Changes from adopted text to adopted text

RemovedWhere the ECB or the relevant national competent authority has assessed that the condition referred to in the first subparagraph, point (a), is met in relation to an entity as referred to in the first subparagraph, they shall communicate that assessment to the Commission and to the Board without delay.

RemovedThe assessment of the condition referred to in the first subparagraph, point (b), ▌shall be made by the Board, in its executive session and in close cooperation with the ECB or the relevant national competent authority, after consulting, without delay, a designated authority of the DGS, and, where appropriate, an IPS of which the institution is a member. The consultation with the IPS shall include a consideration of the availability of measures by the IPS that could prevent the failure of the institution within a reasonable timeframe. The ECB or the relevant national competent authority shall, without delay, provide the Board with any relevant information that the Board requests to inform its assessment. The ECB or the relevant national competent authority may also inform the Board that it considers the condition laid down in the first subparagraph, point (b), to be met.

Removed1a. The Board shall adopt a resolution scheme in accordance with paragraph 1 in relation to a central body and all credit institutions permanently affiliated to it that are part of the same resolution group only where the central body and all credit institutions permanently affiliated to it, or the resolution group to which they belong, comply as a whole with the conditions laid down in paragraph 1, first subparagraph.

Removed2. Without prejudice to cases where the ECB has decided to exercise directly supervisory tasks relating to credit institutions pursuant to Article 6(5), point (b) of Regulation (EU) No 1024/2013, in the event of receipt of a communication pursuant to paragraph 1 in relation to an entity or group as referred to in Article 7(3), the Board shall communicate its assessment as referred to paragraph 1, fourth subparagraph, to the ECB or the relevant national competent authority without any delay.

Removed3. The previous adoption of a measure pursuant to Article 16 of Regulation (EU) No 1024/2013, to Article 27 of Directive 2014/59/EU, to Article 13 of this Regulation or to Article 104 of Directive 2013/36/EU shall not be a condition for taking a resolution action.’;

Removed(b) paragraph 4 is amended as follows:

Removed(i) in the first subparagraph, point (d) is replaced by the following:

Removed‘(d) extraordinary public financial support is required except where such support is granted in one of the forms referred to in Article 18a(1)’;

Removed(ii) the second and third subparagraphs are deleted;

Removed(c) paragraph 5 is replaced by the following:

Removed‘5. For the purposes of paragraph 1, point (c), a resolution action shall be treated as in the public interest where that resolution action is necessary for the achievement of, and is proportionate to, one or more of the resolution objectives referred to in Article 14 and where winding up of the institution under normal insolvency proceedings would not meet those resolution objectives more effectively.

RemovedResolution action shall be presumed not to be in the public interest for the purposes of paragraph 1, point (c), of this Article where the resolution authority has decided to apply simplified obligations to an institution, pursuant to Article 4. The presumption shall be rebuttable and shall not apply where the resolution authority assesses that one or more of the resolution objectives would be at risk if the institution were to be wound up under normal insolvency proceedings.

RemovedWhen carrying out the assessment referred to in the first subparagraph, the Board, based on the information available to it at the time of that assessment, shall evaluate and compare all extraordinary public financial support ▌to be granted to the entity, both in the event of resolution and in the event of winding up in accordance with the applicable national law.’;

RemovedFor the purposes of the second subparagraph of this paragraph, participating Member States, deposit guarantee schemes and, where necessary, the designated authority as defined in Article 2(1), point (18), of Directive 2014/49/EU shall keep the Board informed of any preparatory measures for the granting of the measures referred to in Article 18a(1), points (c) and (d), of this Regulation, including any pre-notification contacts with the Commission.

Removed(d) in paragraph 7, the second subparagraph is replaced by the following:

Removed‘Within 24 hours from the transmission of the resolution scheme by the Board, the Commission shall endorse the resolution scheme or object to it, either with regard to the discretionary aspects of the resolution scheme in the cases not covered in the third subparagraph of this paragraph or with regard to the proposed use of State aid or Fund aid that is not considered compatible with the internal market.’;

Removed(e) the following paragraphs are added:

Removed‘11. Where the conditions referred to in paragraph 1, points (a) and (b), are met, the Board may instruct the national resolution authorities to exercise the powers under national law transposing Article 33a of Directive 2014/59/EU, in accordance with the conditions laid down in national law. The national resolution authorities shall implement the instructions of the Board in accordance with Article 29.

Removed11a. In order to ensure effective and consistent application of this Article, the Board shall give guidance and provide instructions to national resolution authorities for the application of the regulatory technical standards referred to in Article 32(5a) of Directive 2014/59/EU.’

Removed(20) the following Article 18a is inserted:

Removed‘Article 18a

RemovedExtraordinary public financial support

Removed1. Extraordinary public financial support outside of resolution action may be granted to an entity as referred to in Article 2 on an exceptional basis only in one of the following cases and provided that the extraordinary public financial support complies with the conditions and requirements established in the Union State aid framework:

Removed(a) where, to remedy a serious disturbance in the economy of a Member State of an exceptional or systemic nature and to preserve financial stability, the extraordinary public financial support takes any of the following forms:

Removed(i) a State guarantee to back liquidity facilities provided by central banks in accordance with the central banks’ conditions;

Removed(ii) a State guarantee of newly issued liabilities;

Removed(iii) an acquisition of own funds instruments other than Common Equity Tier 1 instruments or of other capital instruments, or a use of impaired assets measures at prices, duration, and terms that do not confer an undue advantage upon the institution or entity concerned, provided that none of the circumstances referred to in Article 18(4), points (a), (b) or (c), or Article 21(1) are present at the time the public support is granted.

Removed(b) where the extraordinary public financial support takes the form of a cost-effective intervention by a deposit guarantee scheme ▌in compliance with the conditions set out in Articles 11a and 11b of Directive 2014/49/EU, provided that none of the circumstances referred to in Article 18(4) are present;

Removed(c) where the extraordinary public financial support takes the form of a cost-effective intervention by a deposit guarantee scheme in the context of the winding up of a credit institution pursuant to Article 32b of Directive 2014/59/EU and in accordance with the conditions set out in Article 11(5) of Directive 2014/49/EU;

Removed(d) where the extraordinary public financial support takes the form of State aid within the meaning of Article 107(1) TFEU granted in the context of the winding up of institution or entity pursuant to Article 32b of Directive 2014/59/EU, other than the support granted by a deposit guarantee scheme pursuant to Article 11(5) of Directive 2014/49/EU.

Removed2. The support measures referred to in paragraph 1, point (a), shall fulfil all of the following conditions:

Removed(a) the measures are confined to solvent entities, as confirmed by the ECB or by the relevant national competent authority;

Removed(b) the measures are of a precautionary and temporary nature and are based on a pre-defined ▌strategy to exit the support measure approved by the ECB or the relevant national competent authority, including a clearly specified termination date, sale date or repayment schedule for any of the measures provided; this information shall not be disclosed until one year after concluding the strategy to exit the support measure, or the implementation of the remediation plan, or the assessment under the seventh subparagraph of this paragraph;

Removed(c) the measures are proportionate to remedy the consequences of the serious disturbance or to preserve financial stability;

Removed(d) the measures are not used to offset losses that the entity has incurred or is likely to incur over the next 12 months.

RemovedFor the purposes of the first subparagraph, point (a), an entity shall be deemed to be solvent where the ECB or the relevant national competent authority have concluded that no breach has occurred, or is likely to occur in the 12 following months, based on current expectations, of any of the requirements referred to in Article 92(1) of Regulation (EU) No 575/2013, Article 104a of Directive 2013/36/EU, Article 11(1) of Regulation (EU) 2019/2033, Article 40 of Directive (EU) 2019/2034 or the relevant applicable requirements under national or Union law.

RemovedFor the purposes of the first subparagraph, point (d), the relevant competent authority shall quantify the losses that the entity has incurred or is likely to incur. That quantification shall be based, as a minimum, on asset quality reviews conducted by the ECB, EBA or national authorities, or, where appropriate, on on-site inspections conducted by the competent authority. Where such exercises cannot be undertaken in due time, the competent authority may base its evaluation on the institution’s balance sheet, provided that the balance sheet complies with the applicable accounting rules and standards, as confirmed by an independent external auditor ▌. The competent authority shall make its best efforts to ensure that the quantification is based on the market value of the institution or entity’s assets, liabilities and off-balance sheet items.

RemovedThe support measures referred to in paragraph 1, point (a)(iii), shall be limited to measures that have been assessed by the ECB or the national competent authority as necessary to secure the solvency of the entity by addressing its capital shortfall established in the adverse scenario of national, Union or SSM-wide stress tests or equivalent exercises conducted by the ECB, EBA or national authorities, where applicable, confirmed by the ECB or the relevant competent authority.

RemovedBy way of derogation from paragraph 1, point (a)(iii), acquisition of Common Equity Tier 1 instruments shall be exceptionally permitted where the nature of the shortfall identified is such that the acquisition of any other own funds instruments or other capital instruments would not make it possible for the entity concerned to address its capital shortfall established in the adverse scenario in the relevant stress test or equivalent exercise. The amount of acquired Common Equity Tier 1 instruments shall not exceed 2% of the total risk exposure amount of the institution or entity concerned calculated in accordance with Article 92(3) of Regulation (EU) No 575/2013.

RemovedIn case any of the support measures referred to in paragraph 1, point (a), is not redeemed, repaid or otherwise terminated in accordance with the terms of the ▌strategy to exit the support measure established at the time of granting such measure, the ECB or the relevant national competent authority shall request the institution or entity to submit a one-time remediation plan. The remediation plan shall describe the steps to be taken in order to maintain or restore compliance with supervisory requirements, the long-term viability of the institution or entity and its capacity to repay the amount provided, as well as the associated timeframe.

RemovedWhere the ECB or the relevant national competent authority does not recognise the one-time remediation plan as credible or feasible or where the institution or entity fails to comply with the remediation plan, an assessment of whether the institution or entity is failing or likely to fail shall be conducted in accordance with Article 18.

Removed2a. The ECB or the relevant national competent authority shall inform the Board of its assessment whether the conditions referred to in paragraph 2, points (a), (b) and (d), with respect to the entities and groups referred to in Article 7(2), and to the entities and groups referred to in Article 7(4), point (b), and Article 7(5) are met.’;

Removed(21) Article 19 is amended as follows:

Removed(a) paragraph 1 is replaced by the following:

Removed‘1. Where resolution action involves the granting of State aid pursuant to Article 107(1) TFEU or of Fund aid in accordance with paragraph 3 of this Article, the resolution scheme referred to in Article 18(6) of this Regulation shall not enter into force until such time when the Commission adopts a positive or conditional decision, or a decision not to raise objections, concerning the compatibility of the use of such aid with the internal market. The Commission shall, taking into consideration the need for timely execution of the resolution scheme by the Board, take the decision concerning the compatibility of the use of State aid or of Fund aid with the internal market at the latest when it endorses or objects to the resolution scheme pursuant to Article 18(7), second subparagraph, or when the period of 24 hours referred to in Article 18(7), fifth subparagraph, expires, whichever is earlier. In the absence of such decision within 24 hours of the transmission of the resolution scheme by the Board, the resolution scheme shall be deemed authorised by the Commission and shall enter into force in accordance with Article 18(7), fifth subparagraph.

RemovedIn performing the tasks conferred on them by Article 18 of this Regulation, Union institutions shall have in place structural arrangements that ensure operational independence and avoid conflicts of interest that could arise between the functions entrusted with the performance of those tasks and other functions and shall make public in an appropriate manner all relevant information on their internal organisation in this regard.’;

Removed(b) paragraph 3 is replaced by the following:

Removed‘3. As soon as the Board considers that it may be necessary to use the Fund, it shall informally, promptly, and in a confidential manner contact the Commission to discuss the possible use of the Fund, including legal and economic aspects related to its use. Once the Board is sufficiently certain that the resolution scheme envisaged will entail the use of Fund aid, the Board shall formally notify the Commission of the proposed use of the Fund. That notification shall contain all the information that the Commission needs to make its assessments pursuant to this paragraph, and that the Board has in its possession or which the Board has the power to obtain in accordance with this Regulation.

RemovedUpon receiving the notification referred to in the first subparagraph, the Commission shall assess whether the use of the Fund would distort, or threaten to distort, competition by favouring the beneficiary or any other undertaking so as, insofar as it would affect trade between Member States, to be incompatible with the internal market. The Commission shall apply to the use of the Fund the criteria established for the application of State aid rules as enshrined in Article 107 TFEU. The Board shall provide the Commission with the information in its possession, or which the Board has the power to obtain in accordance with this Regulation, and that the Commission deems to be necessary to carry out that assessment.

RemovedWhen making its assessment, the Commission shall be guided by all the relevant regulations adopted under Article 109 TFEU, all related and relevant communications and guidance of the Commission, and all measures adopted by the Commission in application of the rules of the Treaties relating to State aid as are in force at the time the assessment is to be made. Those measures shall be applied as if references to the Member State responsible for notifying the aid were references to the Board, and with any other necessary modifications.

RemovedThe Commission shall decide on the compatibility of the use of the Fund with the internal market and address that decision to the Board and to the national resolution authorities of the Member State or Member States concerned. That decision may be contingent on conditions, commitments or undertakings in respect of the beneficiary and it shall take into account the need for timely execution of resolution action by the Board.

RemovedThe decision may also lay down obligations on the Board, the national resolution authorities in the participating Member State or Member States concerned or the beneficiary, as applicable and to the extent that those obligations fall within their respective remits, to enable compliance with it to be monitored. This may include requirements for the appointment of a trustee or other independent person to assist in monitoring. A trustee or other independent person may perform such functions as may be specified in the Commission decision.

RemovedAny decision pursuant to this paragraph shall be published in the Official Journal of the European Union.

RemovedThe Commission may issue a negative decision, addressed to the Board, where it decides that the proposed use of the Fund would be incompatible with the internal market and cannot be implemented in the form proposed by the Board. On receipt of such a decision the Board shall reconsider its resolution scheme and prepare a revised resolution scheme.’;

Removed(c) paragraph 10 is replaced by the following:

Removed‘10. By way of derogation from paragraph 3, the Council may, on an application of a Member State or the Board, within 7 days of such application being made, unanimously decide that the use of the Fund is to be considered compatible with the internal market, where such a decision is justified by exceptional circumstances. The Commission shall take a decision on the case where the Council has not decided within those 7 days.’;

Removed(22) Article 20 is amended as follows:

Removed(a) paragraph 1 is replaced by the following:

Removed‘1. Before determining whether the conditions for resolution, or the conditions for write down or conversion of capital instruments and eligible liabilities as referred to in Article 21(1) are met, the Board shall ensure that a fair, prudent and realistic valuation of the assets and liabilities of an entity as referred to in Article 2 is carried out by a person that is independent from any public authority, including the Board and the national resolution authority, and from the entity concerned.’;

Removed(b) the following paragraph 8a is inserted: