Response to eBA consults on technical standards on impracticability of contractual recognition of bail-in
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Q1. Are there any third country authorities, other than resolution authorities, that might impose instructions not to include the contractual bail-in recognition term?
Not authorities, but third-country courts could invalidate the bail-in contractual recognition term.Q2. Can you provide concrete examples of instruments, such as letters of guarantee, governed by the law of a third country which are not used in the context of trade finance and which would be subject to conditions of impracticability?
N/AQ3. Do you agree that the categories of liabilities in the above table do not meet the definition of impracticability for the purpose of Article 55(6)a)?
Yes, however it is not extensive in covering all the liabilities concerned.Q4. Do you consider that there is any condition of impracticability that has not been captured in the analysis?
Yes, please read the paper concerning issues coming from Brexit. Even if there has been some kind of progress thanks to the BRRD2, the burden and efficiency of the recognition is still not clear. Moreover, banks are reluctant to re-negotiate contracts, in order to avoid additional costs.Q5. Do you agree with EBA’s approach for developing the draft ITS?
YesQ6. Do you consider reasonable 3 months for entry into force of the ITS, as allowing enough time to set-up the proper and adequate capabilities to notify with this ITS?
In ordinary times, I would say yes. In the current situation, not only for the pandemic, but also for the Brexit uncertainty concerning the financial sector, I would have preferred more time.Q7. Do you agree with EBA’s proposed conditions of impracticability?
Generally yes, but matters concerning English law should be deepened.Q8. Can you provide examples of instruments or contracts for which it would be impracticable to include the contractual recognition which are not captured by the above proposed conditions?
Under my analysis, it is not really a matter of instruments. Conditions posed by Brexit and future non-compliance with the BRRD (including the avoided adoption of the BRRD2) could make impracticable to include the contractual recognition.Q9. Are the proposed conditions of impracticability clear and meeting their purpose?
They are clear but not extensive.Q10. Is the article providing the conditions for the Resolution Authority to require inclusion clear?
For UK Law issues, at the EU level coordination and/or harmonisation would be desirable.Q11. Do you agree with EBA’s proposal for the conditions for the resolution authority to require the inclusion of the contractual term?
Generally yes.Q12. What is the likely amount of the liabilities to be notified under article 55 BRRD, as average per liability and as expected maximum per liability? What is the expected average maturity of the liabilities to be notified under article 55 BRRD?
I don't have this data.Q13. Do you agree with EBA’s proposal for the reasonable timeframe for the resolution authority to require the inclusion of the contractual term?
Same as in Q6.Q14. How much time do you need to implement the technical specifications provided in this draft ITS?
N/AQ15. Do you consider the draft ITS comprehensive for submitting a notification of impracticability?
YesQ16. Do you consider the templates and instructions clear?
Yes but could be more extensive in the English law side.Q17. Do you have any suggestions or proposals in relation to the draft ITS template and the instructions to fill it in?
More flexibility about timing and deadlines. They should be re-shuffled according to the current situation.Q18. Do you find any specific piece of information required in the template as hard to provide or unclear how to fill in?
The structure is fine for me.Q19. Do you agree with the draft Impact Assessment? Can you provide any numerical data to further inform the Impact Assessment?
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