services necessary for the daily functioning of the institution. __________________ 15 Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes. OJ L 135, 31.5.1994, p. 5–14.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 43

(43) DAs provided in the Bank Recovery and Resolution Directive [ ], depositors that hold deposits guaranteed by a deposit guarantee scheme should not be subject to the exercise of the bail-in tool. The deposit guarantee scheme, however, contributes to funding the resolution process to the extent that it would have had to indemnify the depositors. The exercise of the bail-in powers would ensure that depositors continue having access to their deposits which is the main reason why the deposit guarantee schemes have been established. Not providing for the involvement of those schemes in such cases would constitute an unfair advantage with respect to the other creditors which would be subject to the exercise of the powers by the resolution authority.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 46

(46) The best method of resolution should be chosen depending on the circumstances of the case, without discrimination to any participating or non-participating Member State or group of Member States, and for this purpose, all the resolution tools provided for by ~~Directive [ ] should be availabl~~the Bank Recovery and Resolution Directive [ ] should be available and applied in line with the provisions of that Directive.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 47

(47) Directive [ ] has conferred the power to write down and convert capital instruments on national resolution authorities, since the conditions for the write-down and conversion of capital instruments may coincide with the conditions for resolution and in such a case, an assessment is to be made of whether the sole write-down and conversion of the capital instruments is sufficient to restore the financial soundness of the entity concerned or it is also necessary to take resolution action. As a rule, it will be used in the context of resolution. The ~~Commission~~Board should replace national resolution authorities also in this function and should therefore be empowered to assess whether the conditions for the write-down and conversion of capital instruments are met and to decide whether to place an entity under resolution, if the requirements for resolution are also fulfilled.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 50

(50) Since the Board replaces national resolution authorities of the participating Member States in their resolution decisions, the Board should also replace those authorities for the purposes of the cooperation with non-participating Member States as far as the resolution functions are concerned. In particular, the Board should ~~represent~~include all authorities from the participating Members in the resolution colleges including authorities from non- participating Member States.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 51

(51) As many institutions operate not only within the Union, but internationally, an effective resolution mechanism needs to set out principles of cooperation with the relevant third country authorities. Support to third country authorities should be provided in accordance with the legal framework provided by Article 88 of Directive [ ]. For this purpose, as the Board should be the single authority empowered to resolve failing banks in the participating Member States, the Board should be exclusively empowered to conclude non-binding cooperation agreements with those third country authorities, on behalf of the national authorities of the participating Member States.

2013/10/22
Committee: ECON

Proposal for a regulation
Recital 52

(52) In order to carry out its tasks effectively, the Board should have appropriate investigatory powers. It should be able to require all necessary information either directly or through national resolution authorities, and to conduct investigations and on-site inspections, where appropriate in cooperation with national competent authorities. In the context of resolution, on-site inspections would be available for the Board to effectively monitor implementation by national authorities and to ensure that the ~~Commission and the~~ Board take their decisions on the basis of fully accurate information.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 2

Those uniform rules and procedure shall be applied by ~~the Commission together with~~ a Board ~~and~~, the resolution authorities of the participating Member States and the Commission in the context of State aid rules within the framework of a single resolution mechanism established by this Regulation. The single resolution mechanism shall be supported by a single bank resolution fund (hereinafter called the Fund).

2013/10/22
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1 a (new)

No action or policy under this Regulation shall discriminate either directly or indirectly against any Member State or group of Member States as a venue for the provision of banking or any other service in any currency.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – introductory part

For the purposes of this Regulation, the definitions laid down in Article 2 of Directive [ ] ~~and~~, Article 3 of Directive 2013/36/EU of 26 June 2013 of the European Parliament and of the Council19, and Article 4(1) of Regulation (EU) No 575/2013 shall apply. In addition, the following definitions shall apply:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 3 a (new)

(3a) 'the Board' means the resolution Board of the Single Resolution Mechanism as defined in Articles 38 and 39 of this Regulation

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 6

(6) ‘group level resolution authority’ means the national resolution authority of the participating Member State in which the institution, or parent undertaking subject to consolidated supervision, is establishdeleted;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 7

(7) ‘credit institution’ means credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/201320 ; __________________ 20 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, OJ L 176, 27.6.2013, p.1.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 8

(8) ‘investment firm’ means an investment firm as defined in point (2) of Article 4(1) of Regulation (EU) No 575/2013 that are subject to the initial capital requirement specified in Article 9 of that Regulation;deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 9

~~(9) ‘financial institution’ means a financial institution as defined in point (26) of Article 4(1) of Regulation (EU) No 575/2013;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 10

(10) ‘parent undertaking’ means a parent undertaking as defined in point (15) of Article 4(1) of Regulation (EU) No 575/2013, including an institution, a financial holding company or a mixed financial holding company;deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 11

~~(11) ‘institution under resolution’ means an entity referred to in Article 2 in respect of which a resolution action is taken;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 12

~~(12) ‘institution’ means a credit institution, or an investment firm covered by consolidated supervision in accordance with point (c) of Article 2;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 13

~~(13) ‘group’ means a parent undertaking and its subsidiaries, which are entities as referred to in Article 2;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 14

~~(14) ‘subsidiaries’ means subsidiary as defined in point (16) of Article 4(1) of Regulation (EU) No 575/2013;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 15

(15) ‘sale of business tool’ means the transfer of instruments of ownership, or assets, rights or liabilities, of an institution that meets the conditions for resolution to a purchaser that is not a bridge institution;deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 16

~~(16) ‘bridge institution tool’ means the transfer of the assets, rights or liabilities of an institution that meets the conditions for resolution to a bridge institution;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 17

~~(17) ‘asset separation tool’ means the transfer of assets and rights of an institution that meets the conditions for resolution to an asset management vehicle;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 18

~~(18) ‘bail-in tool’ means the write-down and conversion powers of liabilities of an institution that meets the conditions for resolution;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 5 – paragraph 1

1. Where, by virtue of this Regulation, ~~the Commission or~~ the Board exercises tasks or powers, which, according to Directive [ ] are to be exercised by the national resolution authority of a participating Member State, the Board shall, for the application of this Regulation and Directive [ ], be considered to be the relevant national resolution authority or, in case of cross-border group resolution, the relevant group national resolution authority.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 5 – paragraph 2

2. The Board~~, when acting as national resolution authority, shall act, where relevant, under authorisation of the Commission.~~ shall act on the basis of, and in conformity with, the Bank Recovery and Resolution Directive [ ]. Non- participating Member States or entities therein shall not be discriminated against or be worse off as a result of actions taken under this Regulation than if they had been conducted entirely under the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 1

1. No action, proposal or policy of the Board, the Commission or a national resolution authority shall discriminate against entities referred to in Article 2, deposit holders, investors or other creditors established in the Union on grounds of their nationality, currency or place of business.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 2 – introductory part

2. When making decisions or taking action, which may have an impact in more than one participating Member State or on a non-participating Member State, and in particular when taking decisions concerning groups established in two or more participating Member States, the ~~Commission~~Board shall give due consideration to all of the following factors:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 2 – point a

(a) the interests of the ~~participating~~ Member States where a group operates and in particular the impact of any decision or action or inaction on the financial stability, the economy, the deposit guarantee scheme or the investor compensation scheme of any of those Member States;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 2 – point b

(b) the objective of balancing the interests of the various Member States involved and avoiding unfairly prejudicing or unfairly protecting the interests of a Member State or unfairly prejudicing the interests of a non-participating Member State;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 3

3. The ~~Commission~~Board shall balance the factors referred to in paragraph 2 with the resolution objectives referred to in Article 12 as appropriate to the nature and circumstances of each case. but at all times without favour, preference or prejudice between Member States, location or currency.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 6 – paragraph 4

4. No decision of the Board or the Commission shall require Member States ~~to provide extraordinary public financial support~~collectively or individually to provide public financial support or distort loss allocation as between participating and non-participating Member States.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 7 – paragraph 4

4. The resolution plan shall provide for the resolution actions which the ~~Commission and the~~ Board may take where an entity referred to in Article 2 or a group meet the conditions for resolution. The resolution plan shall take into consideration a range of scenarios including that the event of failure may be idiosyncratic or may occur at a time of broader financial instability or of system wide events. The resolution plan shall not assume any extraordinary public financial support ~~besides the use of the Fund established in accordance with this Regulation~~or reliance on the Fund.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 7 – paragraph 5 – point i

(i) an explanation by the resolution authority as to how the resolution options could be financed without the assumption of any extraordinary public financial support or reliance on the Fund;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 7 – paragraph 7

7. The Board shall draw up the resolution plans in cooperation with the supervisor or consolidating supervisor and with the national resolution authorities of the participating Member States in which the entities are established. The Board shall cooperate with resolution authorities in non-participating Member States where there are entities in those Member States included in consolidated supervision.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 7 a (new)

Article 7a The Board shall have a memorandum of understanding with the resolution authorities of non-participating Member States.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 8 – paragraph 1

1. When drafting resolution plans in accordance with Article 7, the Board, after consultation with the competent authority, including the ECB, and the resolution authorities of non-participating Member States in which significant branches or subsidiaries are located insofar as is relevant to the significant branch, subsidiary and financial stability, shall conduct an assessment of the extent to which institutions and groups are resolvable without the assumption of extraordinary public financial support ~~besides the use of the Fund established in accordance with Article 64~~.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 8 – paragraph 3

3. When drafting resolution plans for groups, the Board shall assess the extent to which groups are resolvable in accordance with th~~is Regulation~~e Bank Recovery and Resolution Directive [ ] subject to the modifications in this Regulation adapting it to the establishment of the Board. A group shall be deemed resolvable if it is feasible and credible for the resolution authorities to either wind up group entities under normal insolvency proceedings or to resolve group entities by applying resolution tools and powers to group entities without giving rise to significant adverse consequences for the financial systems, including circumstances of broader financial instability or system wide events, of the Member States in which entities belonging to a group are situated, or other Member States or the Union and with a view to ensuring the continuity of critical functions carried out by those entities, either because they can be easily separated in a timely manner or by other means.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 8 – paragraph 6

6. The report shall be notified to the entity or parent undertaking concerned, to the competent authorities and to the resolution authorities of non-participating Member States in which significant branches or subsidiaries are located. It shall be supported by reasons for the assessment or determination in question and shall indicate how that assessment or determination complies with the requirement for proportionate application set out in Article 6.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 8 – paragraph 7

7. Within four months from the date of receipt of the report, the entity or the parent undertaking, or the competent authority, or resolution authority of a non- participating Member State, may submit observations and propose to the Board alternative measures to remedy the impediments identified in the report. The Board shall communicate any measure proposed by the entity or parent undertaking to the competent authorities and to the resolution authorities of non- participating Member States in which significant branches or subsidiaries are located.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 8 – paragraph 8 – introductory part

8. If the measures proposed by the entity or parent undertaking concerned do not effectively remove the impediments to resolvability, the Board shall take a decision, after consultation with the competent authority and, where appropriate, the macroprudential authority, competent authority and resolution authority of non-participating Member States, indicating that the measures proposed do not effectively remove the impediments to resolvability, and instructing the national resolution authorities to require the institution, the parent undertaking, or any subsidiary of the group concerned, to take any of the measures listed in paragraph 9, based on the following criteria:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 8 – paragraph 8 – point b

(b) the need to avoid a negative impact on financial stability in participating Member States, any affected non-participating Member States and the Union as a whole;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 8 a (new)

Article 8a Non-participating Member States cannot be bound without their agreement by the Board. Where there is a dispute it shall be referred to the EBA for binding mediation.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 9 – paragraph 1

1. The Board, on its own initiative or upon proposal by a national resolution authority, may apply simplified obligations in relation to the drafting of resolution plans referred to, in Article 7 ~~or may waive the obligation of drafting those plans~~and as allowed under the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 9 – paragraph 2

2. National resolution authorities may propose to the Board to apply simplified obligations ~~or to waive the obligation of drafting resolution plans for specific institutions or groups~~as allowed under the Bank Recovery and Resolution Directive [ ]. That proposal shall be reasoned and shall be supported by all the relevant documentation.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 2

2. The minimum requirement shall be calculated as the amount of own funds and eligible liabilities expressed as a percentage of the total liabilities and own funds, excluding liabilities arising from derivatives, of the institutions and parent undertakings referred to in Article 2in the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 3

~~[…]~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 4

4. The determination referred to in paragraph 1 may provide that the minimum requirement of own funds and eligible liabilities is partially met on a consolidated or an individual basis through contractual bail-in instrument.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 5

5. To qualify as a contractual bail-in instrument under paragraph 4, the Board must be satisfied that the instrument: (a) contains a contractual term providing that, where the Commission decides to apply the bail-in tool to that institution, the instrument shall be written down or converted to the extent required before other eligible liabilities are written down or converted; and (b) is subject to a binding subordination agreement, undertaking or provision under which in the event of normal insolvency proceedings, it ranks below other eligible liabilities and cannot be repaid until other eligible liabilities outstanding at the time have been settled.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 10 – paragraph 6

~~6. The Board shall take any determination referred to in paragraph 1 in the course of developing and maintaining resolution plans pursuant to Article 7.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 11 – paragraph 5

5. The ECB or the competent authority, and the Board shall ensure that the additional measure referred to in paragraph 4 and any action of the Board aimed at preparing for resolution under paragraph 2 are consistent and are not discriminatory with regard to Member States or entities in non-participating Member States.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 1

1. When acting under the resolution procedure referred to in Article 16, ~~the Commission and~~ the Board, in respect of their respective responsibilities, shall have regard to the resolution objectives, and choose the tools and powers that, in its view, best achieve the objectives that are relevant in the circumstances of the case.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 2 – subparagraph 1 – introductory part

The resolution objectives referred to in paragraph 1 are ~~the following:~~established in Article 26 of the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 2 – subparagraph 1 – point a

~~(a) to ensure the continuity of critical functions;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 2 – subparagraph 1 – point b

~~(b) to avoid significant adverse effects on financial stability, including to prevent contagion, and maintain market discipline;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 2 – subparagraph 1 – point c

~~(c) to protect public funds by minimising reliance on extraordinary public financial support;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 2 – subparagraph 1 – point d

(d) to protect depositors covered by Directive 94/19/EC and investors covered by Directive 97/9/EC21 . __________________ 21 Directive 97/9/EC of the European Parliament and of the Council of 3 March 1997 on investor-compensation schemes. OJ L 084, 26.03.1997, p.22.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 2 – subparagraph 2

When pursuing the ~~abov~~se objectives, ~~the Commission and~~ the Board shall seek to avoid the unnecessary destruction of value and to minimise the cost of resolution without discrimination directly or indirectly against any Member State or group of Member States.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 3

~~3. The Commission shall balance the objectives referred to in paragraph 2 as appropriate to the nature and circumstances of each case.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – introductory part

1. When acting under the resolution procedure referred to in Article 16, ~~the Commission and~~ the Board shall take all appropriate measures to ensure that the resolution action is taken in accordance with the ~~following principles:~~principles of Article 29 of the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – point a

~~(a) the shareholders of the institution under resolution bear first losses;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – point b

~~(b) creditors of the institution under resolution bear losses after the shareholders in accordance with the order of priority of their claims pursuant to Article 15;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – point c

(c) management of the institution under resolution is replaced, except in those cases when the retention of the management, in whole or in part, as appropriate to the circumstances, is considered necessary for the achievement of the resolution objectives;deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – point d

~~(d) in accordance with due process of law, individuals and entities are held accountable for the failure of the institution under resolution to the extent of their responsibility under national law;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – point e

~~(e) creditors of the same class are treated in an equitable manner;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 1 – point f

~~(f) no creditor shall incur greater losses than would have been incurred if the entity referred to in Article 2 had been wound up under normal insolvency proceedings.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 2

2. Where an institution is an entity belonging to a group, the Commission, where applicable, and the Board shall apply resolution tools and exercise resolution powers in a way that minimises the impact on other entities belonging to the group and on the group as a whole and minimises the adverse effect on financial stability in the Union and particularly in Member States where the group operates.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 13 – paragraph 3

3. Where the sale of business tool, the bridge institution tool or the asset separation tool is applied to an entity referred to in Article 2, that entity shall be considered to be the subject of bankruptcy proceedings or analogous insolvency proceedings for the purposes of Article 5(1) of Directive 2001/23/EC22 . __________________ 22 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses. OJL 82, 22.3.2001, p. 16.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 1

1. The ~~Commission shall tak~~ECB shall instigate a resolution action in relation to a financial institution, when the conditions specified in Article 16(2) are met, and in accordance with Article 28 of the Bank Recovery and Resolution Directive [ ], with regard to both the financial institution and with regard to the parent undertaking.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 2

2. The Commission shall take a resolution action in relation to a parent undertaking referred to in point (b) of Article 2, when the conditions specified in Article 16(2) are met with regard to both that parent undertaking and with regard to one or more subsidiaries which are institutions.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 14 – paragraph 3

3. By way of derogation from paragraph 2 and notwithstanding the fact that a parent undertaking may not meet the conditions established in Article 16(2), the Commission may take resolution action with regards to that parent undertaking when one or more of the subsidiaries which are institutions comply with the conditions established in Article 16(2) and action with regard to that parent undertaking is necessary for the resolution of one or more subsidiaries which are institutions or for the resolution of the group as a whole.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – introductory part

When applying the bail-in tool to an institution under resolution, and without prejudice to liabilities excluded from the bail-in tool under Article 24(3), ~~the Commission shall decide on, and~~ the Board and the national resolution authorities of the participating Member States shall exercise the write down and conversion powers to claims following ~~a reverse order of priority to the following order for normal insolvency procedures:~~the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – point a

~~(a) claims related to eligible deposits and claims from deposit guarantee schemes;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – point b

~~(b) unsecured non preferred claims;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – point c

~~(c) claims subordinated other than those mentioned in points (d) to (f);~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – point d

~~(d) claims from senior executives and directors;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – point e

~~(e) claims related to additional Tier 1 and Tier 2 instruments;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – point f

~~(f) claims related to common equity Tier 1 instruments;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 15 – paragraph 1 – subparagraph 1

~~starting from point (f) and ending with point (a).~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 1

1. Where the ECB ordecided on its own initiative or by notification from a national resolution authority ~~assesses~~ that the conditions referred to in points (a) and (b) of paragraph 2 are met in relation to an entity referred to in Article 2, it shall ~~communicate that assessment~~notify that decision without delay to the Commission and the Board.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 2 – introductory part

2. ~~On receiving a communication pursuant to paragraph 1, or on its own initiative~~The Board or the Commission may also request an assessment from a national resolution authority or the ECB. On receipt of a notification under paragraph 1, the Board shall conduct an assessment ~~of whether~~to verify that the following conditions are met:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 2 – point a

(a) the entity is failing or likely to fail, in particular due to a lack of own funds or liquidity;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 3 – subparagraph 1 – point d – introductory part

(d) ~~extraordinary~~ public financial support is required except when, in order to remedy a serious disturbance in the economy of a Member State and preserve financial stability, that extraordinary public financial support takes any of the following forms:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 5 – introductory part

5. If all the conditions established in paragraph 2 are met, the Board shall ~~recommend to the Commission that~~place the entity ~~be placed~~ under resolution. The ~~recommendation shall include~~Board shall establish at least the following:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 5 – point a

~~(a) the recommendation to place the entity under resolution;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 6

6. Having regard to the urgency of the circumstances in the case, the Commission shall decide, on its own initiative or taking into account, if any, the communication referred to in paragraph 1 or the recommendation of the Board referred to in paragraph 5, whether or not to place the entity under resolution, and on the framework of the resolution tools that shall be applied in respect of the entity concerned and of the use of the Fund to support the resolution action. The Commission, on its own initiative, may decide to place an entity under resolution if all the conditions referred to in paragraph 2 are met.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 7

7. ~~The decision of the Commission shall be addressed to the Board. If the Commission~~If the Board decides not to place the entity under resolution, because the condition laid down in paragraph 2(c) is not met, the entity concerned shall be wound up in accordance with national insolvency law.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 8

8. ~~Within the framework set by the Commission decision, t~~The Board shall decide on the resolution scheme referred to in Article 20 and shall ensure that the necessary resolution action is taken to carry out the resolution scheme by the relevant national resolution authorities. The decision of the Board shall be addressed to the relevant national resolution authorities and shall instruct those authorities, which shall take all necessary measures to implement the decision of the Board in accordance with Article 26, by exercising any of the resolution powers provided for in Directive [ ], in particular those in Articles 56 to 64 of that Directive [ ]. Where State aid is present, the Board may only decide after the Commission has taken a decision on that State aid.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 16 – paragraph 12

12. The Board shall have the power to ~~recom~~amend t~~o the Commission to amend the framework for the resolution tools and~~he framework for the resolution tools as permitted in the Bank Recovery and Resolution Directive [ ] and, subject to compliance with the same State aid criteria as applies to individual Member State aid under the Bank Recovery and Resolution Directive [ ], for the use of the Fund in respect of an entity placed under resolution.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 1

1. Before taking resolution action or exercising the power to write down or convert capital instruments, the Board shall ensure that a fair and realistic valuation of the assets and liabilities of an entity referred to in Article 2 is carried out by a person independent from any public authority, including the Board, the resolution authority, and the entity concernedfollow the procedures of Article 30 of the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 2

~~2. Subject to paragraph 13, where all the requirements laid down in paragraphs 3 to 14 are respected, the valuation shall be considered as definitive.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 3

3. Where an independent valuation according to paragraph 1 is not possible, the Board may carry out a provisional valuation of the assets and liabilities of the entity referred to in Article 2, in accordance with the provisions of paragraph 9.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 4

~~4. The objective of the valuation shall be to assess the value of the assets and liabilities of the entity referred to in Article 2 that is failing or is likely to fail.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 5

5. The purposes of the valuation shall be: (a) to be taken into account for the determination of whether the conditions for resolution or the conditions for the write down or conversion of capital instruments are met; (b) if the conditions for resolution are met, to be taken into account for the decision on the appropriate resolution action to be taken in respect of the entity referred to in Article 2; (c) when the power to write down or convert capital instruments is applied, to be taken into account for the decision on the extent of the cancellation or dilution of shares or other instruments of ownership, and the extent of the write down or conversion of relevant capital instruments; (d) when the bail-in tool is applied, to be taken into account for the decision on the extent of the write down or conversion of eligible liabilities; (e) when the bridge institution tool or asset separation tool is applied, to be taken into account for the decision on the assets, rights, liabilities or shares or other instruments of ownership to be transferred and the decision on the value of any consideration to be paid to the institution under resolution or, as the case may be, to the owners of the shares or other instruments of ownership; (f) when the sale of business tool is applied, to be taken into account for the decision on the assets, rights, liabilities or shares or other instruments of ownership to be transferred and to inform the Board's understanding of what constitutes commercial terms for the purposes of Article 21(2)(b); (g) in all cases, to ensure that any losses on the assets of the entity referred to in Article 2 are fully recognised at the moment the resolution tools are applied or the power to write down or convert capital instruments is exercised.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 6

6. Where applicable, the valuation shall be based on prudent assumptions, including as to rates of default and severity of losses. The valuation shall not assume any potential future provision of extraordinary public financial support to the entity referred to in Article 2 from the point at which resolution action is taken or the power to write down or convert capital instruments is exercised. Furthermore, the valuation shall take account of the fact that, if any resolution tool is applied: (a) the Board may recover any reasonable expenses properly incurred from the institution under resolution; (b) the Fund may charge interest or fees in respect of any loans or guarantees provided to the institution under resolution, in accordance with Article 71.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 7

7. The valuation shall be supplemented by the following information as appearing in the accounting books and records of the entity referred to in Article 2: (a) an updated balance sheet and a report on the financial position of the entity referred to in Article 2; (b) an analysis and an estimate of the accounting value of the assets; (c) the list of outstanding liabilities shown in the books and records of the entity referred to in Article 2, with an indication of the respective credits and priority of claims referred to in Article 15; (d) the list of assets held by the entity referred to in Article 2 for account of third parties who have ownership rights in respect of those assets.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 8

8. Where appropriate, to provide reasoning for the decisions referred to in points (e) and (f) of paragraph 5, the information in point (b) of paragraph 7 may be complemented by an analysis and estimate of the value of the assets and liabilities of the entity referred to in Article 2 on a market value basis.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 9

9. The valuation shall indicate the subdivision of the creditors in classes in accordance with the priority of claims referred to in Article 15 and an estimate of the treatment that each class of shareholders and creditors would have been expected to receive, if the entity referred to in Article 2 were wound up under normal insolvency proceedings.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 10

10. Where, due to the urgency in the circumstances of the case, either it is not possible to comply with the requirements in paragraphs 6 and 8, or where paragraph 2 applies, a provisional valuation shall be carried out. The provisional valuation shall comply with the requirements in paragraph 4 and in so far as reasonably practicable in the circumstances with the requirements of paragraphs 1, 7 and 9. The provisional valuation referred to in the first subparagraph shall include a buffer for additional losses, with appropriate justification.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 11

11. A valuation that does not comply with all the requirements laid down in this Article shall be considered as provisional until an independent person has carried out a valuation that is fully compliant with all the requirements set out in this Article. That ex post definitive valuation shall be carried out as soon as practicable. The purposes of the ex post definitive valuation shall be: (a) to ensure that any losses on the assets of the entity referred to in Article 2 are fully recognised in the books of accounts of that entity; (b) to provide reasoning for a decision to write back creditors' claims or to increase the value of the consideration paid, in accordance with paragraph 12.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 12

12. In the event that the ex post definitive valuation's estimate of the net asset value of the entity referred to in Article 2 is higher than the provisional valuation's estimate of the net asset value of that entity, the Board may request the national resolution authority to: (a) exercise its power to increase the value of the claims of creditors which have been written down under the bail-in tool; (b) instruct a bridge institution or asset management vehicle to make a further payment of consideration in respect of the assets, rights, liabilities to the entity referred to in Article 2 under resolution, or as the case may be, in respect of the shares or instruments of ownership to the owners of the shares or other instruments of ownership.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 13

13. By derogation from paragraph 1, a provisional valuation conducted in accordance with paragraphs 10 and 11 shall be a valid basis for the Board to take resolution actions or to exercise the write down or conversion power of capital instruments.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 14

~~14. The valuation shall not have any legal effect and be a procedural step preparing for the recommendation of the Board to apply a resolution tool or exercise a resolution power.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 15

~~15. The valuation shall also comply with the~~ delegated acts concerning the circumstances in which a person is independent, the methodology for assessing the value of the assets and liabilities of the entity, and the methodology for calculating and including a buffer for additional losses in the provisional valuation adopted by the Commission pursuant to Article 30(7) of Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 16

16. After the resolution action has been effected, for the purposes of assessing whether shareholders and creditors would have received better treatment if the institution under resolution had entered into normal insolvency proceedings, the Board shall ensure that a valuation is carried out ~~by an independent person. That valuation shall be distinct from the va~~under the provisions of Article 66 of the Bank Recovery and Resoluation ~~carried out under paragraphs (1) to (14)~~Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 17

17. The valuation referred to in paragraph 16 shall determine: (a) the treatment that shareholders and creditors would have received if the entity referred to in Article 2 under resolution in connection to which the partial transfer, write down or conversion has been made, had entered normal insolvency proceedings immediately before the transfer, write down or conversion was effected; (b) the actual treatment that shareholders and creditors have received in the resolution of the entity referred to in Article 2 under resolution; (c) whether there is any difference between the treatment referred to in point (a) and the treatment referred to in point (b).deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 17 – paragraph 18

18. The valuation referred to in paragraph 16 shall: (a) assume that the entity referred to in Article 2 under resolution in connection to which the partial transfer, write down or conversion has been made would have entered normal insolvency proceedings immediately before the resolution action has been effected; (b) assume that the partial transfer, or transfers, of rights, assets or liabilities, or the write down or the conversion had not been made; (c) disregard any provision of extraordinary public support to the entity referred to in Article 2 under resolution.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 5

5. The ~~Commission, upon a recommendation of the Board or on its own initiative, shall verify that the conditions referred to in paragraph 1 are met. The Commission~~Board shall verify that the conditions referred to in paragraph 1 are met and, in accordance with the Bank Recovery and Resolution Directive [ ], shall determine whether the powers to write down or convert capital instruments shall be exercised singly or, following the procedure under Article 16(4) to (7), together with a resolution action.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 6

6. Where the ~~Commission~~Board determines that the conditions referred to in paragraph 1 are met, but the conditions for resolution in accordance with Article 16(2) are not met, the Board~~, following a decision of the Commission,~~ shall instruct the national resolution authorities to exercise the write down or conversion powers in accordance with Articles 51 and 52 of Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 8 – introductory part

8. The Board shall ensure that national resolution authorities exercise the write down or conversion powers in a way that ~~produces the following results:~~follows the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 8 – point a

~~(a) Common Equity Tier 1 reduces first in proportion to the losses and up to its capacity;~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 8 – point b

(b) the principal amount of relevant capital instruments is written down or converted into Common Equity Tier 1 instruments or both, to the extent required and up to the capacity of the relevant capital instruments.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 18 – paragraph 9

~~9. The national resolution authorities shall implement the instructions of the Board and exercise the write down or conversion of capital instruments in accordance with Article 26.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1

The resolution scheme adopted by the Board under Article 16(8) shall establish~~, in compliance with the decisions of the Commission on~~ the resolution framework under Article 16(6) and comply with any decision on State aid ~~where applicable by analogy~~made following the same rules as those applicable for individual Member State aid under the Bank Recovery and Resolution Directive [ ]. The Board shall establish the details of the resolution tools to be applied to the institution under resolution concerning at least the measures referred to in Articles 21(2), 22(2), 23(2) and 24(1) and determine the specific amounts and purposes for which the Fund shall be used.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 2

In the course of the resolution process, the Board may amend and update the resolution scheme as appropriate in light of the circumstances in the case and within the resolution framework decided upon ~~by the Commission~~ pursuant to Article 16(6).

2013/10/22
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 1 – introductory part

1. Within the framework decided ~~by the Commission~~, the sale of business tool shall consist of the transfer to a purchaser that is not a bridge institution of the following:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 22 – paragraph 1 – introductory part

1. Within the framework decided ~~by the Commission~~, the bridge institution tool shall consist of the transfer to a bridge institution of any of the following:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 1

Within the framework decided ~~by the Commission~~, the asset separation tool shall consist of the transfer of assets, rights or liabilities of an institution under resolution to an asset management vehicle as in the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 23 – paragraph 1 – subparagraph 2

An asset management vehicle shall be a legal entity that meets all of the following requirements: (a) it is wholly or partially owned by or it is controlled by one or more public authorities, which may include the resolution authority or the resolution financing arrangement; (b) it has been created for the purpose of receiving some or all of the assets, rights and liabilities of one or more institutions under resolution or a bridge institution.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 23 – paragraph 2

2. Concerning the asset separation tool the resolution scheme referred to in Article 20 shall establish in particular: (a) the instruments, assets, rights and liabilities to be transferred by the national resolution authority to an asset management vehicle in accordance with Article 36(1) to (4) and (6) to (10) of Directive [ ]; (b) the consideration for which the assets shall be transferred by the national resolution authority to the asset management vehicle, in accordance with the principles established in Article 17. This provision does not prevent the consideration having nominal or negative value.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 1 – subparagraph 1 – introductory part

The bail-in tool ~~may~~shall be applied ~~for either of the following purposes:~~in accordance with the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 1 – subparagraph 1 – point a

(a) to recapitalise an entity referred to in Article 2 that meets the conditions for resolution to the extent sufficient to restore its ability to comply with the conditions for authorisation and to carry on the activities for which is authorised under Directive 2013/36/EU or Directive 2004/39/EC;deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 1 – subparagraph 1 – point b

~~(b) to convert to equity or reduce the principal amount of claims or debt instruments that are transferred to a bridge institution with a view to providing capital for that bridge institution.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 1 – subparagraph 2

Within the framework decided by the Commission concerning the bail-in tool, the resolution scheme shall establish in particular: (a) the aggregate amount by which eligible liabilities must be reduced or converted, in accordance with paragraph 6; (b) the liabilities that may be excluded in accordance with paragraphs 5 to 13; (c) the objectives and minimum content of the business reorganisation plan to be submitted in accordance with paragraph 16.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 2

2. The bail-in tool may be applied for the purpose referred to in point (a) of paragraph 1 only if there is a realistic prospect that the application of that tool, in conjunction with measures implemented in accordance with the business reorganisation plan required by paragraph 16 will, in addition to achieving relevant resolution objectives, restore the institution in question to financial soundness and long-term viability. If the condition set out in the first subparagraph is not fulfilled, any of the resolution tools referred to in points (a), (b) and (c) of paragraph 2 of Article 19, and the bail-in tool referred to in point (d) of paragraph 2 of Article 19, shall apply, as appropriate.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 3

3. The following liabilities shall not be subject to write down and conversion: (a) covered deposits; (b) secured liabilities including covered bonds; (c) any liability that arises by virtue of the holding by the entity referred to in Article 2 of client assets or client money, or a fiduciary relationship between entity referred to in Article 2, as fiduciary, and another person, as beneficiary, provided that such client or beneficiary is protected under the applicable insolvency or civil law; (d) liabilities to institutions, excluding entities that are part of the same group, with an original maturity of less than seven days; (e) liabilities arising from a participation in a system designated according to Directive 98/26/EC23 which have a remaining maturity of less than seven days; (f) a liability to any one of the following: (i) an employee, in relation to accrued salary, pension benefits or other fixed remuneration, except for the variable component of remuneration that is not regulated by law or collective bargaining agreement; (ii) a commercial or trade creditor arising from the provision to the institution or entity referred to in points (b), (c) or (d) of Article 1 of goods or services that are critical to the daily functioning of its operations, including IT services, utilities and the rental, servicing and upkeep of premises; (iii) tax and social security authorities, provided that those liabilities are preferred under the applicable insolvency or civil law. __________________ 23 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

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 4

4. The scope of the bail in tool set out in paragraph 3 shall not prevent, where appropriate, the exercise of the bail- powers to any part of a secured liability or a liability for which collateral has been pledged that exceeds the value of the assets, pledge, lien or collateral against which it is secured. Covered bonds as defined in Article 52(4) of Directive 2009/65/EC24 may be exempted by this provision. __________________ 24 Directive 2009/65/EC of the European parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), OJ L302, 17.11.2009, p.32.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 5

5. In exceptional circumstances, certain liabilities may be excluded or partially excluded from the application of the write-down and conversion powers in any of the following circumstances: (a) Where it is not possible to bail-in that liability within a reasonable time notwithstanding the good faith efforts of the resolution authority; or (b) Where the exclusion is strictly necessary and is proportionate to achieve the continuity of critical functions and core business lines in a manner that maintains the ability of the institution under resolution to continue key operations, services and transactions; or (c) Where the exclusion is strictly necessary and proportionate to avoid giving rise to widespread contagion that would severely disrupt the functioning of financial markets in a manner that could cause a serious disturbance to the economy of a Member State or of the Union; or (d) Where the application of the bail-in tool to these liabilities would cause a destruction in value such that the losses borne by other creditors would be higher than if these liabilities were excluded from bail-in. Where an eligible liability or class of eligible liabilities is excluded, or partially excluded, the level of write down or conversion applied to other eligible liabilities may be increased to take account of such exclusions, provided that the level of write down and conversion applied to other eligible liabilities respects the principle laid down in point (f) of Article 13(1).deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 6

6. Where an eligible liability or class of eligible liabilities excluded or partially excluded, pursuant to paragraph 5, and the losses that would have been borne by those liabilities have not been passed on fully to other creditors, a contribution from the Fund may be made to the institution under resolution to: (a) cover any losses which have not been absorbed by eligible liabilities and restore the net asset value of the institution under resolution to zero in accordance with point (a) of paragraph 1; (b) purchase shares or other instruments of ownership or capital instruments in the institution under resolution, in order to recapitalise the institution in accordance with point (b) of paragraph 1.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 7

7. The Fund may only make a contribution referred to in paragraph 6 provided that the contribution meets both the following criteria: (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 17, has been made by 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; (b) the contribution from the Fund does not exceed 5% 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 17.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 8

8. The contribution of the Fund may be financed by: (a) the amount available to the Fund which has been raised through contributions by entities referred to in Article 2 in accordance with Article 66; (b) the amount that can be raised through ex post contributions in accordance with Article 67 within a period of three years; and (c) where the amounts referred to in points (a) and (b) are insufficient, amounts raised from alternative financing sources in accordance with Article 69.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 9

9. In extraordinary circumstances, further funding may be sought from alternative financing sources after: (a) the 5% limit specified in point (b) of paragraph 7 has been reached; and (b) all unsecured, non-preferred liabilities, other than eligible deposits, have been written down or converted in full.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 10

10. As an alternative or in addition, when the conditions in points (a) and (b) of paragraph 7 are met, a contribution may be made from resources which have been raised through ex-ante contributions in accordance with Article 66 and which have not yet been usdeleted.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 11

~~11. For the purposes of this Regulation, subparagraph 5 of Article 38 (3cab) of Directive [ ] shall not apply.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 12

12. When taking the decision referred to in paragraph 5, due consideration shall be given to the following factors: (a) the principle that losses should be borne first by shareholders and next, in general, by creditors of the institution under resolution in order of preference; (b) the level of loss absorbing capacity that would remain in the institution under resolution if the liability or class of liabilities were excluded; (c) the need to maintain adequate resources for resolution financing.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 13

13. The Board shall make its assessment of the following points on the basis of a valuation that complies with the requirements of Article 17: (a) the aggregate amount by which eligible liabilities must be written down in order to ensure that the net asset value of the institution under resolution is equal to zero; (b) where relevant, the aggregate amount by which eligible liabilities must be converted into shares in order to restore the Common Equity Tier 1 capital ratio of either the institution under resolution or the bridge institution. When the application of the bail-in tool for the purpose referred to in point (a) of paragraph 1 is decided upon, the assessment referred to in the first subparagraph shall establish the amount by which eligible liabilities need to be converted in order to restore the Common Equity Tier 1 capital ratio of the institution under resolution, or where applicable the bridge institution taking into account any contribution of capital by the resolution fund pursuant to point (d) of Article 71(1) and to sustain sufficient market confidence in the institution under resolution or the bridge institution and enable it to continue to comply with the conditions for authorisation and to carry on the activities for which it is authorised under Directive 2013/36/EU or Directive 2004/39/EC.deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 14

~~14. Exclusions under paragraph 5 may be applied either to completely exclude a liability from write down or to limit the extent of the write down applied to that liability.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 24 – paragraph 15

~~15. The write down and conversion powers shall respect the requirements on the priority of claims set out in Article 15.~~deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 25 – paragraph 3

3. Where this is necessary in order to achieve the resolution objectives, the ~~Commission, following a recommendation of the Board or on its own initiative,~~Board may review its decision on the resolution framework and adopt the appropriate amendments.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 27 – paragraph 5

5. For the purposes of this Regulation, the Board shall appoint a representative which shall participate in the Resolution Committee of the European Banking Authority established in accordance with Article 113 of Directive [ ].deleted

2013/10/22
Committee: ECON

Proposal for a regulation
Article 41 – paragraph 2

2. The Board shall submit each year a report to the European Parliament, the Council, the Commission and the European Court of Auditors on the execution of the tasks conferred upon it by this Regulation. Subject to the requirements on professional secrecy, this report will be published on the Board's website.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 41 – paragraph 4

4. At the request of the European Parliament, the Executive Director shall participate in a hearing on the execution of its resolution tasks by the competent committees of the Parliament. A hearing shall take place at least once every calendar year.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 41 – paragraph 4 a (new)

4a. At the request of the European Parliament, the Deputy Executive Director shall participate in a hearing on the execution of its resolution tasks by the competent committees of the Parliament.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 47 – paragraph 2

2. The Board in its plenary session shall hold at least two ordinary meetings a year. In addition, it shall meet on the initiative of the Executive Director, at the request of the Commission, at the request of the ECB, or at the request of at least one-third of its members.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 50 – paragraph 2 – point b – point i

(i) providing the Commission, as early as possible, with any relevant information ~~allowing the Commission to assess and take a reasoned decision pursuant to Article 16(6)~~;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 51 – paragraph 3

3. ~~Until the target funding level referred to in Article 65 is reached, a~~A member appointed by a Member State shall be able to require once a further deliberation of the Board where a decision under discussion impinges on the fiscal responsibilities of that Member State.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 52 – paragraph 4

4. The Executive Director and the Deputy Executive Director shall be appointed on the basis of merit, skills, knowledge of banking and financial matters, of experience relevant to financial supervision and regulation. The appointment procedure will pay respect to the principle of gender balance.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 52 – paragraph 5

5. After hearing the Board, in its plenary session, the Commission shall propose a list of candidates to the Council for the appointment of the Executive Director and the Deputy Executive Director. The Council shall appoint the Executive Director and the Deputy Executive Director after ~~hearing~~approval by the European Parliament.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 52 – paragraph 8

8. If the Executive Director or the Deputy Executive Director no longer fulfil the conditions required for the performance of their duties or have been guilty of serious misconduct, the Council may, on a proposal from the Commission and after ~~hearing~~approval by the European Parliament, remove the Executive Director or the Deputy Executive Director from office.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 53 – paragraph 1 – subparagraph 1

The Executive Director and the Deputy Executive Director shall exercise their tasks in conformity with the decisions of the Commission, ECB and of the Board.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 60 a (new)

Article 60 a Court of Auditors 1. Following the consideration of the final accounts prepared by the Board as set out in Article 60, the Court of Auditors shall submit a report on its findings to the European Parliament and the Council by 1 December following each financial year. 2. The report produced by the Court of Auditors shall include: (a) the economy, efficiency and effectiveness with which any finance, including from the Fund, has been used; (b) any contingent liabilities arising as a result of the Board carrying out its duties under this Regulation. 3. The Court of Auditors shall also produce a report on each decision taken under Article 16 to resolve an entity. Each report shall, in addition to the provisions of paragraph 2, examine whether: (a) the resolution was in accordance with the requirements of this Regulation and the Bank Recovery and Resolution Directive [ ]; (b) the resolution was well planned and designed, having regard in particular to the resolution framework and resolution scheme; (c) sufficient regard was had to the economy and to non-discrimination; (d) that any use of the Fund was justified. 4. Each report under paragraph 3 shall be produced within 12 months of the date on which the resolution decision under Article 16 was taken. 5. Without prejudice to Article 287(4) TFEU, the European Parliament and the Council may request that the Court of Auditors examine in a report under paragraph 3, or additional report, such other matters as may be specified from time to time.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 61 – paragraph 2

As far as is compatible with the particular nature of the Board, and taking into account that not all Member States participate or benefit, the financial provisions shall be based on the framework financial Regulation adopted for bodies set up under the TFEU in accordance with Article 208 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 64 – paragraph 2

2. The Board shall use the Fund only for the purpose of ensuring the efficient implementation of the resolution tools and powers specified in Part II, Title I and in accordance with the resolution objectives and the principles governing resolution set out in Articles 12 and 13. Under no circumstances shall the Union budget be held liable for expenses or losses of the Fund or for any liability of the Board.

2013/10/22
Committee: ECON

Proposal for a regulation
Article 71 – paragraph 1 – introductory part

1. Within the framework decided ~~by the Commission~~, when applying the resolution tools to entities referred to in Article 2, the Board may use the Fund for the following purposes:

2013/10/22
Committee: ECON

Proposal for a regulation
Article 71 – paragraph 1 – point a

(a) to temporarily guarantee the assets or the liabilities of the institution under resolution, its subsidiaries, a bridge institution or an asset management vehicle;

2013/10/22
Committee: ECON

Proposal for a regulation
Article 73 a (new)

Article 73a So as not to distort competition within the Union as a whole, the use of deposit guarantee schemes in the context of resolution shall be in exact accordance with the Bank Recovery and Resolution Directive [ ].

2013/10/22
Committee: ECON

Proposal for a regulation
Article 78 – paragraph 4

4. The Board shall compensate a national resolution authority for the damages to which it has been condemned by a national court, or which it has, in agreement with the Board, committed to pay in accordance with an amicable settlement, which are the consequences of an act or omission committed by that national resolution authority in the course of any resolution under this Regulation, unless that act or omission constituted a violation of Union law, this Regulation, a Decision of the Commission or a Decision of the Board, or constituted a manifest and serious error of judgement. Any compensation shall not have an effect on the Union budget.

2013/10/22
Committee: ECON