Changes from adopted text to adopted text

Removed(c) safeguards preventing outflows of funds, including the measures referred to in paragraph 5;

Removed(d) where appropriate, contributions by shareholders and subordinated debt holders of the supported credit institution.

RemovedWhen determining the capital shortfall, the DGS may also take into account any▌ forward-looking capital adequacy assessment, including ▌the capital ▌ conservation plan referred to in Article 142 of Directive 2013/36/EU.

RemovedMember States shall ensure that where a credit institution is a member of an IPS as referred to in Article 1(2), point (c), the capital shortfall is determined by the IPS.

RemovedWhen determining the capital shortfall, DGS shall notify the competent authority.

Removed4. Member States shall ensure▌ the note referred to in paragraph 1 provides for an exit strategy from the preventive measures, including a clearly specified repayment schedule by the credit institution of any repayable funds received as part of the preventive measures. That information shall not be disclosed until one year after concluding the exit strategy οr the implementation of the remediation plan or the conclusion of the assessment under Article 11c(3).

Removed5. Member States shall ensure that no dividends, share buy-backs or variable remuneration are paid out and no irrevocable commitment to pay out dividends, share buy-backs or variable remuneration is undertaken by the supported credit institution. The competent authority may exceptionally partially restrict that prohibition where the credit institution establishes to the satisfaction of the competent authority that it is legally bound to pay out the dividends. ▌Member States shall ensure that the▌ restrictions under this paragraph remain in place until the supported credit institution has reimbursed the DGS with the same amount used for the preventive measures.

Removed5a. Member States shall ensure that within six months of the provision of the initial financial support, the beneficiary credit institution submits a business reorganisation plan to the competent authority. Where the competent authority is not satisfied that the business reorganisation plan is credible and feasible to secure long-term viability, the preventive measures to the credit institution concerned shall be suspended, and the competent authority shall implement appropriate measures to ensure that long-term viability is secured.

RemovedBy way of derogation from the first subparagraph of this paragraph, where a credit institution belongs to an IPS as referred to in Article 1(2), point (c), the business reorganisation plan shall be approved by the IPS, after consulting with the competent authority.

Removed6. ▌Member States shall ensure that the measures envisaged in the business reorganisation plan referred to in paragraph 5a are compatible with the restructuring plan of the credit institution that is required by the Commission, in accordance with the Union State aid framework.

Removed6a. The competent authority shall provide the business reorganisation plan to the resolution authority. The resolution authority may examine the business reorganisation plan with a view to identifying any actions which might adversely impact the resolvability of the institution and may make recommendations to the competent authority with regard to those matters. The resolution authority shall communicate its assessment and recommendations within the timeframe set by the competent authority.

Removed‘Article 11c

RemovedRemediation plan

Removed1. Member States shall ensure that where the credit institution fails to fulfil the commitments outlined in the note referred to in Article 11b(1), or the business reorganisation plan referred to in Article 11b(5a), first subparagraph, or fails to repay the amount contributed under the preventive measures at maturity or to comply with the exit strategy under Article 11b(4), the DGS informs the competent authority thereof without delay.

Removed2. In the situation referred to in paragraph 1, Member States shall ensure that the competent authority requests the credit institution to submit a one-time remediation plan to the designated authority and the DGS describing the steps the credit institution will take to secure compliance with supervisory requirements, to ensure its long term viability and to repay the due amount contributed by the DGS to the preventive measure, as well as the associated timeframe. The designated authority and the DGS shall consult the competent authority as regards the measures envisaged in the remediation plan.

Removed3. Where the competent authority is not satisfied that the remediation plan is credible or feasible or where the credit institutions fails to comply with the remediation plan, the DGS shall not grant any further preventive measures to that credit institution and the relevant authorities shall carry out an assessment of whether the institution is failing or is likely to fail, in accordance with Article 32 of Directive 2014/59/EU.

Removed4. By … [OP – please insert the date = 24 months after the date of entry into force of this Directive] the EBA shall issue guidelines setting elements of the business reorganisation plan accompanying the preventive measures referred to in Article 11b (3) to (5a) ▌ and the remediation plan referred to in paragraph 1 of this Article.

Removed‘Article 11d

Removed▌Alternative measures

Removed1. ▌Member States shall enable the use of DGS funds for the alternative measures referred to in Article 11(5). Member States shall ensure that when DGSs finance such measures the credit institutions market, or make arrangements for the marketing of, the assets, rights and liabilities those credit institutions intend to transfer. Without prejudice to the Union State aid framework, such marketing shall comply with all of the following:

Removed(a) the marketing is open and transparent and does not misrepresent the assets, rights and liabilities that are to be transferred;

Removed(b) the marketing does not favour, nor discriminate between, potential purchasers and does not confer any advantages on a potential purchaser;

Removed(c) the marketing is free from any conflict of interest;

Removed(d) the marketing takes account of the need to implement a rapid solution taking into account the deadline laid down in Article 3(2), second subparagraph, for the determination referred to in Article 2(1), point (8)(a);

Removed(e) the marketing aims at maximising, as much as possible, the sale price for the assets, rights and liabilities concerned.

Removed1a. Member States shall ensure that, where the DGS is used in accordance with Article 11(5) with respect to a credit institution, and provided that such action ensures that natural persons and micro, small and medium-sized enterprises continue to have access to their deposits, to prevent them from bearing losses, the DGS to which that credit institution is affiliated shall contribute the following amounts:

Removed(i) the amount necessary to cover the difference between the value of the covered deposits and of the liabilities with the same or a higher priority ranking, and the total value of the assets which are to be transferred to a recipient; and

Removed(ii) where relevant, an amount necessary to ensure the capital neutrality of the recipient following the transfer.

Removed‘Article 11e

RemovedLeast cost test

Removed1. When considering the use of DGS funds for the measures referred to in Article 11(2), (3) or (5), Member States shall ensure that DGSs make a comparison of the following:

Removed(a) the estimated cost for the DGS to finance the measures referred to in Article 11 (2), (3) or (5);

Removed(b) the estimated cost of repaying depositors in accordance with Article 8(1).

Removed2. For the comparison referred to in paragraph 1, the following shall apply:

Removed(a) for the estimation of the costs referred to in paragraph 1, point (a), the DGS shall take into account the expected earnings, operational expenses and potential losses related to the measure;

Removed(b) for the measures referred to in Article 11(2) and (5), the DGS shall base its estimation of the cost of repaying depositors, as referred to in paragraph 1, point (b), on the valuation of the credit institution’s assets and liabilities referred to in Article 36(1) of Directive 2014/59/EU and the estimate referred to in Article 36(8) of that Directive;

Removed(c) for the measures referred to in Article 11(2), (3) and (5), when estimating the cost of repaying depositors, as referred to in paragraph 1, point (b), the DGS shall take into account the expected ratio of recoveries, ▌ the potential additional cost of funding for the DGS and the possible cost for the DGS arising from potential economic and financial instability, including the need to use additional funds, within the DGS mandate, to protect depositors and financial stability, and to prevent contagion;

Removed(d) for the measures referred to in Article 11(3), when estimating the cost of repaying depositors, the DGS shall multiply the estimated ratio of recoveries calculated in accordance with the methodology referred to in paragraph 5, point b, by 85 %.

Removed3. Member States shall ensure that the amount used to finance the resolution of credit institutions, as referred to in Article 11(2), for the preventive measures referred to in Article 11(3), or for the alternative measures referred to in Article 11(5), does not exceed the amount of covered deposits at the credit institution.

Removed4. Member States shall ensure that the competent and resolution authorities provide the DGS with all information necessary for the comparison referred to in paragraph 1. Member States shall ensure that the resolution authority provides the DGS with the estimated cost of the DGS contribution to resolution of a credit institution as referred to in Article 11(2).

Removed4a. As soon as possible after performing alternative measures, Member States shall ensure that the DGS shares with the competent authority, the resolution authority and the designated authority a summary of the core elements of the calculation made pursuant to this Article. That summary shall in particular comprise the net recovery rate derived from the estimated cost of repaying depositors for the DGS and a broad justification of the related underlying assumptions.

Removed5. The EBA, taking into account the regulatory technical standards adopted pursuant to Article 36(16) of Directive 2014/59/EU, shall develop draft regulatory technical standards to specify:

Removed(a) the methodology for the calculation of the estimated cost referred to in paragraph 1, point (a), which shall take into account the specific features of the measure concerned;

Removed(b) the methodology for the calculation of the estimated cost of repaying depositors referred to in paragraph 1, point (b), including the expected recoveries referred to in paragraph 2, point (c), the potential additional cost of funding for the DGS and the possible cost for the DGS arising from potential economic and financial instability, including the need to use additional funds, within the DGS mandate, to protect depositors and financial stability, and to prevent contagion;

Removed(c) the way to account, in the methodologies referred to in points (a), (b) and (c), where relevant, for the change of value of money due to potential accrued earnings over time.

RemovedFor the calculation of the potential additional cost for the DGS referred to in the first subparagraph, point (b), the methodology shall factor in:

Removed(a) the administrative costs linked to the process of repayment;

Removed(b) the administrative costs of levying contributions pursuant to Article 10(8) should such contributions be needed to repay the depositors, and the costs of mobilising alternative funding arrangements pursuant to Article 10(9) should such arrangements be mobilised.

RemovedFor the calculation of the estimated cost of repaying depositors as referred to in paragraph 1, point (b), in the case of ▌measures referred to in Article 11(2), (3) or (5), the methodology referred to in point (b) shall take into account contagion effects, economic and financial risks and any reputational damages for the banking system, including, where relevant, the protection of the joint trademark, and the importance of preventive measures for the statutory or contractual mandate of the DGS, including IPS referred to in Article 1(2), point (c).

RemovedThe EBA shall submit those draft regulatory technical standards to the Commission by …[OP – please insert the date= 12 months after the date of entry into force of this Directive].

RemovedPower is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed(13a) Article 13 is replaced by the following:

Removed‘1. The contributions to DGSs referred to in Article 10 shall be based on the amount of covered deposits and the degree of risk incurred by the respective members of any single DGS.

RemovedMember States may provide for lower contributions for low-risk sectors of credit institutions affiliated to a DGS which are regulated under national law.

RemovedMember States may decide that members of an IPS pay lower contributions to the DGS.

RemovedMember States may allow the central body and all credit institutions permanently affiliated to the central body as referred to in Article 10(1) of Regulation (EU) No 575/2013 to be subject as a whole to the risk weight determined for the central body and its affiliated institutions on a consolidated basis.

RemovedMember States may decide that credit institutions pay a minimum contribution, irrespective of the amount of their covered deposits.

Removed2. DGSs may use their own risk-based methods for determining and calculating the risk-based contributions by their members. The calculation of contributions shall be proportional to the risk of the members and shall take due account of the risk profiles of the various business models. Those methods may also take into account the asset side of the balance sheet and risk indicators, such as capital adequacy, asset quality and liquidity.

RemovedEach method shall be approved by the competent authority in cooperation with the designated authority. EBA shall be informed of the methods approved.

Removed3. In order to ensure the consistent application of this Directive, EBA shall develop draft regulatory technical standards to specify methods for calculating the contributions to DGSs in accordance with paragraphs 1 and 2 of this Article.