Question ID:
Legal Act:
Directive 2014/59/EU (BRRD)
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Disclose name of institution / entity:
Type of submitter:
Competent authority
Subject Matter:
Final valuation lower than the initial valuation

What are the consequences of final valuation being lower than the initial one?

Background on the question:

Directive 2014/59/EU (BRRD) does not clearly specify what the exact consequences of a final valuation being lower than the initial valuation are.

Date of submission:
Published as Final Q&A:
Final Answer:

If the ex-post definitive valuation shows a lower net asset value than the provisional valuation, the resolution authority is equipped with the necessary powers to make additional write down or conversion as necessary. To minimise the probability of this occurring, Article 36(9) of Directive 2014/59/EU (BRRD) requires that a provisional valuation includes a buffer for possible additional losses.


This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Final Q&A
Answer prepared by:
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A:

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.