Article 142

Path:
Capital Requirements Directive (CRD) > TITLE VII > CHAPTER 4 > Section III > Article 142
Title:
Article 142
Description: 
Capital Conservation Plan
Main content: 

1.    Where an institution fails to meet its combined buffer requirement or, where applicable, its leverage ratio buffer requirement, it shall prepare a capital conservation plan and submit it to the competent authority no later than five working days after it identified that it was failing to meet that requirement, unless the competent authority auth­ orises a longer delay up to 10 days.

Competent authorities shall grant such authorisations only on the basis of the individual situation of an institution and taking into account the scale and complexity of the institution's activities.

2.    The capital conservation plan shall include the following:

(a)    estimates of income and expenditure and a forecast balance sheet;

(b)    measures to increase the capital ratios of the institution;

(c)    a  plan  and  timeframe  for  the  increase  of  own  funds  with  the objective of meeting fully the combined buffer requirement;

(d)    any other information that the competent authority considers to be necessary to carry out the assessment required by paragraph 3.

3.    The competent authority shall assess the capital conservation plan, and shall approve the plan only if it considers that the plan, if imple­ mented, would be reasonably likely to conserve or raise  sufficient capital to enable the institution to meet its combined buffer requirements within a period which the competent authority considers appropriate.

4.    If the  competent authority does not approve the capital conser­ vation plan in accordance with paragraph 3, it shall impose one or both of the following:

(a)    require  the  institution  to  increase  own  funds  to  specified  levels within specified periods;

(b)    exercise  its  powers  under  Article  102  to  impose  more  stringent restrictions on distributions than those required by Article 141.